Village Grain Bank Scheme

The Village Grain Bank Scheme was a Government of India initiative aimed at ensuring food-grain security for marginalised households in food-deficit and remote regions. It sought to establish community-based grain reserves where eligible families could borrow food grains during lean seasons or emergencies and repay them after harvest, thereby providing a safety net against hunger and starvation.

Background

The scheme was initially launched by the Ministry of Tribal Affairs in 1996-97 to address food insecurity in vulnerable tribal and drought-affected areas. On 24 November 2004, its implementation responsibility was transferred to the Department of Food and Public Distribution under the Ministry of Consumer Affairs, Food and Public Distribution. The programme specifically targeted drought-prone, desert, hilly, inaccessible, and tribal villages facing frequent food shortages.
The concept was rooted in traditional community grain-saving practices, adapted into a formal mechanism supported by the government. It aimed to reduce dependence on external markets and prevent starvation deaths during periods of food scarcity.

Objectives

The primary objectives of the Village Grain Bank Scheme were as follows:

• To provide a safety-net for poor families during lean seasons, natural disasters, or sudden food crises.
• To ensure availability of grains to below-poverty-line (BPL) families and those under the Antyodaya Anna Yojana (AAY).
• To promote local participation by empowering panchayats, self-help groups, or non-governmental organisations to manage and operate the grain banks.
• To strengthen food-security systems at the grassroots level through decentralised storage and distribution mechanisms.

Key Features

The scheme functioned on a community participation model, ensuring transparency and local accountability. Its principal features included:

• Establishment of village-level grain banks in identified food-scarce regions as per state government recommendations.
• Each grain bank typically served 30 to 40 BPL or AAY families within a village.
• The Central Government provided food grains and a financial grant for establishment, while state governments and local institutions contributed land, storage facilities, and management oversight.
• Member families could borrow food grains, often up to 100 kilograms, during periods of scarcity. The borrowed quantity was repaid post-harvest, generally with a small additional quantity as interest, decided by the village committee.
• The system was designed to be revolving in nature, ensuring continuity of operations once the initial grain stock was replenished through repayments.

The average financial assistance for establishing a single grain bank was approximately ₹ 60,000, which covered construction, management, and initial stock requirements.

Implementation and Coverage

By April 2016, the Government of India had sanctioned around 21,842 village grain banks across 20 states. States with large tribal populations, such as Andhra Pradesh, Madhya Pradesh, Odisha, and Jharkhand, accounted for a significant share of the sanctioned banks. Many of these were established in remote, drought-prone, or forest-covered districts where access to fair-price shops was limited.
However, despite its extensive sanctioning, not all banks became fully operational. Implementation varied across states depending on the efficiency of local administration, the availability of proper storage infrastructure, and community engagement. The scheme was eventually discontinued from 1 January 2014 owing to limited utilisation and inconsistent performance across regions.

Advantages

The Village Grain Bank Scheme offered several social and economic benefits during its active years:

• It served as an immediate buffer against hunger and starvation for vulnerable communities during lean seasons or natural disasters.
• By allowing borrowing in kind, it reduced dependence on moneylenders and prevented indebtedness among rural households.
• It encouraged community management and collective responsibility for food security.
• The revolving nature of grain stock ensured long-term sustainability without the need for continuous external input.
• It provided a practical example of how decentralised systems could complement the national Public Distribution System (PDS).

Disadvantages and Challenges

Despite its potential, the scheme faced several operational and structural challenges:

• Inadequate monitoring and record-keeping led to irregularities in distribution and repayment.
• Improper storage facilities caused grain spoilage, pest infestation, and stock losses.
• Some communities lacked trained personnel or active local bodies to manage the banks efficiently.
• The limited inclusion of diverse food items such as pulses and millets reduced its contribution to overall nutritional security.
• Varying commitment levels among state governments and weak coordination between central and local agencies affected long-term viability.