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Warehouse

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Cooperative Storage and Warehousing Booklet No. 85
Agricultural Cooperation: ACS-12
Contents
Preface
I. Introduction
II. Meaning and Need of Co-operation in Storage
III. Storage Methods Used in India
IV. Factors Affecting the Storage
V. Storage of Food grains
VI. Storage of Commercial Crops
VII. Storage of Perishables
VIII. Development of Co-operative Storage and Warehousing
IX. The Central Warehousing Corporation (C.W.C.)
X. Policy on Co-operative Storage and Warehousing
XI. Position of Co-operative Storage and Warehousing
X. System in India
XII. Evaluation of Storage and Warehousing Facilities
XIII. Suggestions for Improvement
XIV. Conclusion

Preface

After harvesting the crop, the most important practice is the storage. In the absence of storage, the farmer will sell his produce at a very un-remunerative prices. In our country, storage facilities are grossly insufficient and whatever are available, they are not damage-proof or scientific. Thus a broad network of storage facilities which is easily accessible to the farmers is needed. This can be successfully achieved by organizing co-operative storage and warehousing. This booklet describes all these possibilities in detail but in simple language.

Dr. K. T. Chandy, Agricultural and Environmental Education

I. Introduction

Storage is an exercise of human foresight by means of which commodities are protected from deterioration and surplus supplies are carried over for future consumption in regions of scarcity. Scientific storage and warehousing facilities are essential for effective conservation especially for the disposal and systematic marketing of agricultural produce in general and food grains in particular. Storing of agricultural produce is an important stage m the process of agricultural marketing. It is a specialized activity and, therefore, needs special treatment. In under-developed countries whose mainstay is predominantly agriculture, adequate facilities for storing of agricultural produce are not only essential for farm economy, but also for the economy of the entire country. In countries like India, cultivators are compelled to sell their produce immediately after the harvest due to absence in holding power and adequate storing facilities.

II. Meaning and Need of Co-operation in Storage

Most of the agricultural products are seasonal and are not consumed immediately but sometime in future and hence require their preservation. In fact, the need for storage arises fundamentally out of the lack of adjustment between the time of production arid the time of consumption of goods.

Reasons for storage

1. Storage of fruits, vegetables, poultry products, fish and dairy products is necessary because of their seasonal production and continuous consumption. If not preserved, their supply would not be available when needed.
2. Some products such as rice, gill, honey, cheese, tobacco etc. get enhanced prices if preserved for a longer period.
3. Food grains are stored for their consumption, for payment, in exchange to labour, feed, seed, and year to year reserve. They are also stored for an expected increase in their prices and to supply the customers during the marketing year.

With reference to agricultural marketing, warehousing implies the provision of facilities for safe storing of the produce of the farmer and raising funds for him so that his holding power is increased and he is able to fetch good prices for his produce by selling it at the appropriate time. The role of cooperative in this field can hardly be over-emphasized. In our country the private initiative, in its field, has not been adequate and, therefore, the government has to assume the responsibility of developing a strong warehousing system.

III. Storage Methods Used in India In India, food grains are stored by individuals and agencies in various places, quantities and time. About 78 millions cultivators are in need of storing their food grains. They store food grains either in their homes (in crude earthen receptacles, underground pits known as kudurus, kallis, theleleas, kothis, kuthalas, khalties) or in close by sheds depending upon the quantity stored. Some bigger farmers store food grains in outdoor bins, and in commercial go downs or silos (if any) including those operated by i cooperatives, the state, the Central Warehousing Corporation (CWC) and private concerns.

Private traders purchase all the grain coming into the wholesale markets especially immediately after the harvest and store most of the stocks in mandis and terminal markets.

The principal government agencies storing food grains in their own main buffer stocks are the Food Corporation of India (FC!) and Civil Supplies Departments of the state governments. The FCI is responsible for food grains, imports, buffer stock, price supports, inter-zonal movements, public distribution and some processing. The food grains are stored in their own go downs or in rented II space provided by the CWC, the various state WCs and agricultural cooperatives.

