SIG-SCALE S T O R I N G Oi;' fiGRICTJZTGBiiL PRODUCE
..'--$k$+---
\isrehouse R e c e i p t s .to S e r v e as S a c u r i t y
For C r e d i t
--y&---
FIpJCTIC.I\SS OF N$;TICiifL\L CO-GPERA1'.I'VZ
BOARD EXPLAI-JEJJ
-
-
,,
- 2 L 2 5' S-
j(SD DEVELOPi%IJ?;
-
j- .C.s.,
Joint Sccrcterg,
$'i'ini s t r y cf i;gIaicu.ltare
S.7 S h r i K r i s h m C h a d ,
--------------...---
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-
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An i ~ p o r t n n trc:commi=ndation o f t h e Rurnl C r e d i t
Survey C c m i t t e e (1951-54.) r e l a t e s t o development o f
wspehouslnp, :s ,q m s m s of extend in^, c r e d i t f a c i l i t i e s .
T h i s a r ; t l c l a i n d i c c . c s s t;he r o l e t ~ a r e h o u s i n gw i l l p l a y
i n I n d i a ' s a ~ r i c u l t u r , ~p,rlo g r e s s and the d i r e c t b e n e f i t s
t h e farmer ? t i l l d e r i v e from i t , It ::lso shows how t h e
National C o - o p ~ r a t i v a Development and '.'iarehou,sing Board
to
i n a ~ z ~ y . 3 t eodn Jc.c~c-,:";iS;r '7 hg th.e Erime M i n i s t e r ,
proposes t o e s t a b l i s h a n<+tworkof warehouses i n t h e
c o u n t r y 2nd proxo t o a ~ . r i c w l t u r . a lprcg13$ss,
~lt
4;
dt.
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+;.
Sb
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+$
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-- 3
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iniarehousfng, a mu.ck~ n ~ f s u n d e r s t o o dterm i n I n d i a , i s o f t e n
confused w i t h s i ~ p l es t o r i n g o p e r a t i o n s . It i s s t o r i n g , no doubt,
but a s
8
r e g u l a r i n d u s t r y 2.nd an i m p o r t a n t adju.net o f marketing.
i=s msuket3.n~becomes more and more o r d e r l y , s t o r i n g would
need t o become more and more s p e c i a l i s e d , and would r e q u i r e s p e c i a l
a ~ e n s i e sworking on a cornmerci~d. ~
Q Y ~ S I .n
s h o r t , warehousing i s
s p e c i e l i s e d s t o r i n g f o r eoruflerclal g a i n by s p e c i a l i s e d a g e n c i e s ,
Need f o r ! J a r e h o u s i n ~
The f x p o r t s n c e c f warehousing h a s been s t r e s s e d by a number
of c o m r i t t e e s , As f2r back as 1928, t h e Royal Commission on
A g r i c u l t u r e i n I n d i a r e f e r r e d t o t h e u r g e n t need t o p r o v i d e
warehouses .and s a i d :
"The f u t w e m2g see Ln t ~ p 6 r a t f o ni n I n d i a , t h c type of
l i c e n s e d warehousss c ~ n d u c t e df o r p r o f i t w i t h i n t h e market
premises somewhat on t h e l i n e s o f t h e sysiem which e x i s t s i n
the United S t a t e s of m e r i c a * The n ~ i t u r eo f agency p r o v i d i n g such
f a c i l f t i e s i s noc o f f i r s t irnportsnce. The u r ~ e r tneed i s of
q c c o ~ a o d a t f o na t t h e d i s p o s a l o f t h e c u l t i v a t o r a t moderate c o s t , I t
.., The
.
