World’s Largest Grain Storage Plan in the Cooperative Sector

India’s plan to create a nationwide network of grain warehouses through agricultural cooperatives has reached 313 completed facilities, adding 1.80 lakh metric tonnes of storage capacity at the grassroots level.

Under the government’s official program, 1,015 Primary Agricultural Credit Societies have been identified for the construction of godowns. Work has been completed at approximately 31 per cent of these societies, according to information presented in the Lok Sabha on July 28, 2026.

The programme seeks to move a greater share of India’s agricultural storage, procurement and primary processing infrastructure closer to villages. Instead of transporting produce immediately to distant mandis or warehouses, participating PACS can store grain locally, provide machinery, undertake basic processing and connect farmers with government procurement and public-distribution channels.

Rajasthan and Andhra Pradesh Lead Construction

Of the 313 completed godowns, Rajasthan accounts for 121 and Andhra Pradesh for 117. Together, the two states represent 238 facilities, or about 76 per cent of all godowns completed under the plan so far.

Gujarat has constructed 44 godowns, followed by Maharashtra with 19 and Tamil Nadu with five. Telangana, Uttar Pradesh, Assam, Madhya Pradesh, Tripura, Uttarakhand and Karnataka have completed one facility each.

The current 1.80 lakh metric tonnes of capacity translates to an average of about 575 tonnes for each completed facility, although the size of individual godowns may differ according to local production, land availability, financial viability and procurement demand.

The concentration of completed projects in a few states indicates that implementation capacity, cooperative readiness, access to finance and availability of suitable land will influence the pace at which the programme expands nationally.

Bihar Identifies 36 PACS

Bihar has identified 36 PACS for participation in the programme. Of these, 27 societies, including four in West Champaran district, have applied for assistance under the Agricultural Marketing Infrastructure scheme.

Construction has commenced at the four selected PACS in West Champaran. Earlier official information indicated that the 36 Bihar societies were spread across nine districts and together represented proposed storage capacity of around 1.045 lakh metric tonnes.

Successful implementation in Bihar could be particularly significant because local storage would allow farmers to retain produce after harvest instead of selling immediately because of limited warehousing options.

PACS to Become Rural Agricultural Service Centres

The programme extends beyond the construction of conventional grain godowns. Participating PACS may develop a combination of agricultural facilities, including:

• scientific warehouses;
• custom hiring centres for agricultural machinery;
• sorting, grading and processing units;
• Fair Price Shops;
• procurement centres; and
• other infrastructure suited to local production patterns.

This approach is intended to transform PACS from primarily credit-oriented institutions into multipurpose rural enterprises capable of supporting farmers across the agricultural value chain.

A farmer could potentially obtain credit from the cooperative, hire machinery for cultivation, deliver harvested grain to the same society, use its storage or processing facilities and access procurement channels without travelling repeatedly to distant locations.

The model can also provide PACS with additional sources of income from warehousing, machinery rental, processing, handling and public-distribution operations. This diversification may improve the financial viability of societies that currently depend heavily on lending activity.

Scheme Convergence Replaces a Standalone Funding Structure

The grain-storage programme does not operate through a single newly created funding window. It uses the approved allocations and benefits available under several existing central government schemes.

These include the:

• Agriculture Infrastructure Fund;
• Agricultural Marketing Infrastructure scheme;
• Sub-Mission on Agricultural Mechanisation; and
• Pradhan Mantri Formalisation of Micro Food Processing Enterprises scheme.

Different components of a PACS project can therefore be supported through different programmes. A godown may receive assistance under the Agricultural Marketing Infrastructure scheme, machinery may be financed through the mechanisation programme, and a processing unit may draw support from the PMFME framework.

This whole-of-government structure is designed to combine existing subsidies, credit support and institutional resources instead of creating parallel schemes for every facility. Its effectiveness will depend on clear coordination among ministries, banks, state governments and cooperative institutions.

Financial Rules Modified to Improve Viability

The government has modified the Agriculture Infrastructure Fund and Agricultural Marketing Infrndia’s plan to create a nationwide network of grain warehouses through agricultural cooperatives has reached 313 completed facilities, adding 1.80 lakh metric tonnes of storage capacity at the grassroots level.

Under the government’s officially named World’s Largest Grain Storage Plan in the Cooperative Sector, 1,015 Primary Agricultural Credit Societies have been identified for the construction of godowns. Work has been completed at approximately 31 per cent of these societies, according to information presented in the Lok Sabha on July 28, 2026.

The programme seeks to move a greater share of India’s agricultural storage, procurement and primary processing infrastructure closer to villages. Instead of transporting produce immediately to distant mandis or warehouses, participating PACS can store grain locally, provide machinery, undertake basic processing and connect farmers with government procurement and public-distribution channels.

Rajasthan and Andhra Pradesh Lead Construction

Of the 313 completed godowns, Rajasthan accounts for 121 and Andhra Pradesh for 117. Together, the two states represent 238 facilities, or about 76 per cent of all godowns completed under the plan so far.

Gujarat has constructed 44 godowns, followed by Maharashtra with 19 and Tamil Nadu with five. Telangana, Uttar Pradesh, Assam, Madhya Pradesh, Tripura, Uttarakhand and Karnataka have completed one facility each.

