S Ahmad
India’s agricultural story is often told through the numbers of production. A record harvest is celebrated as a sign of progress, food security and the strength of the country’s farmers. But there is another question that deserves equal attention: after the grain is produced, where does it go?
That question may appear simple, but it lies at the heart of India’s agricultural economy.
According to the Third Advance Estimates for 2025-26, India’s foodgrain production is estimated at 376.563 million tonnes, an increase of nearly 18.8 million tonnes, or 5.3 per cent, over the previous year’s estimated production of 357.732 million tonnes. Such an increase is a remarkable achievement. It reflects the continuing contribution of millions of farmers, improvements in agricultural practices, irrigation, technology and public investment.
But higher production creates a corresponding responsibility.
Every additional tonne of grain needs to be cleaned, dried, transported, stored, protected and eventually marketed or distributed. If storage capacity does not grow alongside production, the benefits of higher agricultural output can be weakened by post-harvest losses, distress sales, transportation costs and inefficient supply chains.
This is why India’s emerging effort to build a decentralised grain storage network through cooperatives deserves much greater attention.
The issue is not merely about constructing more warehouses.
It is about changing where agricultural infrastructure exists, who controls it and how closely it is connected to the farmer.
For decades, India’s foodgrain storage architecture has relied heavily on large, centralised facilities operated by the Food Corporation of India and state agencies. These institutions remain indispensable to the country’s food security system. But a vast agricultural country cannot depend only on storage facilities located far from where crops are produced.
Grain should not have to travel long distances simply to find a place where it can safely wait for the right market.
That is the logic behind decentralisation.
For a farmer, harvest is not necessarily the end of the agricultural cycle. It is often the moment when a new economic pressure begins.
A farmer who has harvested wheat, rice, maize, pulses, oilseeds or another crop must quickly decide what to do with the produce. If adequate storage is unavailable, selling immediately may become the only practical option.
And immediate sale does not always mean a good sale. When large quantities of produce arrive in markets simultaneously, prices can weaken. A farmer without storage has little bargaining power because the crop must be sold before it deteriorates.
This is where storage becomes more than an infrastructure issue.
Storage is an economic instrument.
A warehouse gives a farmer time. Time to wait for a better price. Time to negotiate. Time to avoid selling immediately after harvest. Time to access credit against stored produce. Time to decide whether to sell locally or enter a larger market.
Without storage, the farmer often sells according to necessity. With storage, the farmer has at least some possibility of selling according to strategy.
That difference can have a direct impact on farm income.
India has developed substantial centralised storage capacity, but the country’s agricultural geography demands a more distributed approach.
Production is spread across thousands of villages, districts and agro-climatic regions. Moving grain from a farm to a distant warehouse, and later transporting it back towards consumption centres or fair price shops, adds costs at every stage.
Fuel, handling, loading, unloading and transportation all have economic and environmental consequences.
A decentralised storage facility located closer to the production centre can shorten this chain.
That is the basic promise of the Decentralised Grain Storage Plan in the Cooperative Sector, launched as a pilot on May 31, 2023.
The initiative is particularly significant because it places Primary Agricultural Credit Societies, or PACS, at the centre of the model.
PACS already occupy a unique position in rural India. They operate close to farmers and have traditionally been associated with short-term agricultural credit. The new model seeks to broaden their role so that they become much more than lending institutions.
The PACS of the future can potentially become a village-level agricultural service centre where farmers can access storage, machinery, processing, procurement and other services under one roof.
That is a much larger idea than building a godown.
Why PACS Matter
The success of any rural infrastructure programme depends partly on whether farmers can actually access it.
A sophisticated warehouse located far away may be technically efficient, but it may not be economically convenient for a small farmer.
PACS, by contrast, already have a local institutional presence.
If properly strengthened, they can bring infrastructure closer to the farmer.
Under the decentralised storage model, PACS can establish grain storage facilities along with procurement centres, primary processing units, Fair Price Shops and Custom Hiring Centres.
Instead of arranging immediate transportation to a distant warehouse, the produce could be taken to a nearby cooperative facility. It could be cleaned, sorted and dried. It could then be stored securely. If the farmer needs liquidity, the stored produce could potentially support access to credit. Machinery required for the next agricultural operation could be hired from the same cooperative.
The farmer would therefore be interacting with an agricultural ecosystem rather than a collection of disconnected services.
That is precisely the kind of rural infrastructure India needs.
The importance of decentralised storage extends beyond individual farmers.
India operates one of the world’s largest food security programmes under the National Food Security Act, 2013, covering around 80 crore people.
Ensuring that food reaches such a large population requires a reliable supply chain.
Food security does not begin at the ration shop.
It begins much earlier—with production, procurement, storage and transportation.
When grain is stored closer to production centres, it can reduce unnecessary movement and potentially reduce losses associated with repeated handling and transportation. Local storage can also strengthen the ability of procurement and distribution systems to respond to regional requirements.
This does not mean centralised storage will become unnecessary.
Large storage infrastructure is essential for national reserves and large-scale food management. Decentralised storage can complement it by bringing capacity closer to farms and local markets.
The future of Indian food security should therefore be seen as a network rather than a single warehouse system.
One of the most interesting features of the decentralised storage initiative is that it does not attempt to create an entirely new financial architecture.
Instead, it seeks to bring together existing government schemes.
India’s expanding agricultural production and food security efforts have increased the importance of decentralised grain storage infrastructure across the country. The Decentralised Grain Storage Plan in Cooperative Sector, launched in 2023, is designed to improve storage, processing, procurement, and distribution systems through Primary Agricultural Credit Societies (PACS). The Plan adopts an integrated, cooperative-led approach by converging existing government schemes. It is supported through institutional coordination and financial support mechanisms. Beginning with pilot projects across 11 states/PACS with 9,750 MT of storage capacity, the initiative has expanded steadily. As of July 2026, godown construction had been completed in 313 PACS across the country, creating more than 1.80 LMT of storage capacity. The framework also emphasises quality standards, transparency and operational viability.
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