With the increase in storage requirement and development of storage, different types of warehouses have emerged. Generally, agricultural produce and manufactured goods are first stored at Central Distributing Warehouses. , From there, as and when necessary, they are distributed to f wholesalers, retailers, etc. Silo, bin and elevators are main types of warehouses. These warehouses may be for special commodity (and known as special commodity warehouses), such as cotton, grains, molasses etc. There are also cold storage or refrigerated warehouses to provide facilities for perishable produce such as fruits, vegetables, eggs, meat, fish, dairy products, etc. Although reliable data are not available about the type and effectiveness of storage structures in India, yet a study undertaken in Uttar Pradesh does throw some light on different storage system especially in village storage.

1. Village storage of food grains It has been found that most common means of storage of wheat in villages are jute bags, mud pots, kuthla (cylindrical bin of mud and bricks mixed with straw or dung with a capacity of 1 quintal to 2 tonnes), Katchi Kothi (rectangular bin of mud bricks mixed with straw or dung with a capacity of 2 to 8 tonnes), thekka, a cylindrical rubberized cloth structure supported by bamboo poles on a metal tub base (with a capacity of 10-15 quintals) and the metal drums.

2. Bulk storage There are two types of bulk storage; flat and silo. Flat bulk storage comprises of buildings with stronger walls and some emptying device; while silos are upright bins made of reinforced concrete or steel and usually filled by mechanical elevators and emptied by gravity flow.

Much of the food grains is in the traditional bag go downs forms scattered in market, towns and cities. It is generally old, not rodent proof and without provision for fumigation. In this situation the cooperative storage system is emphasized.

IV. Factors Affecting the Storage The storage methods differ in different parts of the country depending upon various factors, such as:
1. marketing systems: village market, town, terminal market or retail shop;
2. the commodity being stored: perishable items like fruits and vegetables, non-perishables like wheat, rice, pulses, etc
3. climate: temperature and moisture;
4. available materials; and
5. customs or tradition of the area: whether village storage of food grains or bulk storage system.

V. Storage of Food grains

The main food grains which need to be stored in India !are wheat and rice because these are the most important staple food in India.

1. Storage of wheat In most of the villages growers store their produce in pits or receptacles variously known as kundrus, kallis or thekka. Wheat is stored in kothas or rooms, the floor of which has been previously covered with sand. In the villages of Punjab, it is also kept packed in large gunny bags known as thekkas, each containing about 20-50 'i quintals of grain. These are kept in the middle of the room and some sand is usually mixed with the grain to increase its keeping quality. In Rajasthan, M.P. and V.P. the grain is put in earthen pots, bins or receptacles made of matting, mud and wicker work and in earthen cylinders inside the rooms. Chauras is also used in these areas. It is a square built earthen vessel well plastered with mud and Cow dung both inside and outside of it. The grain is poured through a hole on the top and taken out through a small outlet near the bottom. It is placed on supports 1 or 2 inches high in a comer of the room but not touching the wall on any side as this keeps the grain cool and also makes it less liable to attack by insects and rats.

In small town markets, kothas are used for storing the grain. These are made of bricks and usually have the capacity of 150 to 300 maunds. Wheat is stored in these kothas' either in bulk or in large sized gunny bags (known as thekkas). These kothas are free from dangers of fire but the thin layer of grain alongside the floor or walls is often damaged by the mould on account of dampness.

In bigger markets, wheat is stored in khaltis which are square or oblong shaped pits sunk into the floor with a narrow mouth but wider base. They are lined with straw or chaff and the grain is stored in bulk and covered at the top by a covering of straw, earth and thatch or by a stone. Their usual storing capacity is from 100 to 160 quintals. At the terminal markets, wheat is stored in closed warehouses made of concrete or corrugated iron.

2. Storage of rice Rice is stored in village kothis made of brick or mud as in V.P., M.P. and Bihar, or in receptacles made of : plated straws or split bamboos plastered with a mixture of i mud and cowdung as in West Bengal (where these are called Morai), Tamil Nadu (Kalangium, Puttrarais and Gadi), Bihar (Bakhari), Karnataka (Kavaj) and Kerala (Arah). In Orissa, rice is stored in pits which are lined with cow dung plaster with a layer of straw in the bottom and a filial coating of mud at the top. These receptacles are made of a platform and are of different capacities suited to individual requirements. In market, rice is stored in brick built go downs with a cement floor- ing. These are owned by the merchants.

In the terminal markets the storage facilities are pro- vided by port authorities. The storage receptacles are built of brick with cemented or: flag stone floor of different capacities. In rice mills, it is stored in go downs with cemented floors and corrugated iron roof and milled rice is invariably packed in bags.

