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Food Security Bill Can Expedite Expansion Plan Ananda Bose

Since last 50 years PSU nbsp b Central Warehousing Corporation CWC b nbsp nbsp has been nbsp providing logistics support to the agricultural sector In an exclusive conversation with nbsp b Ritwik Sinha b nbsp Chairman CWC nbsp CV Ananda Bose explains challenges related to the National Food Security Act nbsp


Ananda Bose
Chairman Central Warehousing Corporation
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Excerpts:The CWC  is a major player  when we talk of foodgrain storage and  there have been moves to develop strength in providing warehousing facilities for non-food commodities as well.

Now private players have also emerged in the warehousing space. My first question to you is: how do you assess the positioning   of CWC in the market today?CWC is clearly one of the key players in the field of warehousing in the country. In terms of storage capacity, it is next only to Food Corporation of India (FCI). In fact, warehousing has received an impetus in the country in the context of National Food Security Act. Its no secret to anybody that the spurt in agricultural production in the country does not have the support of adequate storage capacity. It is true of warehouses in general and cold storages in particular. In fact, whenever there is the case of surplus in agricultural production, we come across crisis of storage kind of situation. And open air storage invites a lot of criticism. No gain saying that we have to find a way out of it. And this is a momentous task which government agencies alone can't do. So this is an area where I find somekind of handholding is necessary between government and non-government entities. Fortunately for this country, private players are also coming up in the warehousing sector in a big way.  In the agricultural sector, the cost of storage is equally important as the availability of storage. So we have to lay equal emphasis on the cost reduction of storage and increase the capacity simultaneously in this country. In this context, CWC has to play a very important role along with emerging players in the warehousing sector.As per an estimate, presently 55 percent of your storage capacity is utilized for food items.

 Would you like to see reduction in this ratio?Ans:  There is no conscious plan as such. By and large, the present ratio will probably remain because our main focus is on food items though there could be slight variation every now and then depending upon the demand situation in the market. How do you assess Food Security Bill? Is it a good news for you or will it put additional pressure on CWC?Certainly, it is going to put additional pressure but there are two views on that. Firstly, the new problems thrown up in the process of implementation of this bill have to be seen. But there is another side to it also. When the food distribution picks up, we hope the need to store foodgrains over a longer period of time may not be there. So it will be balanced out somewhere. But in our long term perspective, we find that the National Food Security Act and its implementation will throw more requirements for storage in this country.Will it force you to expedite your expansion plans in someway?That is one positive factor as the bill would give a fillip to our expansion programme. But as I said we are going to respond to the emerging demand in the market in every sector. And alongwith diversification, we would like to lay emphasis on modernization and introduction of new technology in food storage.I know your inning at the helm of CWC has just commenced.

 But tell me, what are those near run milestones which CWC would like to change? When I say near run, I am broadly asking for next two years' scenario?We have a clear road map and in the next two years, our intention is to double our turnover. Presently, it is over Rs 1400 crore. So when we say we want to double our revenue, it means    that our activities in different sectors that we have embarked upon have also to double. In some cases, in fact, it has to go beyond that.And to achieve this, what kind of expansion you will have to undertake in mid-tier infrastructure assets? For instance, you have over 460 warehouses with a storage capacity of over 10 million tonnes. What kind of expansion you would look here?I wouldn't specify any particular number. But given our broader objective, we will have to necessarily increase the number of warehouses with us - either directly owned or taken on lease. This will also take into the account certain variables in the field. For instance, we have yet to make an assessment of the impact made by the private players in different pockets of the country. Our primary purpose is to see that there is adequate storage space is created in the country wherever it is required. As a strategic move, we will now be focusing on those states and regions of the country which are currently under-served as far as warehousing facilities are concerned. For example, Bihar and Jharkhand where we find a tremendous gap in the demand and supply of storage space. So we will take these two states and certain areas in some other states which are inadequately served by CWC and other warehousing service providers.

 Its going to be a selective approach for expansion.You emphatically underlined that you have a national role to play and we know that you have a fair degree of presence in the hinterland. In that context, how would you explain your engagement with the rural India and the farmers' community in particular?CWC's actual focus is on rural India. And it stems from our primary concern relating with the foodgrains and agricultural produce. As we know, it generally happens that in rural India during the harvesting period, the farmers are often forced to indulge in distress sale of their produce mainly because there aren't enough storage space close to their location. And that is an area where CWC is trying to provide support to the farmers. In fact, in the rural pockets where we are strongly positioned, we are providing that essential link between the producing farmers and the consumer market. This is a very important role for us and expanding it further is our core agenda.What is your role in the rural India economy since that Negotiable Warehousing Receipt (NWR) scheme has come into the play? Yes. NWR is something which has come as an answer to the basic post-harvest need of the farmer. This financial instrument indeed helps the farmer in a big way. And CWC is a major player in providing the facilities which is in alignment with NWR objective.You are also running some extensive farmers' 'training programme in different pockets of the country.

 What is the basic nature of these programmes? We are doing it because we find that the capacity building in rural India is very important. All the modern technologies that we talk about - be it with the harvest or storage or minimizing wastages   - its important that farmers understand them. Our programmes are tailor made to mainly teach them post-harvest management practices, pest control practices, etc. Our purpose is related to the mandate given to CWC and that is why we have undertaken the training exercise in a big way. We have our own training institute. But apart from this institute, in the field also we undertake training programmes on a regular basis. As per our estimates, over 2.25 lakh farmers participated in different training programmes conducted by us in more than 5000 villages in 2012-13.

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