The current 1.80 lakh metric tonnes of capacity translates to an average of about 575 tonnes for each completed facility, although the size of individual godowns may differ according to local production, land availability, financial viability and procurement demand.

The concentration of completed projects in a few states indicates that implementation capacity, cooperative readiness, access to finance and availability of suitable land will influence the pace at which the programme expands nationally.

Bihar Identifies 36 PACS

Bihar has identified 36 PACS for participation in the programme. Of these, 27 societies, including four in West Champaran district, have applied for assistance under the Agricultural Marketing Infrastructure scheme.

Construction has commenced at the four selected PACS in West Champaran. Earlier official information indicated that the 36 Bihar societies were spread across nine districts and together represented proposed storage capacity of around 1.045 lakh metric tonnes.

Successful implementation in Bihar could be particularly significant because local storage would allow farmers to retain produce after harvest instead of selling immediately because of limited warehousing options.

PACS to Become Rural Agricultural Service Centres

The programme extends beyond the construction of conventional grain godowns. Participating PACS may develop a combination of agricultural facilities, including:

scientific warehouses;

custom hiring centres for agricultural machinery;

sorting, grading and processing units;

Fair Price Shops;

procurement centres; and

other infrastructure suited to local production patterns.

This approach is intended to transform PACS from primarily credit-oriented institutions into multipurpose rural enterprises capable of supporting farmers across the agricultural value chain.

A farmer could potentially obtain credit from the cooperative, hire machinery for cultivation, deliver harvested grain to the same society, use its storage or processing facilities and access procurement channels without travelling repeatedly to distant locations.

The model can also provide PACS with additional sources of income from warehousing, machinery rental, processing, handling and public-distribution operations. This diversification may improve the financial viability of societies that currently depend heavily on lending activity.

Scheme Convergence Replaces a Standalone Funding Structure

The grain-storage programme does not operate through a single newly created funding window. It uses the approved allocations and benefits available under several existing central government schemes.

These include the:

Agriculture Infrastructure Fund;

Agricultural Marketing Infrastructure scheme;

Sub-Mission on Agricultural Mechanisation; and

Pradhan Mantri Formalisation of Micro Food Processing Enterprises scheme.

Different components of a PACS project can therefore be supported through different programmes. A godown may receive assistance under the Agricultural Marketing Infrastructure scheme, machinery may be financed through the mechanisation programme, and a processing unit may draw support from the PMFME framework.

This whole-of-government structure is designed to combine existing subsidies, credit support and institutional resources instead of creating parallel schemes for every facility. Its effectiveness will depend on clear coordination among ministries, banks, state governments and cooperative institutions.

Financial Rules Modified to Improve Viability

The government has modified the Agriculture Infrastructure Fund and Agricultural Marketing Infrastructure guidelines to make PACS projects easier to finance.

Under the Agriculture Infrastructure Fund, the credit-guarantee arrangement has been extended from a “2+5-year” structure to a “2+8-year” structure, as stated in the official reply. This gives eligible projects a longer support horizon for loans used to create agricultural infrastructure.

Under the Agricultural Marketing Infrastructure scheme, the promoter’s margin-money requirement has been reduced from 20 per cent to 10 per cent. The change lowers the amount that a cooperative must contribute from its own resources before securing project finance.

Recognised construction costs have also been revised to reflect higher expenditure on modern warehouses. The admissible cost has increased from ₹3,000–₹3,500 per tonne to ₹7,000 per tonne in plain regions. For the northeastern states, it has risen from ₹4,000 to ₹8,000 per tonne.

The subsidy rate has been raised from 25 per cent to 33.33 per cent. In plain areas, the subsidy has increased from ₹875 to ₹2,333 per tonne, while the amount for northeastern states has risen from ₹1,333.33 to ₹2,666 per tonne.

PACS can receive additional assistance equal to one-third of the admissible subsidy for supporting infrastructure such as internal roads, weighbridges and boundary walls. These facilities are essential for operating a commercial warehouse but are often difficult for smaller cooperatives to finance independently.

FCI Demand Mapping Provides a Commercial Anchor

One of the programme’s most important features is its connection with the storage requirements of the Food Corporation of India.

FCI has identified a requirement of approximately 26.03 lakh metric tonnes at 216 potential locations across 18 states and Union Territories. This mapping is intended to guide warehouse creation towards areas where public foodgrain operations require additional capacity.

FCI has also provided a uniform hiring assurance of nine years for eligible warehouses. The assurance applies to godowns with a capacity of at least 2,500 metric tonnes in most regions and 1,671 metric tonnes or more in northeastern and hilly areas.

A long-term hiring commitment can improve project viability by giving a PACS greater certainty about warehouse utilisation and rental income. It can also make banks more willing to finance construction because the facility has an identified institutional user.

The arrangement does not mean that every participating godown will automatically be hired by FCI. Projects will still need to meet applicable capacity, location, quality and operational requirements.

Local Storage Can Reduce Distress Sales

Farmers frequently face pressure to sell produce immediately after harvest, when large quantities enter the market and prices may be relatively weak. Limited storage can leave them unable to wait for better market conditions.