VI. Storage of Commercial Crops Storage of some important commercial crops are described here.

1. Storage of cotton Regarding storage of cotton, the Bombay Banking Enquiry Committee has observed that there is absence of storage facilities for cotton and the accommodation available in a number of go downs kept by the commission agents is insufficient. It is kept in bales. In the terminal markets bales are stored, before export, in fire-proof go downs.

2. Storage of jute In the case of jute also as it is not possible for the l grower to provide fire-proof store house, hence, he sells it very often immediately, after the harvest to avoid the destruction by fire, varmints and white ants.

3. Storage of sugarcane Storage of cane is not practiced except it is conserved for seed and chewing purposes. But storage of gur is common both in villages and mandis. In large mandis, is stored for about 6 months. They keep gur in a dry place lined with bhusa or dry leaves. Gur is also kept in bags of gunny cloths.

4. Storage of sugar

Sugar is stored by the mills and wholesale dealers in large stock in dry go downs with cemented floor which are usually covered with thin layer of sand, old bags or wooden sleepers. The top layer is covered with tarpaulins to save it from heat and moisture. The loss in quality seldom exceeds half per cent.

5. Storage of potatoes

Seed potatoes are stored from March to October in go downs built on high plinth and surrounded by other structures to keep them dry and cool. Usually they are stored in pits about 15 ft. deep and 2.5 to 3 ft. high and. covered with a thick layer of grass. A ditch is dug round the heap generally at a distance of 1 to 2 ft. and filled with water. These pits are fumigated to check the attacks of moths.

6. Storage of tobacco The storage of tobacco has an important bearing on its smoking quality. Cigarette tobacco has to be kept for sometime till it is mellow and fit for manufacture. The villagers, being poor and ill equipped with storage facilities, do not store it for long because in the absence of storage facilities cigar, cigarette and high quality chewing tobacco leaf deteriorates in quality and colour. Leaf tobacco is tied into bundles and put on the platform over which dry grass or palm leaves are put and these are finally covered with gunny cloths and mats. The bidi tobacco powder is packed in gunny bags, while cigarette tobacco is usually kept in gunny bales, wooden cases and hogs heads. In large markets, like that of Guntur, tobacco is stored in pucca go downs with asbestos or corrugated roofing. Storage losses are due to dampness, excessive pressure and insects.

VII. Storage of Perishables

Though the problem of storage is all the more import- ant for perishable commodities such as fruits and vegetables, unfortunately, cold storage facilities exist only in a few places.

Fish and fish products are highly perishable. Attempts are, therefore, made to dispose of stocks as quickly as possible even at a small margin of profit. Fresh fish is generally not stored in any consuming centre for more , than 24 hours.

VIII. Development of Co-operative Storage and Warehousing

Lack of holding power has been the bane of Indian agriculture. The cultivator has rarely any control on his own crop which is often taken away by the village money lender in redemption of his previous debt. So cultivator has no staying power to wait for the market price to improve after the harvest. He needs money immediately for next agricultural operations and also to meet his social and religious obligations. Therefore, he is compelled to sell his produce in the village market or nearby Mandi immediately after harvest, where because of the glut in the market low prices prevail. Therefore, to save him from this situation, proper development of storage and warehousing facilities is must.

Further, the grower does not have the requisite facilities for preserving the produce in his home or village against pilferage, rodents, ravages of nature, locusts or floods, besides dampness and weevil. In villages, storage is not localized ill any area or confined ill structures exclusively designed for this purpose. Instead, any kind of covered accommodation including dwelling houses is passed into use. This dispersion over an area and crude system of storage is wasteful as it involves expenses in handling and transportation which might be saved if storage are centralized in or near market places or railway yards. Hence, the need for improved facilities for storage is emphasized.

A. Loss of food grains during post-harvest handling

A great loss ensues to the producer due to inadequate and unscientific method of storage. These losses have been estimated to range between 1.5 % to 5 per cent. Speaking in other terms, it is said that annually 10 % of the food grains are lost on account of losses during the post-harvest operations.

