Warehousing for Ag.

(Offers Depth to Market)

accounts for approx.
25% of the total
logistics cost
 Significance of Warehousing
• Lack of access to a storage facility “is the most
important cause of post-harvest losses for all
types of food in India”. (NAAS Study)
• FAO puts wastage in agriculture produce as high
as 45% of produce
• Access to storage facilities significantly influences
farmers’ commercialisation decisions
• It may also lead to more bargaining power for the
farmers
 Functions of Warehousing
 Offers Safety (by preventing Losses)
 Holding till sold
 Consolidation
 Managing Surplus or scarcity
 Price Stabilization
 Preserving for Value Addition
 Lengthening the market
(by linking it with far off and foreign markets)
 Holding for maturity/ Ripening
 Types of Warehouses
• Yard or Ground Storage
• CAP (Cover & Plinth)
• Special Commodity (for safety, security etc.)
• Cold Storage
• Tank Storage (for milk, oil, gases, chemicals)
• General Merchandise WHs (e.g. furniture, clothing
etc.)
• Reefer containers/ Vans for transport
• Sophisticated stockrooms with advanced state-of-
the-art facilities like real-time tracking mechanisms
 Ownership Types of Warehouses
A highly fragmented structure which includes:
• Household WHs
• Private WHs (with Processing/ Trading tie-ups)

• Cooperative WHs

• Public WHs (by Govt. Agencies)

• Bonded Warehouses
 Variables of Warehousing
• Location
• Charges
• Arrangements Available
(Scientific, Security, Handling,
loading, Unloading, Processing &
Trading tie-ups)
• WH Receipt (Warrant)
 Status of Indian Warehousing
• Govt. (CWC + SWC + FCI)
• Cooperative Warehouses
• Private Warehouses
• Accounts for 25% of the total logistics cost
• Warehousing in India was valued at INR
1,501.2 billion in 2019
• expanding at a CAGR of ~13.57% during
the 2020-2024 period
• expected to reach INR 2,821.1 billion by 2024
 Warehousing Capacity Expansion
Capacity for Ag. stood at over 166 million
tonnes (mt) in 2020
Warehouse Capacity: Sector-wise
 Warehousing Development and Regulatory
Authority (WDRA)
Under Deptt. of Food & Public Distribution, GoI
• Was set up by Government of India on 26.10.2010
[Under Warehousing (Development & Regulation) Act, 2007]
Agenda: (1) To implement Negotiable Warehouse Receipt
(2) Promote orderly growth of warehousing business
Functions:
 registration of warehouses,
 promotion of scientific warehousing of goods,
 improving fiduciary trust of depositors and banks,
 enhancing liquidity in rural areas and
 promoting efficient supply chain
 Warehousing on Competitive Basis
• Industry is highly fragmented with several
unorganized players
• Organized players in the industry account for only
10%
• 90% are small-sized warehouses with less/no
mechanization
• Major players are Container Corporation of India
Ltd., Gati Ltd., Mahindra Logistics Ltd., Transport
Corporation of India Ltd., DHL Express (India) Pvt.
Ltd., Spear Logistics Pvt. Ltd. and Jayem
Warehousing Pvt. Ltd., among others
 Critical Role of Indian Warehousing
• Linked to food security and agricultural growth
• Food wastage is a central issue in Food Security
• Food grains’ production is showing surplus
• Capacity with CWC+SWC+FCI is falling short
• Private capacity is leased for the food grains by
the procurement agencies
• Carrying cost of food grains by public agencies is
causing deficit financing
• Tracking and controlling the procurement,
storage and movement of food grains is still a
dream
 Problems of Indian Warehousing
• Capacity Limited in all of them
• Facilities Poor in most of them
• Cost at higher side (crop volume-wise)
• Latest Technologies are not used in
public warehouses
• Lack of uniform regulations in the
country
• High cost of setting up warehouses
Problems of Agricultural Warehousing
• Lack of supporting infrastructure,
like power and specialised
transportation
• Skewed Distribution of Capacity
• Limited reach of mandies
• Too many intermediaries
• Information asymmetry
• Lack of collateral management options
 Suggestions for Improvement
• government organisations managing food grains’
storage should be integrated into one in order to
implement uniform and effective policies
• Mapping and geotagging of agricultural
warehouses, cold storage facilities and other
inventory storages for ensuring greater
transparency and efficiency
• High-tech Start-ups should be encouraged
• PPP Model is to be promoted for expansion
• Use of Global Positioning System (GPS) and Radio-
frequency identification (RFID) devices
 Suggestions for Improvement Contd.
• Warehouses should be declared as mandies to solve the
issues faced by farmers with regard to storage and
logistics
• All warehouses set up with central or state subsidies
should mandatorily be registered under the WDRA
• To ensure minimum wastage, there needs to be greater
focus on scientific storage methods for food grains
• Road-linked silos (with containers) need to be
constructed, in addition to the existing rail-linked ones
• Multimodal transportation of containerised cargo will
help save costs
 Conclusion
Without an efficient
Warehousing we can
not minimize losses &
achieve Food Security