-,-
:kc C e n t r r i l Ead(in~; S n q v i r ~C o r n i t t e e i n 1932 l . f d even
g r e a t e r stxlc-:ss. on ~:?,,z.ehousirsg,ar13 r c r n z ~ k e d"that co_rsiderable
irp?-ovmer;t or" t h o c r s ? L t s i t u s t i c n 7,nd the money ms. ~ k e ti n
I n d i a can only, uancer; p r e s e n t c o n t i t i o n s , be
improvfng nnd extending a s soon ? s p o s s i b l e che s t o r a g e 8nd
warehousin~,of goods i n o r d e r Lo e:LLar.ce
the b m i s o f c r e d i t
Simil3r
recommendations wore
madc by
tbc . -... L,gr l c c l t 3 ~ 2 1 Finence
Sub-CcmKf tt aa o f
P o l i c y Cormittee on 1'~riculturt; ? o r e s try and F i s h e r i e s
the
(Gbdgfl Committeu) In 1944, a d b y its Co-cper-tlvs Flanning
--
C o r n i t t e e i n 1S L ; ~ , .he M a ~ k e t i n gSub-Cog:xittee
of that P o l i c y
Cornmittes a l s o s t r ~ s s e dt h e ixport-sncs o f xarehouses,
I n 1949 t h e
Z L j~e c t
was t h o r ~ u g ~ kl t; u~d i e d b y t h e R w a l
B W f n g E n q u i r y u o ~ r ~ ~ i t whfch
tce
rccoznenCc~d t h e s e t t i n , cp of
fi
a tJarehov.sing Development h a r d , f i n a n c e d j o i n t l y b y t h e S e n t r a l
Governxtelit, the Easerve Bank . m d t h e P r o v i n c i a l Governmenks,
1, t h e .?irst Five-Year- ? l a , t h e F l a m i n g S o r r , ~ i s s i o nn l s o
s t r o n g l y recommsnd8d t o the S t z t e G u v ~ r m e n t sa n d t h e Reserve
h
~ a n kt o kake a l l n e c e s s a r y mT>c:suresf o r development of warehousing,
S t a t e ictiv:.tg
in ii?arebousin~,
The Reserve Bmk of I n d i a
-- one o:
hihose m a i ~responsi-
b i i i k i e s is t o provide adequate c r e d i t f o r -;grlcu.ltu.rd
o p e r a t i o n s a t r e w o n a b l e r s t e s of i n t e r e s t
-- has
a l s o been
d e v o t i n g :I g r e a t d k s l of a t t e n t i o n t o ske s u F j 3 c t e
In 1944, the aank addressed t o a l l r r o v i n c i j l
Gove~nments
2
let
b r i n g i n g o u t t h e i .yo-tance of w a ~ e h o u s e
r e c e i p t s wflich c o u l d s e r v e a s c o l l n t o r c l T c r providing,
: r e d i t t o a g i c 7 d t w i s t s who d e p o s i t t h e i r produce i n
"or
i ' e c i l i i a t i n g a c t i o n in t h e Provinces ~ h i yappended a m o d e l m 1
t o t h e c i r c u l a r which c9ul.d s e r v e as a .b+s.is ,f.or p r o v i : i c i ~ l
1egislat i r m ~
Agai,r,-.sL.1 3ec,enbe.r-1948, ' h e , B e ~ e ~ ~ % ~ 3 2 & . . - c i r c l i l arznot;her
tedi
model- B i l l , - redrafted. on .t,lic bmis o f s u g g e s t i o n s r e c e i v e d from
s o n s . of t h e S t ~ t eGovcmmants and, s l o n g w i t h t h e B i l l , appended
t '
'
.
a s e t of !no.'el r u l t i s f o r t h i s purpose,
But f o r
new a c t i v i t y .such
a s t h i s , p u b l i c s u p p o ~ twas n o t f o r t h c o m i n g i n a d e q u a t e meEsure.
T h i s cxperienct: f o r t i f i e d t h e g e n e r ~ lc o n c l u s i o n of $]le R u r d Gr3di.t
b r v e y C o n r x t t e c t h a t , t o ; % h i l b i l i t a t e t h e a g r i c - u l t u r i s t , an ~11o u t d r i v e , b a s e d on i n t o g r z t o d development 3f c r e d i t , m n r k a t i n g ,
p r o c e s s i n g and warehousing ,wi4iil j t n t a p a r t i c i p j t i o n , was e s s e n t i a l .
A c c o r d i n g l y , i t rocco: (:11dod t h a t warehousing s h o u l d be u n d e r t a k e n by
I
the S t a t e i t s e l f ,
~ h e d eracomhiendntions usr;. a c c a p t e d by tila Gcv<.rnnefit, and
t h e A g r i c u l t u r a l Produce ( 3 ~ v e l o p 1 n c n tand Wnrohousin~()C o r p o r c t i o n s
f o r t h e c o n s t i t u t i o n o f n M z i i : i a l C c - o p e r c t i v c Development and
W z r e h o u s i n ~Basrd md C e n t r z l and S t a t e Warehousing C o r p o r z t i o n s .
I
.
.
.
T h i s ~ ; o & r dWES s a t u p on S e p t e n b c r 1 t h i s y e n r l ~ n d e rt h e
c h a i r m a n s h i $ of S h r i A j i t 2ruc-d Z n i n , H i n i s t e r f o r Food and i i g r i c u l t u r
I t c o n s i s t s of r e p r r : s o n t a t i v c s of t h e C c n t r c l Governgent, tl1e Reserve
Enrik 2nd t h e S t a t e Duzk o f I n d i a , t h e . Chail:ilan,
Forward Markets
C o m i s s i o n , 3 r d r~i;r,:; rim-offi-ci-1 !sernbi2rs,
The f u n c t i o n ~f t h c 3 d a r d gcnt2rally i s t o p l a n 2nd 2 s o n o t ~
program!les f o r tile produc t i m , prsc.ssing,
+
mnrkating, s t o r a g e ,
1
!
warehousing, e x 2 o r t %nG i:nport u f n g r i c h i t u r & p r o d u c e t h r o u g h a
co-operative socit2ty o r
wsrohc~uslngc o r p o r 3 t i o n .
E:
Onc of i t s
s p e c i f i c f u n c t i o n s i s t c ) d e v e l o p w c r e h o u s i n g by s u b s c r i b i n g t o t h e
sliare c a p i t a l of t h o C e x t r d 'vlzrehousini; ~ o r p b r a t i o no r t o advance
lomils
or.grantsub;idies
. ..
t
t c that C o r p o r a t i o n o r , a F j Statc..Wnr&ousing,..,
.
