FCI's storage costs for wheat goes up
Chandigarh, June 19 -- : The Food Corporation of India (FCI) is facing an additional logistics cost of at least Rs.100 per quintal for storing wheat in steel silos across Punjab. With a total silo storage capacity of 9.85 lakh tonnes in the state, the cost hike could amount to nearly Rs.100 crore, officials familiar with the development said.
The increase in costs follows a decision by the FCI to reduce the commission, known as "dami", paid to arhtiyas (commission agents) for storing wheat in silos. The commission has been halved, from Rs.46 per quintal to Rs.23 per quintal.
Steel silos, which are designed to extend the shelf life of wheat for up to five years by storing it in vacuum-like conditions, have been a key part of the FCI's grain management strategy. However, the reduction in commission has led to significant opposition from arhtiyas and farm bodies, who discouraged farmers from delivering wheat directly to silos.
A senior official from the Punjab food department, speaking on condition of anonymity, explained the current workaround: "We are left with no choice but to first store wheat in gunny bags at godowns before transferring it to silos. This additional handling adds around Rs.100 per quintal in logistics costs." The decision to cut the commission was justified by the FCI on the grounds that arhtiyas have a reduced role in managing the produce once it enters the silos. However, arhtiyas argue that differentiating the wheat for silo storage from the general mandi stock is a complicated process.
A senior FCI official acknowledged the challenges, saying: "We understand that any new proposal takes time for full acceptance. Once more silos are constructed, specific mandis will be linked to designated silos." Punjab currently has 16 silo locations across the state, including Amritsar, Faridkot, Gurdaspur, Moga, Patiala, Sangrur and Ludhiana. Of the 9.85 lakh tonnes total silo capacity, the FCI controls 7.85 lakh tonnes, while the state agency Pungrain manages the remaining 2 lakh tonnes.
The Adani Group operates a significant portion, managing 2.25 lakh tonnes in Faridkot, Moga, and Sangrur, which holds the largest silo space at 3 lakh tonnes.
Two years ago, the FCI proposed constructing additional silos with a combined capacity of 11 lakh tonnes under a Rs.881 crore build-own-operate (BOO) model. However, the Punjab government rejected the proposal, citing the halved commission as the primary concern....
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