Estimates of losses of food grains during post harvest handling processing and storage are given below:
Table 1 Losses of food grains in post harvest handling
|Sl. |Stages where the loss is caused |Percentage of loss |
|No. | | |
|1 |Threshing yard |1.68 |
|2 |Transport |0.15 |
|3 |Processing |0.92 |
|4 |Storage loss | |
|5 | i. Rodents |2.50 |
|6 |ii. Birds |0.85 |
|7 |iii. Insects |2.55 |
|8 |Total |9.33 |

Such a vast loss can be eliminated by providing suit- able storage and warehousing facilities at vintage points.

B. Proposals of national committee on warehousing

Various national committees were set up to investigate the feasibility of warehousing. Some of their suggestions are mentioned here:

1. The Agriculture Finance Committee (1945) This committee remarked warehousing might be considered as extension of the system of transport and the planning to the location of warehouses must be done as part of the extension and improvement of transport facilities. The construction of a chain of warehouses is unlikely to attract immediately sufficient private capital. Hence, we recommend that the state should itself trade in agricultural produce. The warehouse system should II be operated by a public corporation organized on lines Ii similar to those of the Improvement Trust or Port Trust.

2. The Rural Banking Enquiry Committee (1950) The committee emphasized the importance of storage and warehousing in relation to rural credit and rural banking. It suggested the formation of a Warehousing Development Board with a large capital for the purpose of giving loans and subsidies to those who were prepared to take up this line of activity on a business. But in the absence of a detailed scheme, whereby execution and implementation could be secured, no progress could be made in pursuance of this recommendation.

3. The Committee of Directors of All India Rural Credit Survey (1954) This committee investigated thoroughly the question of warehousing and recommended the following:

a. the establishment of National Cooperative Development and Warehousing Board and All India Warehousing Corporation;
b. the N .C.D. W. Board should be in charge of district level of development concerned with storage and warehousing and distribution of the basic requirements of the cultivator as produce and as consumer;
c. plan and finance the activities of warehousing development
d. developing storage and warehousing in important centres;
e. participation of state government may be ensured by these contributions to the share capital and developing storage and warehousing in different centres; and
f. at all levels, the go downs and warehouses should also distribute fertilizers, and articles of basic use to the cultivators.

As a result of the recommendations of this committee, the Agricultural Produce (Development & Warehousing) Corporation Act was enacted and enforced from 1st August 1956. This act provided for the establishment of , National Cooperative Development and Warehousing Board, the Central Warehousing Corporation and the State Warehousing Corporation. National Cooperative Development & Warehousing Board (N.C.D.W.) was set up in 1956 with 22 members. It was assigned the , following functions :

a. to advance loans and grants to state governments for financing cooperative societies engaged in marketing, processing or storage of agricultural produce, including contribution to the share capital of these societies;
b. to provide funds to warehousing corporation and the i state government for providing finance to cooperative societies for the purchase of agricultural produce on behalf of the Central government;
c. to plan and promote programmes, through cooperative societies, for the supply of sees, manures, fertilizers, implements and other articles needed for the development of agriculture; and
d. to subscribe to the share capital of the Central Warehousing Corporation and advance loans and grants to the Central and State Warehousing Corporations.

The board was essentially a policy making and financing body. To enable it to carry out its functions, it receives grants from the government of India.

In 1962, the Agricultural Produce (Development & Warehousing) Corporation Act was amended and replaced I by another Act known as the Warehousing Corporation Act, 1962. Subsequently in March1963 the N.C.D.W.B was converted to the National Cooperative Development Corporation (N.C.D.C.) and was exclusively responsible for co-operative development.

Under this act, two types of corporations have been set up-one, the Central Warehousing Corporation and second, the State Warehousing Corporation in each state.

IX. The Central Warehousing Corporation (C.W.C.)

It was set up at New Delhi with an authorized share I capital of Rs 20 crores. The CWC is responsible for running warehousing for storage of agricultural produce, seeds, fertilizers, and implements; acting as the agent of the NCDC or of the government for the process of purchase, sale, storage and distribution of agricultural produce, implements, seed, fertilizers etc; task of providing go downs and warehouses in centres of suitable places in India; arranging facilities for transport of agricultural produce to and from the warehouse; and subscribing to the share capital of the State Warehousing Corporations.

A. Functioning of Central Warehousing Corporation

The warehousing scheme is operated with the understanding to avoid overlapping of jurisdiction and activities among the CWC, the State Warehousing Corporation and the Co-operatives. They are closely interlinked and complementary to each other. The C.W.C. confines its activities to terminal markets, marketing centres of all India importance and specialized storage techniques like cold storage, etc. The State Warehousing Corporation functions at marketing centres of regional and state importance requiring storage facilities from 2,000 to 5,000 tonnes. Remaining areas including production centres needing storage facilities below 2000 tonnes are left to the co-operatives.

