No rail link costs state godowns biz with FCI

Most of new storage facilities located in the rural areas

The state government has overseen a manifold increase in the capacity to store foodgrains over the last seven years, but much of it is not used by the Food Corporation of India (FCI) because it wants to use only those facilities that are linked to the railway.

Most of the new storage facilities are located in the rural areas, and are not on the rail network. The FCI’s refusal to store foodgrains in these facilities is leading to a delay in procurement. The FCI wants rail connectivity to cut down its fuel bills.

In 2014, Telangana’s godowns could store four lakh tonnes (LT) which has been increased to 25.4 LT now. The FCI has refused to use 151 godowns of the government’s marketing department which can store 5.94 LT of foodgrains.

During procurement, the government purchases paddy from farmers at the minimum support price (MSP) and sends the stocks to rice mills for milling. The FCI has to procure these stocks from the rice mills and store it in godowns for the public distribution system.

With the FCI not picking up stocks from the rice mills citing lack of storage, lakhs of tonnes of rice from the previous rabi and kharif seasons are lying with the millers. This is resulting in rice mills not taking more paddy for milling citing lack of storage space. This is in turn is delaying fresh procurement.

Official sources in the marketing department said that FCI has stored 10.65 LT of rice in godowns.

Of this, 43,895 tonnes were stored in its godowns and 55,169 tonnes with the TS Warehousing Corporation. The remaining 9 lakh tonnes were stored in private godowns. The marketing department’s 151 godowns of 5.94 LT capacity remain unutilised.

Marketing officials say that 9.16 LT of storage is available in godowns across the state but the FCI is not willing to utilise this space citing lack of rail connectivity.