Steel silo storage with the facility for bulk handling is a highly mechanised and modern way of storing foodgrains. Storing foodgrains in silos ensures better preservation of grains and enhances their shelf life. When foodgrains are stored in silos and transported in bulk, losses due to theft, pilferage and transportation are negligible as compared to storage in bags in conventional warehouses.
As of January 2020, a total of eight steel silos, under the Food Corporation of India (FCI), are operational in the country. In the past five years, a total capacity of 0.13 million metric tonnes (mmt) has been created by FCI in Punjab, at Kotkapura (0.03 mmt), Bamala (0.05 mmt) and Patiala (0.05 mmt).
Construction of modern silos on public-private partnership basis
The Ministry of Consumer Affairs, Food and Public Distribution has approved an action plan for the construction of 10 mmt of steel silo capacity for modernising storage infrastructure and improving the shelf life of stored foodgrains.
The development of steel silos has been proposed under three modes – viability gap funding (VGF) under NITI Aayog, VGF under the Department of Economic Affairs (DEA), and the non-VGF mode. As of January 2020, VGF support was required for only one location, at Kotkapura in Punjab, while in the case of VGF under the DEA, only two locations – Kaimur and Buxar – have been covered. In a number of locations, challenges such as land acquisition, requirement of a particular shape and size of a contiguous land parcel with a railway siding/ approach road of 1.5 km, have been faced by the government.
At present, only a few players are operating or are planning to operate silo storage facilities in the country. AdaniAgri Logistics Limited was among the first to adopt silo storage and is one of the leading silo storage operators in the country. Besides, companies such as LT Foods, National Collateral Management Limited, Shree Kartikeyan Industries, and Total Shipping and Logistics Corporation are also planning to foray into the silo storage industry.
Since silos are often set up near railway terminals, the cost of land acquisition acts as a hindrance to silo construction. To address the issue, the government is planning to roll out new guidelines for the construction of silos by doing away with the mandatory requirement of having railway connectivity next to the storehouses. The new model will also incorporate the “hub and spoke” system in which various fully automated silos will be connected by road to a mother silo that will have rail connectivity. The new model will also facilitate the construction of stand-alone silos. The government is fast-tracking the construction of 10 mmt capacity and is planning to achieve this by 2022-23. However, given the current progress, the target seems somewhat far-fetched.