Food Corporation of India to extend half of private storage depot leases

The food ministry has approved a policy to extend the leases for storage depots, built under the private entrepreneurs guarantee (PEG) scheme for grain storage by the Food Corporation of India (FCI). A 10-year lease period has recently lapsed in the case of almost half of the PEG capacity used by the FCI The aim of the scheme, launched in 2008, is to ensure uninterrupted supply of grains under a public distribution system.

Under the policy, which provides of guaranteed hiring of the godowns by the FCI, around 9 million tonnes (mt) capacity has been created in 465 odd depots. Leases of half of these capacities are up for renewal. The new leases will be for a period of 5 years in the grain procuring regions and 3 years in grain-consuming states, the sources said.

Under PEG scheme, grain storage capacity is created by private parties, the central warehousing corporation (CWC) and state government owned agencies for guaranteed hiring by the FCl. The construction of godowns and investment is carried out by the private entities, CWCs, SWCs and other agencies.

FCI will carry out region-wise rehiring of storage facilities those who have completed 10 years guarantee period and tender will be floated across regions where these godowns are built under PEG scheme.

According to an official note, the decision to rehire grain storage facilities created after the expiry of a guaranteed hiring period by FCI was a requirement for procurement of grains under  the National Food Security Act (NFSA). “The availability of stock under NFSA and Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) can’t be compromised,” the note stated. “The storage charges of PEG godowns are generally lower than that of CWC godowns,” it stated.

Currently, the FCI has about 38.91 mt of storage capacity (1990 odd depots), out of which around 38% or 14.82 mt capacity (565 depots), the corporation owns. Rest of the storage depots, FCI hires from CWC (3 mt/160 depots), state warehousing corporations (9 mt/670 depots) – both without guaranteed hiring—and PEG (9 mt/565 depots) – with guaranteed hiring – and others.

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