World’s Largest Grain Storage Plan Expands Through PACS Network

The Government of India is implementing the World’s Largest Grain Storage Plan in the Cooperative Sector to strengthen rural storage infrastructure and improve foodgrain management. The initiative focuses on developing modern storage facilities at the level of Primary Agricultural Credit Societies (PACS) and other cooperative institutions. The programme aims to reduce post-harvest losses, enhance farmers’ access to storage and improve the efficiency of the agricultural supply chain.

Criteria for Selection of PACS

Primary Agricultural Credit Societies are selected for the programme based on specific financial and operational criteria. The societies must be identified and approved by District Cooperative Development Committees (DCDC). Selection is prioritised in locations identified by agencies such as the Food Corporation of India (FCI), National Agricultural Cooperative Marketing Federation of India (NAFED) and National Cooperative Consumers’ Federation of India (NCCF), where there is a significant demand or storage gap. In addition, the PACS must have a positive net worth over the previous two financial years, must not be bank defaulters and should have recorded profits for at least three consecutive years. The proposed godown should preferably have a minimum storage capacity of 500 metric tonnes.

Convergence of Multiple Government Schemes

The grain storage plan is being implemented by integrating several existing government schemes. These include the Agriculture Infrastructure Fund (AIF), Agricultural Marketing Infrastructure Scheme (AMI), Sub Mission on Agricultural Mechanization (SMAM) and the Pradhan Mantri Formalization of Micro Food Processing Enterprises Scheme (PMFME). Through this convergence approach, cooperatives receive financial assistance and technical support for building storage infrastructure and improving agricultural logistics.

Financial Assistance and Subsidy Support

Under the Agriculture Infrastructure Fund, PACS receive interest subvention on loans taken for the construction of storage facilities. The AMI scheme provides a subsidy of 33 per cent for building foodgrain godowns. NABARD acts as the subsidy channelising agency for the projects implemented under AMI and is responsible for sanctioning and releasing financial support.

Important Facts for Exams

• Primary Agricultural Credit Societies (PACS) are grassroots cooperative institutions providing credit and agricultural services to farmers.
• The Agriculture Infrastructure Fund (AIF) provides financial support for post-harvest management infrastructure.
• NABARD functions as a key development bank for agriculture and rural development in India.
• The Agricultural Marketing Infrastructure (AMI) scheme supports the creation of storage and market facilities for agricultural produce.

Role of Cooperative Banks and Reduced Interest Rates

State Cooperative Banks and District Central Cooperative Banks serve as the primary lending institutions for PACS under this initiative. They are responsible for sanctioning and disbursing credit within specified timelines. The programme also utilises NABARD’s special refinance scheme, which significantly lowers borrowing costs for cooperatives. Combined with the three per cent interest subvention under AIF, the effective loan interest rate for PACS is reduced to about one per cent. Some states, including Rajasthan and Gujarat, are also providing additional financial assistance for the construction of storage facilities through their own schemes.