'Land shortage cripples warehouse expansion plan'

Kolkata, Nov 4: One of the major hurdles in implementing the the Warehousing (Development and Regulation) Act-2007 that sought to build warehouses across the country to procure maximum agricultural produce, was the shortage of land, a top official said here Tuesday.

"There is no shame in saying that the government has failed to set up the required number of warehouses across the country and hence has decided to go for public-private-partnership from this year," said G. Mathialagan, director-personnel of the Central Warehousing Corp (CWC).

"In the 11th Five-Year Plan (2007-2012), it has been decided that warehouses with a total capacity of about 35 million metric tonnes would be set up across the country. But till August 2008, we have only 500 warehouses with a total capacity of about 10 million tonnes," Mathialagan told reporters.

"The government has not been able to procure adequate land for the project," he added.

The government will implement the new act, Warehousing 2008, with the participation of many actors, including including central and state government officials, warehouse operators from both public and private sectors, commodity exchanges and commodity traders, banks and insurance agencies, logistic operators and farmers' representatives.

According to Mathialagan, the mindset of the people is another barrier in the implementation of the act.

"Another obstacle in implementing the act is the mindset of the people. Majority of the warehouses are to be set up in villages. But most farmers are still inclined in stocking their produce either at their own yard or with moneylenders, rather than receiving negotiable warehouse receipts (NWRs)," he said.

NWRs, issued by warehouses registered under the act, are meant to help farmers avoid distress sale of their produce by ensuring finance against the crops stored in registered warehouses.

Farmers can also trade the NWRs and obtain finance against them.