India Upgrades Grain Storage Policy Under PACS-Based Pilot Project

India Strengthens Grain Storage Policy After Pilot Phase of Cooperative Sector Mega Plan

India’s pilot project under the “World’s Largest Grain Storage Plan in the Cooperative Sector” has led to major policy enhancements designed to modernise food-grain storage at the Primary Agricultural Credit Society (PACS) level. The initiative aims to bridge national storage gaps by integrating multiple central schemes to create a unified, efficient and scalable agri-infrastructure ecosystem.

Design and Convergence of the Grain Storage Plan

The project focuses on developing godowns, processing units, Fair Price Shops and Custom Hiring Centres through the coordinated use of schemes such as AIF (Agriculture Infrastructure Fund) , AMI (Agricultural Marketing Infrastructure) , SMAM , and PMFME . Implementation began after cabinet approval in May 2023 , with regular progress assessments by designated field agencies.

Lessons Drawn From the Pilot Rollout

The pilot phase revealed several systemic challenges, including outdated AMI construction norms, the limited financial ability of many PACS, and the absence of standardised documentation. It also highlighted delays caused by a lack of hiring assurances for newly built godowns. Importantly, the study emphasised the need to align PACS selection with storage-deficit regions identified by procurement and warehousing authorities.

Major Policy Upgrades Introduced

Responding to these findings, the government rolled out a series of reforms. Cost norms were updated to ₹7,000/MT for plains and ₹8,000/MT for northeastern states. Loan repayment under AIF now follows a 2+8-year structure. Subsidy support for PACS was expanded to 33.33% , including funding for essential ancillary components such as weighbridges and internal roads. A set of SOPs, model DPRs and unified documentation templates was issued to standardise implementation nationwide.

PACS as Multipurpose Rural Centres

The pilot also demonstrated how PACS godowns can operate as integrated hubs for procurement, FPS operations and equipment hiring services. The scheme has now been broadened to cover all cooperative societies and federations , enabling nationwide scaling of rural storage infrastructure to reinforce India’s food-security architecture.

Exam Point

• Plan approved on 31 May 2023 for the cooperative sector.

• Revised construction norms: ₹7,000/MT (plains) and ₹8,000/MT (NE) .

• 33.33% subsidy for PACS with support for ancillary works.

• FCI provides 9-year hiring assurance for PACS godowns ≥ 2,500 MT.