A PACS-level warehouse can provide an alternative by allowing grain to remain closer to the producing village. Where financing and warehouse-receipt systems are available, farmers may also be able to use stored produce to obtain short-term credit rather than selling solely to meet immediate cash requirements.

The government expects decentralised storage to reduce post-harvest losses, strengthen food security and improve farmers’ ability to negotiate prices.

These benefits will depend on whether facilities maintain scientific standards for moisture control, ventilation, pest management, weighing, record-keeping and insurance. A poorly managed warehouse may simply relocate storage losses from one place to another.

Procurement and Distribution Can Become More Efficient

The proposed integration of procurement centres, godowns and Fair Price Shops can shorten the physical movement of foodgrain.

Under a conventional system, produce may travel from villages to procurement centres, then to large warehouses and later return to nearby regions for distribution through the public-distribution system. Local procurement and storage can eliminate part of this repeated transportation.

Reduced movement can lower handling expenses, fuel use, transit losses and pressure on distant storage depots. It may also enable procurement agencies to reach farmers in areas where access to established purchase centres remains limited.

PACS are well placed for this role because they are rooted in village economies and often have long-standing relationships with member farmers. Their local knowledge can support aggregation, procurement scheduling and communication about quality requirements.

Processing Facilities Can Add Value Before Sale

The inclusion of processing units distinguishes the programme from a warehouse-only initiative.

Facilities for cleaning, sorting, grading, milling or packaging can improve the marketability of agricultural produce before it leaves the village. Farmers generally receive lower returns when they sell unprocessed commodities containing impurities or mixed grades.

Primary processing can create standardised lots suitable for institutional buyers, food-processing companies and organised retail networks. It may also generate local employment in machine operation, quality control, packaging, transport and warehouse management.

The programme’s convergence with PMFME can support the development of small food-processing enterprises around locally available crops. A PACS in a pulse-growing area, for example, could combine storage with cleaning and dal-processing facilities, while a society in a millet-producing region could develop grading and packaging operations.

Custom Hiring Centres Can Support Small Farmers

Many small and marginal farmers cannot economically purchase tractors, harvesters, threshers and specialised agricultural equipment for individual use.

Custom hiring centres allow PACS to acquire machinery and rent it to members according to seasonal requirements. This can improve access to mechanisation while distributing the cost across a large number of users.

Locating machinery services beside storage and processing infrastructure can create an integrated agricultural hub. The cooperative can support cultivation before harvest and then provide aggregation, handling and marketing services afterwards.

Efficient scheduling, trained operators, transparent rental charges and regular maintenance will be essential to prevent machinery from remaining underused.

Implementation Quality Will Determine Long-Term Success

The increase from 11 completed PACS godowns reported under the early pilot to 313 facilities by July 2026 shows that construction has accelerated considerably. The programme, however, must ultimately be judged by the operation of the infrastructure rather than the number of buildings completed.

Warehouses require professional management, digital inventory systems, regular inspection, insurance and reliable links with procurement agencies and markets. PACS personnel will need training in commercial operations, foodgrain preservation, accounting and regulatory compliance.

Project selection must also be based on realistic estimates of local production and demand. Excess capacity in unsuitable locations could leave cooperatives with loan obligations and limited revenue, while undersized facilities in major procurement areas may fail to meet local requirements.

Strong monitoring by state- and district-level cooperative development committees can help coordinate approvals, finance and implementation. The government has established such committees under chief secretaries and district collectors to integrate the programme with state policies and local development plans.

Building a Village-Level Agricultural Economy

The grain-storage plan represents an attempt to reorganise agricultural infrastructure around the cooperative network. Its larger purpose is to keep a greater share of storage, processing, service delivery and economic activity within rural areas.

When properly managed, a participating PACS can serve simultaneously as a lender, machinery provider, procurement point, warehouse operator, processor and Fair Price Shop. This structure can lower transaction costs for farmers while creating a sustainable business model for the cooperative.

With 1,015 societies identified and 313 godowns completed, the programme has moved beyond its initial demonstration phase. Its next challenge is to extend construction across more states, connect viable facilities with FCI and other buyers, and ensure that completed assets deliver measurable benefits to farmers.

The transformation from a rural credit society into a full agricultural service centre will require capable management and consistent utilisation. If these conditions are achieved, decentralised cooperative storage could strengthen India’s foodgrain system while giving farmers greater control over when, where and how their produce is sold.

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References

Press Information Bureau, Government of India. “World’s Largest Grain Storage Plan in the Cooperative Sector.” Ministry of Cooperation, 28 July 2026. Release ID: 2290531.

Ministry of Cooperation, Government of India. “World’s Largest Grain Storage Plan in Cooperative Sector.” Official programme overview, updated June 2026.

Press Information Bureau, Government of India. “World’s Largest Food/Grain Storage Plan.” Ministry of Cooperation, 1 August 2023. Release ID: 1944662.

Press Information Bureau, Government of India. “Strengthening Cooperative.” Ministry of Cooperation, 24 March 2026. Release ID: 2244574.

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