An intending depositor takes the produce to the ware- house where it is examined and graded. Duplicate samples are drawn, one is retained in warehouse for purpose of comparison at the time of withdrawal, while the other is handed over to depositor to assist him in the trading. The warehouse receipt, being transferable, lends itself easily for trading to change ownership by a simple endorsement without necessitating actual handling of commodities.

Deposits are accepted both in bulk and packed. Port deliveries are also al1owed if so desired: The depositor takes the warehouse receipt to a bank which advances him credit up to 75 % of the market value, depending upon the commodity. This gives him the much desired holding capacity to wait for more favourable prices.

Commodities which can be stored at the warehouses of the corporation are agricultural products as well as seeds, manures, fertilizers and agricultural implements. I Food stuffs including edible oilseeds, cattle fodder, including oilcakes and other concentrates; raw cotton whether ginned or un-ginned, or cotton seed, raw jute and vegetable oil are important agricultural commodities stored in these warehouses. Other commodities include various food- grains such as wheat, rice, jowar, pulses and cash crops, spices and chilies, dhania, sugar, gur, tamarind, mahua, turmeric, cattle fodder, ginger, pepper, cotton and cotton seed for internal consumption. Storage charges are economically as low as possible ~nd are within the reach of an average producer. Varying from commodity to commodity, they are near about 20 paise per quintal per month.

The security of stock in the warehouse is ensured by ; adopting scientific methods of storage and frequent inspection and by insuring stocks against losses due to fire, theft, civil commotion, etc.

B. Working operation of the C.W.C. The CWC made an humble beginning in 1957 with 7 warehouses with a capacity of 7,000 tonnes. It gradually increased its operations to new centres and extended its storage capacity to 1031akh tonnes with number of go downs-54546 in 1987-1988.

The CWC has significantly contributed to the economy of the country in various ways.

1. It provided storage facilities through a chain of over 1250 warehouses spread all over the country.
2. It helped in preservation of stock, minimizing losses in storage, especially of jute bales in West Bengal.
3. It provided specialized storage for highly hygroscopic and delicate commodities like jaggery, spices, pharmaceuticals, chemicals and other consumer goods.
4. Handling, clearance and distribution of imported cements were also undertaken by CWC.
5. Air cargo complex for import/export and un-accompanied baggage at airports was handled by CWC.
6. Managing air-conditioned warehouses for exportable shellac and other delicate commodities, was within its purview.
7. Purchase, storage, sales and distribution services, were undertaken by the cooperators.
8. It supervised orderly marketing through proper receipt, handling, grading care and delivery of corporation.
9. It provided disinfectant service to farmers, traders, cooperatives, millers and others, and fumigation of exportable commodities.
10. Extension and educational services to farmers which educate them about the scientific storage and benefits of public warehousing were undertaken by CWC.
11. It provided training of personnel and expert advice on matters related to warehousing and storage.
12. It provided an incentive in the form of a rebate of 10% in storage charges to cooperative societies, and individuals/farmers who avail of the corporation storage facilities.

The source of the income are storage interest, agency commission and dividend.

X. Policy on Co-operative Storage and Warehousing

The programme of assisting cooperatives to enable i them to construct their own go downs for the development of their marketing and supply functions, was initiated during the Second Plan period. Till 1955, storage capacity with the co-operatives was insignificant. Stress was, therefore, laid during the second plan and subsequent period on the creation of storage capacity by constructing go downs at mandi level and rural level by marketing societies and village societies respectively.

In 1959, the Agricultural Produce (Development and Warehousing) Corporation Act was passed. In 1963, it was converted into the National Cooperative Development Corporation with its functions particularly confined to cooperative development. Its function relating to the development of warehousing facilities have been taken over by the government.

The Central Warehousing Corporation has been set up with an authorized capital of Rs. 20 crores, divided into 21akh shares of Rs. 1,000 each.

