NABARD to ensure speedy funds to states with acute storage deficiency

According to National Bank for Agriculture and Rural Development (NABARD), Eastern and North Eastern states, which are battling with acute storage deficit, will get a priority in fund allocation for building warehouses.

The government has directed NABARD to give priority to states with food deficits like Jammu and Kashmir and to treat these states favourably to cut farm losses amid implementation of the world’s biggest population feeding programme under the National Food Security Bill.

Due to lack of proper storage facilities, a large quantity of horticulture produce go waste in the eastern states. States, which are not self-reliant in food grain production, will also be treated favourably as these states perhaps need more storage facilities sooner than others to prevent food grains from going waste.

What is NABARD doing to create warehousing facilities?

The country as a whole has a gap of 47 million tonnes of storage facility. To plug this gap, the RBI has approved NABARD’s Warehouse Financing Scheme, which was created with a Rs 5,000-crore government corpus to provide direct loans to private as well as public sector companies to build warehousing facilities to strengthen the country’s food storage infrastructure. The scheme has just begun.


A few years ago, NABARD had begun using the Rural Infrastructure Development Fund (RIDF) for providing refinance to commercial banks against loans to private entrepreneurs for building warehouses.

This created controversies as the RIDF was not meant for refinancing activity. This had prompted the RBI to intervene and prohibit NABARD from doing this. So, Nabard has formulated a new scheme for both public and private consumption to fulfill the growing demand for food storage capacity.



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