Expressing concerns over the higher logistics cost in India, food and consumer affairs minister Piyush Goyal has asked public sector Central Warehousing Corporation (CWC) to provide comprehensive services like testing labs to reduce logistics cost and boost farmers’ income.
He has also asked the CWC, whose main business is storage of food grains, to modernise its facilities and increase the storage capacity by manifold at the earliest from current 130 lakh tonne to meet challenges of a growing farm sector and ensuring holistic storage solutions for the farmers.
Addressing the foundation day of the CWC, the minister said that the logistics cost in India is 13-14% of the total value of the products as compared with 7-8% in many other countries. “The logistics cost has become competitive across the world,” Goyal said, adding India becomes uncompetitive because of this reason and cheaper products from other countries flooded the country.
He asked top officials of CWC to set a target for exponential growth in the next five years. He also directed them to complete all the 177 projects, sanctioned since 2014, so that 14 lakh tonne of additional storage can be created.
Earlier, food secretary Sudhanshu Pandey said that announcement on asset monetisation was an important aspect of the FY22 Budget and CWC’s “step by step approach perhaps is no longer acceptable”. He further said: “we want a big leap forward. Your (CWC) presence across 423 centres should now demonstrate that you can leverage over 3,500 acres of land parcel for mobilising private sector investment, technology and best practices.”
Pandey also advised CWC to select some clusters under the Operation Green scheme and provide a complete logistics chain and warehousing services to farmers by collaborating with them as well as with the private sector. Finance minister Nirmala Sitharaman had announced in her FY22 Budget speech that 22 perishable crops will be covered under Operation Green from current three – tomato, onion and potato. Under the scheme, the government subsidises freight by 50% to transport the crops from producing region to consuming centres, besides disbursing assistance to build cold chain infrastructure.
The minister also said that the CWC should collaborate with the Bureau of Indian Standards (BIS) and Quality Control of India to provide “holistic solutions” at its warehouses. Goyal said the CWC should provide services such as measuring and testing facilities, which will not only boost the demand of warehouses but reduce the logistics cost, thereby benefitting both farmers and industry.
Complimenting CWC’s contribution in the distribution of foodgrains during the Covid-19 pandemic, he said it is expected to post a record turnover of Rs 1,800-1,900 crore this fiscal and also distribute a record dividend. The CWC achieved the highest ever turnover of Rs 1,710 crore during 2019-20.
He said the CWC’s warehouses should provide a safety net to farmers by providing storage facilities at a reasonable price and helping farmers in achieving better price realisation for their produce. The minister said that the CWC should fulfill the warehousing need of the country through partnership with private sector enterprises.
Goyal said public and private sector firms should work together to improve efficiency and output. They must learn from each other. “Let’s not limit our vision by any constraints whatsoever,” he told the public sector company’s officials.