Mumbai : Availability of adequate and concessional financial support is very critical to the development of storage and agricultural marketing sector besides granting agri-industry status to the warehousing industry, demands Mr. Aditya Bafna, Executive Director of leading agri-logistics firm Shree Shubham Logistics Limited.

Outlining his expectations from the forthcoming union budget, Bafna by providing “Agri-Industry” status to warehousing industry will facilitate respective State governments to provide concession in water, electricity, stamp duty, and any other municipal charges or rents.

Talking about the agro-logistics industry, the SSLL Executive Director said “typically, storage infrastructure projects involve substantial expenditure on acquisition of land and have a long gestation period, thus companies which create such storage projects, need long-term funds for capital expenditure”.

The Government can do the following to help the agri-logistics sector:

1. Banks/financial institutions should design customised products to meet the specific requirements of this sector

2. Loans provided for setting up warehousing infrastructure, especially for large capacities, must be classified as “Direct Agricultural Loans” and be made available below the Base Rate declared by the banks. For such loans Rate of Interest may be fixed at 5% p.a.

3. Government through NABARD may also consider providing an interest incentive, which will bring down the cost of funds by at least 4-5% p.a. Thus, we would be able to provide the storage space at concessional rates to the farmers

4. Term lending institutions, like NABARD (which has been provided with low cost dedicated funds for supporting this sector), should be allowed to lend directly, so that funds are available at reasonable rates of interest

5. No warehouse in the country should be provided any subsidy unless it is licensed/accredited by WDRA

6. Vigourous campaign be launched to increase the number of accredited warehouses, which can issue NWR, so that more and more number of farmers can avail concessional finance for marketing of produce. (Loans are available at commercial rates of interest. GoI has introduced a scheme to provide loans to small and marginal farmers against NWR @ 7% pa.)

7. Capital subsidy for private companies under the “Agriculture Marketing Infrastructure, Grading and Standardization” (AMIGS) must be revised upwards to 30% of the total project cost (land + construction) and the ceiling of Rs. 50 lakh be revised to Rs. 3 crore, so that large facilities can be developed under the “Hub and Spoke Model”

8. Under the “Gramin Bhandaran Yojana” (Rural Godown Scheme) the normative cost of construction of warehouses of more than 1000 Metric Tonne (MT) may be  increased to Rs.4500/- per Metric Tonne (MT) and accordingly cap for private companies may be increased from 15% to 30% subsidy of the total project cost (land + construction). The ceiling on subsidy component may be increased to Rs. 4 crores from Rs.1.35 crores.  This will help private companies to build large capacities with modern infrastructure in the Rural area