State Warehousing Corporations have been established in the states with an authorized share capital not exceeding Rs. 2 crores. Fifty percent of the shares are subscribed by the Central Warehousing Corporation and 50 % by the state government.. The functions of these 'corporations are similar to those of the Central Ware- housing Corporation. These corporations are allowed to raise funds by the issue of debentures and by borrowing from the Reserve Bank of India (now NABARD : National Bank for Agriculture and Rural Development, the State Bank of India and the government.

XI. Position of Co-operative Storage and Warehousing System in India

Co-operatives provide storage facilities to their members by renting or owning go downs and thereby facilitate ground of advances against pledge of produce and sale of the members produce. It got the shape during the 2nd Five year plan. Since then, it has developed a lot under different 5-year plans.

A. During Five Year Plans

In the second five year plan and subsequent periods, creation of storage facility by constructing go downs at mandi level and rural level by marketing societies was started. In the second plan, assistance was provided for the construction of about 1716 mandi level and 4985 rural go downs. In addition to these go downs, cooperatives constructed about 1,000 go downs at mandi level and 1500 go downs in rural areas with their own resources. Their storage capacity was of the order of 8 lakh tonnes.

During third plan cooperative societies increased their storage capacity from 8 lakh tonnes to about 20 lakh tonnes with the construction of 800 go downs at mandi level and 6600 rural go downs.

The fourth plan envisaged to construct 15,00 mandi and 23,000 rural go downs and the storage capacity was expected to increase to 46 1akh tonnes from 20 tonnes. However, only 161akh tonnes could be sanctioned, bring- ing the total sanctioned capacity to 42 1akh tonnes.

During the fifth plan it was envisaged that the storage II capacity with the cooperatives would increase to 6.8 million tonnes by 1978-79 from the level of 3.2 million tonnes in 1973-74. With the financial assistance from the N.C.D.C. the total storage capacity sanctioned up to March 1976, was to the order of 4.6 million tonnes. During 1976-77, sanctions for an additional capacity of 2.63 lakh tonnes were made. In the same year there were 23,661 go downs (4,796 mandi and 18,865 rural) with a total capacity of 4.0 million tonnes. During 1978-79 there were 26,224 go downs (5,099 mandi and 21,125 rural) with capacity of 4.5 million tonnes.

Sixth plan envisaged the development of a well-spread storage network. At the base, rural go downs were to be set up, at least 10-15 go downs of appropriate capacity in each block. Under this plan, all recognized, primary agricultural credit societies and marketing societies were assisted to build-up owned storage of appropriate capacity. With a view to meeting the growing needs of producers, especially of potato, onion, fruits etc. a systematic programme was taken to establish cold storage facilities at strategic places.

B. State Warehousing Act

In order to facilitate the setting up of warehouses and , to regularize their working, various states have passed warehousing act. The general feature of these acts are:

1. any person including companies and associations and a body corporate may apply to the state government for the grant of licenses for carrying on business of warehouse-man;
2. government may grant the license after satisfying the following: a. building or other protected structure, which is proposed to be used as a warehouse is suitable for storing specified goods; b. the applicant is financially sound; and c. he has paid the prescribed fee.

The warehouse-man has the following duties:

1. he shall keep the goods with care and keep his warehouse clean and free from rats and other pests;
2. goods shall be kept separately in such a way as may ensure their identity;
3. goods received shall be insured against damage by fire, rain, floods, theft, etc; and
4. warehouse man shall not discriminate between the persons desiring to avail of his warehouse except in favour of a cooperative society.
The warehouse receipt is issued and is governed by the provisions of the Warehousing Act. It is an important document and contains :

1. the name and location of the warehouse;
2. the date of issue of the receipt and the consecutive number of receipt;
3. description of the commodity including weight and condition;
4. the rate of storage charges;
5. whether commodities received will be delivered to the bearer, to a specified person, or order; and
6. the amount for which the warehouse-man claims.

The warehouse receipt can be negotiable or non-negotiable, according to the remark mentioned on it. If nothing is mentioned receipt is considered as negotiable.

XII. Evaluation of Storage and Warehousing Facilities

In the process of economic development in India some Ii regional disparities and imbalances have emerged in certain parts of the country. Attempts have been made to II rectify these imbalances in various spheres of the economy from time to time. In specific relation to cooperative development a special Central sector scheme was designed for the rapid development of cooperative marketing. Processing and storage in a group of states and union I territories have been identified as underdeveloped. Various factors have hindered their progress. These are enumerated below.

