Key Facts and Data Points

  • Launch Date: 31st May 2023 (pilot project)
  • Pilot Phase: 11 PACS across 11 states, creating 9,750 MT storage capacity
  • Current Expansion: 1,012 PACS/cooperative societies identified; 313 PACS completed godown construction
  • Total Capacity Created: Over 1.80 lakh metric tonnes (LMT) as of July 2026
  • Implementing Agency: National Cooperative Development Corporation (NCDC)
  • Effective Interest Rate for PACS: 1% (after 3% interest subvention under AIF)
  • Subsidy Enhancement: Increased from 25% to 33.33% under AMI Scheme
  • Margin Money Requirement: Reduced from 20% to 10%

Background and Context

Evolution of the Initiative

The Decentralised Grain Storage Plan emerged from the need to address fragmented storage infrastructure in India's agricultural sector. By leveraging the extensive network of Primary Agricultural Credit Societies (PACS) at village levels, the government aims to create a robust, community-managed grain storage ecosystem.

Primary Agricultural Credit Societies (PACS)

  • Village-level cooperative institutions providing short-term credit and rural financial services
  • Serve as the primary interface between rural borrowers and the cooperative banking system
  • Function as conduits for agricultural credit delivery in India

Institutional Framework

  • National Level: Inter-Ministerial Committee (IMC) and National Level Coordination Committee (NLCC)
  • State Level: State Cooperative Development Committees (SCDCs)
  • District Level: District Cooperative Development Committees (DCDCs)

Supporting Schemes and Convergence Framework

1. Agriculture Infrastructure Fund (AIF)

  • Provides financing support and interest subvention
  • Offers 3% interest subvention, reducing effective loan rate to 1%

2. Agricultural Marketing Infrastructure (AMI) Scheme

  • Back-ended capital subsidy for construction of foodgrain storage facilities
  • Subsidy rate: 33.33%
  • NABARD acts as subsidy-channelising agency

3. Sub Mission on Agricultural Mechanization (SMAM)

  • Supports establishment of Custom Hiring Centres
  • Provides access to farm machinery

4. Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme

  • Promotes growth and formalisation of micro food processing units

Benefits and Significance

For Farmers

  • Avoids distress sales by providing flexible storage options
  • Improves price realisation through deferred selling
  • Creates additional income opportunities through diversified services
  • Reduces post-harvest losses through better storage infrastructure

For Supply Chain

  • Reduces transportation costs by bringing storage closer to production centres
  • Decreases dependence on distant warehouses
  • Improves connectivity between procurement centres, storage facilities, and Fair Price Shops

For Food Security Architecture

  • Strengthens decentralised food grain management
  • Complements Food Corporation of India's operations through assured hiring of godowns
  • Builds resilient rural infrastructure

Quality Standards and Monitoring

Construction Standards

  • Compliance with Warehousing Development and Regulatory Authority (WDRA) norms
  • Storage structures designed according to local environmental conditions
  • Emphasis on durable materials, proper ventilation, and safety measures

Institutional Monitoring

  • Regular inspections and quality audits
  • Project Management Consultants (PMC) provide construction updates
  • PACS members monitor project progress
  • Uniform branding guidelines for storage infrastructure

Selection Criteria for PACS

  • Identification Process: Approved by District Cooperative Development Committees (DCDCs)
  • Land Requirements: PACS should preferably own land (not waterlogged or in forest areas)
  • Consent: Required from PACS members for land utilisation
  • Lease Conditions: Leased land must have lease period exceeding 20 years

Constitutional and Legal Provisions

  • Cooperative Societies fall under State List (Entry 32) of the Seventh Schedule
  • Banking is in Concurrent List (Entry 37)
  • The initiative aligns with provisions supporting cooperative societies under Articles 19(1)(c) and 243ZH-243ZT

Conclusion

The Decentralised Grain Storage Plan represents a transformative approach to agricultural infrastructure, shifting from centralised storage models to community-based systems. By developing PACS into integrated rural service hubs, the initiative addresses multiple challenges simultaneously: reducing post-harvest losses, improving farmer incomes, strengthening food security, and creating sustainable rural employment opportunities through the cooperative framework.