KAMAL NAYAN KABRA
Among the missing or grossly inadequate infrastructure support facilities for the rural economy, particularly for enabling its farming segment to attain healthy growth, highly conspicuous inadequacy of warehouses in the rural areas capable of providing safe and sound storage for the farm produce would surely rank high. Among the factors responsible for it one can consider overall chronic mass poverty of rural India, small number of farmers with a reasonably large net marketable surplus, domination of the regulated market yards , numbering less than 8 thousand in a country with about six lakh villages , by merchant capital that finds the rate of return from warehousing a relatively unattractive candidate compared to alternative investment opportunities and high cost of land and limited capacity of the farmers to pay rentals sufficiently attractive for the private capital. Godowns by the panchayats on their own land built with the use of MNREGA labour on the basis of a technically appropriate blueprint or design given to them by the higher tiers of government along with lending of financial resources by the term lending development finance institutions, or mobilized specifically for his purpose by means of special purpose bonds with suitable tax breaks or, if other means fail to provide adequate funds, by drawing on the black wealth after the payment of applicable taxes but immunity from prosecution(provided a full and final disclosure to come clean once and for ever is made) can provide a network of lakhs of godowns in and around the villages.Its employment impact and o the building material industry are a source of real good externalities. The role given to the panchayats to enter as a big prop of support for the rural farm economy can give undreamt of advantages for strengthening the farm economy and the struggling small and marginal farmers in many diverse ways. Additionally this move can easily become one of the biggest blow for moving the PRIs towards financial viability, independence and capability to discharge many conventional functions of local government without having to depend on a flow of funds from the higher tiers of government.
However, the proposed Panchayati warehouses have to be supported by a number of complementary and concomitant measures. One primary step is to authorize the Panchayat warehouses to issue a negotiable warehouse receipt (WR) for the grains deposited with the warehouses and the WR has to be certified by the government as a valid collateral for short-term loans that can go up to 90 percent of the Minimum Support Price( MSP) based value of the grains deposited minus the rental for the grains. This measure of introducing the WR has been talked of in thin air without providing for a network of easily accessible network of rural godowns. It is clear that rural warehousing for the farm produce is something which has so far neither interested the corporate capital, despite a large and identifiable market for storage. Given tis experience one has reservations over the vain current hope to depend on the proposed FDI in retail to fill this glaring shortcoming of the post-harvest farm sector marketing network. Actually the problems of decentralized , highly dispersed location of godowns suitable for the farmers , say reachable by them at a low and affordable cost within a short distance , suitable for the farmers and yet attractive and practical for the investors, can be tackled by panchayati godowns as the cost of land and construction labour can be kept at a level that no other agency s capable of. The advantage of shared management with a voice for the gram sabha by the users is cannot be gainsaid. As we see below the capability of these rural godowns to serve the PDS effectively with low cost, regular delivery with little leakages to the PDS outlets can also be ensured by means of the rural Panchayaiwaehouses.
There has been little interest by the organized sector to tap this huge market at the bottom of the rural economy. This is not an activity or investment that can suit or interest big organized capital. On the other hand, pnchayati godowns are likely to be used by the farmers may be even for availing of better market prices by depositing their grains output against a WR andescape the compulsion of marketing in the immediate post-harvest season with bunched supplies and low prices and this way even out the flow of supplies over the year. The problem of cash crunch and exorbitant interest rates based loans with high transactions cost faced by the farmers too can be eased by the use of warehouses located in the vicinity by making it obligatory for the warehouse to issue a negotiable Warehouse receipt(WR) of the grains deposited with them. WR can also be used to reach the pubic procurement to every farmer in remote villages as well by the use of the Minimum Support Price (MSP) for recording the value of the produce deposited with the rural godowns. Thus the MPS need not remain just notional for the majority of the farmers as at present. The problems faced by the PDS outlets owing to limited rural location storage and avoidable cross movements of grains and the often faced inability to move them quickly and at a low cost without pilferage can also be eased if there are appropriate size godowns in and round the rural area that happen to be both major producing and consuming areas and more so now that about 90 per cent of the rural households are to be reached by the right to food law for heavily subsidized food grains. Of course the public procurement agencies have to make use of these godowns for storing the procured grains which may include locally preferred so-called coarse grains too. The advantage of local area location can thus help reduce the cost to the public exchequer and its subsidy outgo. Absence of such decentralized warehousing may cause food insecurity even during the times when the availability of food as such is not causing a headache.
A major advantage of rural location and size commensurate with the requirements of the hinter land, besides relatively low cost, is that dispersed local control and management can help reduce its bureaucratization that is often a major snag derailing rural development and welfare. Actually by giving the Panchayat Samitis at the block level the responsibility and resources ,mainly finance and technical support, a chain of cold storages can be built in thousands of our blocks to prevent the avoidable wastage of fruits and vegetables, especially of the perishable type and those with small local demand .
Be as it may, the short point is that good panchayat owned and managed rural godowns can prevent post-harvest wastage of valuable crops. How the stored grains output of the farmers can help increase the share of the ultimate producers in the consumers’ rupee by means of WR and rural godowns— the two go hand in hand--and strengthen the economy of the small and marginal farmers is simply enormous. With these facilities the farmers can be enabled to finally dispose of the stocks when the market is good in the lean season and thus avoid the loss inherent in immediate post-harvest sale. But none of this is possible without there being rural warehouse at small distances from the farms where the farmers can stock their marketable stocks for a few months and yet can get bank advance against the stocks left with the warehouses by means of the WRs. May be the rural warehouses can also be used at a relatively low for stocking the procured grains by the public agencies dealing with food security and ensure grater regularity with low cost of supplies. The villages are the main producing areas and with the new law the countryside can also become the major consuming areas too. Why transport and stock the grains that are ultimately proposed to be brought back to the village PDS shop by continuing the existing practices. This way the procurement agency would not be required to pay cash but the farmers can directly take loans against the security of the grains deposited with the warehouses. Thus the food credit system and ‘financialinclusion’ too is decentralized with assured repayment when the farmers dispose of their stocks at the time of their choice in order to take advantage of the market situation and the windfall so far going in to the coffers of the traders now becomes available o the farmers . This can generate a positive supply response in the subsequent rounds of the crop cycle and help increase production .
What we have argued o far shows that rural decentralized warehouses hold a great deal of potential for doing good to our rural economy, poor rural people and reduce the fiscal burden of managing food security without educing its coverage and effectiveness.
The critical factors are the construction in the shortest time a chain of lakhs of godowns in the rural areas on panchayat lands and wthhe use of MNREGA workers to avoid additional labour cost (synergy) with scientific arrangements of proper upkeep of the precious grains as we can waste the grains only at a great human cost in a chronically hunger-ridden country. What an enormous flow of externalities in terms of employment, income gains to the farmers, price gains to the consumers, reduced subsidy burden for the macro -and public economy and food security for the deprived, discriminated and excluded masses can well be imagined. This also gives the panchayat s an independent source of regular inflow of revenue that can be used for the local municipal functions without dependence on the higher tiers for every single paisa that has to be spent by the PRIs.
For all the reasons that we have suggested above, the at the village level the panhayat samitis for a chain of cold storages at the block level for fruits and vegetables . But the programme has to be a really ambitious one, say covering all the village pachayats in a matter of a few years. The positive contribution of the programme would surely go beyond food security, strengthening of the rural economy, a stable source of revenue for the Panchayats for local social services. Its help in curbing inflationary processes by evening out supplies and prevention of hoarding are also obvious.