Subsidy For Building Godowns In Rural Areas

Storage infrastructure is necessary for carrying over the agricultural produce from production period to the rest of the year. With most of the small farmers not financially sound to retain produce with them till the market prices are favourable, they need proper storage facilities to avoid wastage and reduce deterioration. Storage facilities also enable them to meet their credit requirement without being compelled to make distress sale of their produce.

Among the major agencies engaged in warehousing and storage, Food Corporation of India (FCI) constructs godowns for its own need of procurement and public distribution. The storage facilities of CWC and SWCs are by and large used by FCI, traders and for stocking fertilizers.

In 2000, a High Level Expert Committee set up by the government to consider various aspects of the problems related to storage of agricultural produce and to improve country’s storage space and also storage technology recommended creation of about 20 lakh tonne storage capacity in rural and semi-urban areas. The National Agriculture Policy has also emphasised creation of storage facilities for agri produce, particularly in rural areas. An Inter Ministerial Task Force set up by the Ministry of Agriculture has in its report recommended in 2002 that in addition to 78.83 MT available storage space in the country, 13 MT more space may be added during the 10th Plan period.   Of this, 9 MT was to be created in private and cooperative sectors. Similarly, the 11th Plan Working Group suggested for creation of 35 MT storage capacity with an investment of Rs. 7687 crore.

Accordingly, in 2001 the government launched Gramin Bhandaran Yojana for construction/renovation of rural godowns in the country. The main objectives of the scheme include creation of scientific storage capacity with allied facilities in rural areas to meet requirements of farmers for storing farm produce, processed farm produce, agricultural inputs, etc. and prevention of distress sale by creating the facility of pledge loan and marketing credit. The scheme is demand-driven and not location specific. Banks sanction the projects depending on the viability of the project.


The project for construction of rural godowns can be taken up by individuals, farmers, group of farmers/growers, partnership, proprietary firms, Non-Government Organizations (NGOs), Self Help Groups (SHGs), companies, cooperatives, federations, Agricultural Produce Marketing Committees, Marketing Boards and Agro Processing Corporations. Assistance for renovation of godowns is, however, restricted to godownsconstructed by cooperatives only.

Under the scheme, the entrepreneur is free to construct godown at any place, as per his/her commercial judgment except for the restriction that it should be outside the limits of the Municipal Corporation area. Rural godowns constructed in the Food Parks promoted by the Ministry of Food Processing Industries are also eligible under the scheme for assistance. Capacity of a godown is to be decided by the entrepreneur. However, subsidy under the scheme is restricted to a minimum capacity of 100 tonnes and maximum capacity of 10, 000 tonnes.

Rural godowns of smaller sizes upto 50 tonnes capacity are also eligible for subsidy under the scheme as a special case based on viability analysis. In hilly areas, where the project site is located at a height of more than 1000 meters above mean sea level, rural godowns of smaller sizes upto 25 tonnes capacity are also eligible for subsidy.

A capacity of 271.97 lakh tonne has been sanctioned by NABARD and NCDC all over the country since the inception of the scheme. It includes subsidy release of Rs. 666.36 crore and total investment of Rs. 5764.85 crore.

Subsidy Pattern:

Under the revised scheme, subsidy @ 25% is given to all categories of farmers, agriculture graduates, cooperatives and CWC/SWCs. All other categories of individual companies and corporations are given subsidy @ 15% of the project cost. In case of NE States/hilly areas and SC/ST entrepreneurs and their cooperatives and women farmers, subsidy is 33.33%.

The scheme is being implemented by the Directorate of Marketing and Inspection, Faridabad and its sub-offices through NABARD and NCDC. Awareness and training programmes under the scheme are organized by the National Institute for Agricultural Marketing (NIAM), Jaipur.

Budgetary allocation for the scheme during Tenth and Eleventh Five Year Plan is given below:

Year Allocation ( in Rs. Crore)
2002-03 64.86
2003-04 79.82
2004-05 100.00
2005-06 90.00
2006-07 70.00
2007-08 80.00
2008-09 70.00
2009-10 70.00
2010-11 90.00
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  1. Satish says:

    Dear Sir,
    I want to construct a ware house for our villages farmers and myself. I have 14 acre land in My Village.My father and mother are farmers.
    Kindly guide me about ware house project and is any gov Scheme for the ware House.Iam from the Mahashtra State from small village in Parbhani District.
    My father and mother are farmers.
    Kindly guide me about ware house project.

    With warm Regards,

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