1. Indian farmers are small holders and hence, market- able surplus is obviously small. It may not be, therefore, worth-while for them to hand over their produce to the warehouses. Otherwise an organized structure for production and marketing should be I developed on the basis of cooperatives.
2. Indian agriculture depends on monsoon and suffers much occasional failure of crops due to droughts, floods, and lack of storage facilities. This may again lead to damage of produce by vermin, dampness weevils, etc. so that little is left for the market.
3. Agricultural commodities are unlike the industrial commodities. They cannot last for long time both in quality and quantity. Durability depends on the type of commodity and it requires the storage facility accordingly. Perishable commodity requires cold storage. These facilities are lacking in the country.
4. If the cost of warehousing is higher than the rise in price and is not commensurate with the troubles taken by the farmers, they will not be tempted to deposit their produce in warehouses.
5. For successful working of warehouses, stability in agricultural prices is necessary, but in India, prices of food grain normally rise after marketing season is over but sometimes the prices go down if early monsoons are good.
6. Warehousing receipts are papers having no distinct (value unless the lenders are sure that they are backed by tangible assets lying in the warehouses. Hence, the management requires to be so efficient as to ensure the confidence of the lenders.
7. Agricultural commodities are heterogeneous. Grading is most essential for the successful working of the warehouses and grading is necessary for bulk storage. In order to facilitate grading, grade specifications of different commodities should be standardized.
8. Irregularities in transporting the produce from ware- houses to the consuming centres create glut and scar city conditions in the market. Therefore, transport arrangement by road and rail need to be made well in advance and in an orderly manner.

As the cooperative movement is particularly weak in 'I the entire North-eastern region including Sikkim, the Corporation has categorized them as cooperatively least developed states and is providing assistance up to 95 % of the cost of each project programme, as against a maximum of 60 to 80 % it used to provide earlier.

XIII. Suggestions for Improvement

In the light of the foregoing analysis the following suggestions are offered.

1. In order that the interest of the rural producers are kept in mind as the main objective in formulating the !I storage and warehousing programmes as a whole, the selection of centres at which go downs and warehouses are to be established should be governed by i the following principles:

a. there should be sizable quantities of surplus for sale; b. there should be a need for storage facilities in the locality; c. the place should be close to terminal market with the regard being paid to the availability of transport facilities by road, rail or water; d. there should be a nucleus of cooperative marketing organization and possibilities of their further expansion in or around the proposed warehousing centre; e. there should be existing or potential banking facilities in order that loans can be advanced against the r produce in go downs or on warehouse receipts; f. larger allocation should be made in the state plan programmes for the construction of cooperative storage in future plans; and g. provisions made in the state plan programmes may be in the form of subsidy be utilize as margin for obtaining larger financial accommodation from the financing agencies.

2. Since the objective of warehousing is to prevent distress selling and to secure fair price to the producers, the bulk of warehousing programmes should be undertaken in the areas of concentrated production. Some warehouses may be located in centre of export or heavy consumption.
3. A list of principal agricultural commodities in each region should be submitted by every state to the Central government for which warehousing facilities are considered necessary.
4. As the go downs are built in the interest of the primary producers they should be helped to derive benefits of storage and warehousing to the fullest possible extent by providing concessional charges to co-operative societies.
5. In order to expedite the construction of new ware- houses, proceedings for the acquisition of land should be instituted under the provision of Land Acquisition
Acts.
6. Producers and traders who are accustomed to conventional methods of storage have to be convinced ! about the clear advantages of the new system. of storage in warehouses. Experimental trials, grade specifications and special arrangements for the storage of such goods as gur, copra, onion, etc. have to be arranged by the warehouses.
7. NABARD should liberalize its terms and conditions to enable the states to undertake larger programmes under their scheme.
8. The Central agencies should be entrusted with the responsibility of making advance locational planning for undertaking a phased programme for construction of go downs, preparation of suitable designs for different areas, etc.
9. Special arrangements should be made for supply of construction material for the construction of go downs and other civil works.

XIV. Conclusion

In the strategy of our agricultural planning, the co- t operatives are playing an increasing role in the distribution of fertilizers and other agricultural inputs. Again, under the impact of high yielding programmes for agricultural development, surpluses of food grains are developing. There is increased involvement of the cooperatives in the procurement of food grains. To be able to handle these activities satisfactorily, cooperatives need adequate storage capacity.

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