New Delhi (ABC Live): India has now launched the world’s largest local grain storage reform through the “World’s Largest Grain Storage Plan in the Cooperative Sector,” approved on 31 May 2023. Until now, India’s food system relied mostly on large, central warehouses run by national agencies. However, the new plan clearly shifts storage control to village cooperatives (PACS). As a result, this scheme is not just about building godowns, but about changing how food buying, storage, credit, and prices work across rural India.

Moreover, this reform is also a key part of what ABC Live calls India’s Second Green Revolution, where progress comes from better storage, transport, credit, and processing—not only from higher crop output.
🔗 https://abclive.in/2025/11/29/second-green-revolution/

Core Goals of the Scheme

At its core, the plan aims to fix deep problems in the farm economy. Step by step, it seeks to:

• First, stop the distress sales by farmers

• Second, cut post-harvest losses

• Third, allow local MSP buying

• Fourth, control food price swings

• Finally, turn PACS into multi-use rural business hubs

Therefore, the plan uses combined funding from many government schemes, mainly:

• Agriculture Infrastructure Fund (AIF)

• Agricultural Marketing Infrastructure (AMI)

• Farm Mechanisation Mission (SMAM)

• PM Formalisation of Micro Food Processing (PMFME)

• Public Distribution System (PDS)

What Is Being Built at the Village Level

Under this plan, each PACS is slowly turned into a full rural service centre. In simple terms, this includes:

• Safe grain godowns

• Custom hiring centres for farm tools

• Small food processing units

• Fair price shops

• Internal roads, weighing systems, and boundary walls

As a result, PACS are no longer only loan offices. Instead, they become local hubs for storage, services, and public supply.

Why Earlier Grain Storage Systems Fell Short

Food Corporation of India (FCI) – Since 1965

For nearly 60 years, most grain storage was run by the Food Corporation of India (FCI). No doubt, FCI built a strong national network for buying and moving grain. However, the system stayed highly centralised. Because of this, farmers had to depend on faraway depots.

ABC Live’s full report on FCI’s role is available here:
🔗 https://abclive.in/2025/10/12/food-corporation-of-india/

Central & State Warehousing Corporations

Likewise, government warehouse companies built large storage units near cities and rail routes. Even so, PACS were left out of ownership. So, price control at the village level stayed weak.

Gramin Bhandaran Yojana (2001)

Later, the Rural Godown Scheme aimed to stop distress sale. But in practice, most godowns went to private traders, not cooperatives. As a result, MSP and ration supply links stayed weak.

Private Entrepreneurs Guarantee (PEG) Scheme (2008)

After the world food crisis, private godowns grew fast under payment guarantees. Yet, PACS stayed outside the system. So, farmers did not gain real control over storage.

Silo-Based Storage (After 2015)

Steel silos cut waste and sped up handling. Still, they stayed far from villages and needed heavy spending. Thus, small farmers saw little direct benefit.

Decentralised Procurement Scheme (DCP)

Some states started buying grain locally. But, storage still stayed with FCI and state firms. So, local buying and local storage never fully came together.

What are the 2023 PACS Plan Changes

Therefore, unlike past schemes that only added space, this plan fixes the ownership gap at the heart of India’s food system.

Problems Found in the Pilot Phase

However, the trial phase also showed many roadblocks:

Key Fixes Made by the Government

✔ Loan Period Extended

First, loan payback time was increased from 2+5 years to 2+8 years, reducing yearly stress on PACS.

✔ New Cost & Subsidy Rates

Also, an extra subsidy was added for roads, walls, and weighing systems.

✔ 9-Year Hiring Promise by FCI

Most importantly, FCI agreed to rent godowns for 9 years if size is 2,500 MT or more. Because of this, banks began giving loans.

✔ Scheme Opened Beyond PACS

Now it also covers:

• Other cooperatives

• Cooperative federations

• Multi-State Cooperative Societies (MSCS)

National Progress So Far (as of 15 Nov 2025)

So, while planning is wide, actual building is still slow.

Where Storage Is Being Built the Most

Thus, almost 89% of total storage lies in just two states.

State Performance Grades

• A: Rajasthan

• B: Maharashtra

• C: Gujarat, UP, Assam, Tamil Nadu, Karnataka, Telangana, MP, Uttarakhand, Tripura

• D: Odisha, Jharkhand, Haryana, Chhattisgarh, J&K, HP

• E (No Entry): Punjab, Bihar, Andhra Pradesh, Nagaland, Meghalaya, Manipur, Arunachal Pradesh

Notably, Punjab, Bihar, and Andhra Pradesh grow large quantities of grain but still show no entry in this plan.

Cost Per Metric Tonne (Plain Areas)

So, a 2,500 MT godown costs about ₹1.75 crore, with about ₹58 lakh subsidy and ₹99 lakh bank loan.

PACS Financial Stress Test (Simple View)

Hence, below 80–85% use, PACS may struggle to stay profitable.

Effect on Food Price Swings

So, the more storage moves closer to villages, the narrower food price swings become.

Why Training and Education Matter

Finally, the success of this plan depends on trained PACS staff, simple accounting skills, and basic technical know-how. That is why, modern farm education reforms are closely linked to this project.
🔗 https://abclive.in/2025/11/04/modern-agriculture-education/

Quick Policy Snapshot for Lawmakers

Legal & Policy Value

As a result, the plan:

• Weakens the old FCI storage monopoly

• Builds local buffer ownership

• Helps India defend food support at the WTO

• Fits within India’s:

  • Food Security Law

  • Essential Commodities Law

  • Cooperative Laws

If Half the PACS Get Built (Future View)

If even 50% of PACS build 2,500 MT godowns, India could gain:

• 8.8 million MT of local storage

• 25–30% drop in load on big central godowns

• 15–20% fall in storage waste

• MSP payment time cut to 7–10 days

• Strong rural job growth

ABC Live Final View

India has now fixed the money design of grain storage. What still holds it back is slow state action, uneven PACS strength, and weak local control in key grain states.

So, this scheme will either become:
✅ A true food-security shift, or
⚠️ Just another partly finished flagship plan.

Official Source

This analysis is based on a written reply by Union Minister for Home & Cooperation Shri Amit Shah in the Rajya Sabha on 10 December 2025, issued by PIB Delhi.

Exact URLs (For Copy-Paste Footnotes / Hyperlinks)

1. World’s Largest Grain Storage Plan — PIB (22 Jul 2025)
   https://www.pib.gov.in/PressReleasePage.aspx?PRID=2146718&reg=3&lang=2 Press Information Bureau

2. World’s Largest Grain Storage Plan — earlier PIB (26 Mar 2025) summary
   https://www.pib.gov.in/PressReleasePage.aspx?PRID=2115198&reg=3&lang=2 Press Information Bureau

3. Official Margdarshika / SOP Document (Ministry of Cooperation) for the Plan
   (PDF) https://www.cooperation.gov.in/sites/default/files/2025-08/WLGSP%20English%20Margdarshika%20SOP.pdf Cooperation Ministry

4. Rural Godown Scheme (Gramin Bhandaran Yojana) official page — DMI
   https://dmi.gov.in/Schemegby.aspx dmi.gov.in

5. NABARD’s Warehouse Infrastructure Fund / Storage Financing page
   https://www.nabard.org/content1.aspx?catid=8&id=571&mid=8 NABARD

6. Central Warehousing Corporation background & statutory role
   https://en.wikipedia.org/wiki/Central_Warehousing_Corporation (for institutional background — or refer to official CWC Act documents)