Corporation6 ,
!
'
. .. .
-
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'4 i
Wsrehousing
-The
Corporction
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w?,ri,c",.j Fc
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~e
I r s 2rTrrr;r. will bt.
d
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n '$he C;.,ntrpJ W~rc~ho~sir,~
~ , ' r _ ; 'k-;,!?r ~ :;.I:!
I;~C S ~ C ? Q
Go orstions in-,each
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of t h e 13 S t ~ t a stilct c2ne . i n t o b e k g on iclvenber
q,039 t . j n s
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t;l:s.
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*Lt X
here w i l l k c no
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Z:.b.7,
Z
-'.
~ ~ ,;p,
2 -rative
.,
societies
w~rck~usr.3:f c ; r g i ) r ~ t i ~ ~ ~
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8t~r;lgi: & . : ~ 0 ~ x ~ ' ; r . ~ tf ,j ~nihii iivie!::
.L
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The
l i l l i a n tans.
w i t h , will b e I ' c ; o d ~ t u f I ^ s , ~ c c
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Z t l:e ~ A+.,,
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(,-inneci ns we11 as u n d i i z i ~ & )z z i
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rcx
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oils,
li,3re c o m n o d i t i e s w i l l be
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II
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s b ~ p c r I ~ nis~ ;c~ i u e d
staff
v ~ r e b ~ i i z ; ~323h
.
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3uty o f tbi. h r i ; n t i o n
c
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il;ifit
l l ?:~;v~, O C : C ~ J ~ S
;GC;L:L;~
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T.sSLS~L:-;~
~ ~ r ~ h 3 ~ 5 8 ~ i l l ,
~ s ~ i ; t ~ - n tI.t will be thr
,);x;illt;
thti c .>ror.,.,I,
ulT1
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eS 2 0 K l
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:c
03 v i l u 31 fr(;:;dcc. I r ... Ai-:;?~:.
to (::;LuK'c A~hL:ir
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wh;lis j ~ e n z s ~~ .u n n ; stl)r?g:;.
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r e s , ! ; ~ c i b l e far grnd-jfi; 32
:
.; liti.?j, r?.d will
L
]
i.1:
,,
).L.v~
b~
2 S
E
~
It i s ostimatod t h e t a p a r t from t h e accounten'cs,
~ G I ? ~ c E ~
end l a b o u r s t e f f s about S00 t e c h n i c a l p e r s o n n e l w i l l be
r e q u i r e d o Since p o r s o n s w i t h e x p e r i e n c e o f tho w o r k b g o f
i i c e n s s d v ~ c ~ e h o u s ssw'
s o n o t n v a i l a b l o , t h o p erson s appointed
w i l l be given i n t s n s i v e t r a i n i n g b e f o r e ' t n c y a r o p o s t e d t o
the
~ ~ T C ~ O U S O S .
L o g i s l . a t i n ~ 3anst o x t s t in oach S t ; r i ; o 'to l l c e n s o and r o g u l a t e
the w r k h g of' the
ware-buses,
L t prosent; sucli legislation
e x i s t s i n A n d h r z - T ~ l ~ n g a n sBombay,
~
B i l n l r ; Yadras, K ~ m c t a k a ,
K e r a l a and nriadhyr: Predcsh.
,
y e t , t o (,:n2ct bc:giz2.a t i o n ,
Thc romairiing S t ~ t e so f Fun j a b ,
They erpc oxpocted to . do
SO
shortly.
.. .
-
Y J l a r ~ h ~ u sf oi S ! i : U j . i t ~i &
'jE
~ c ~ . ~ j ---.
t?or
y
Cudi.t;
(I
T l ~ omost i n p o r t o n t aspect which tha Covornmt.n t h a s i n
.view i n undertaking . t h i s p r o T r a m e of s e t t i n g up a chain o f
wareh3uses a l l ovor t h c country i s thho c r a a t i o n o f w~.;.rt.housc.i
r ~ c e i p t swhich can servc! ? s n c o l l c t o r c l z q c u r i t y f o r tho
p r o v i s i o n of c r e d i t to t h a ~ g r i c u l c u r i s t s . For oach l o t
deposited i n a l i c e n s a d warahi:~so,
3
r e c e i p t tviS-1 bo i s s u e d
to tt?e d e p o s i t o r s h c r ~ v i ~ ; e i;ho
,
q u a n t i t y md t h o q u a l i t y o f tho
goods d ~ p c s s i t c i d ~ This r e c e i p t could be discounted w i t h $iy
b ~ n bto o b t a i n l o a n s o r t r a n s f e r n cd tcj m y o t h e r p orson,
s i n c e i t ~ti11bo a n e g o t i a b l e r c c o i p ~ ,
I L l c i d c n t a l l y , t h c a x i s t o n c c o f b a k i n g f ~ c i l i t i o si n t h o
r u r a l cress i s r: p r c - s o q u i e i t o fgs: thc, m~,:~..;ur.i; t o bc ~ . " f o c t i v o ,
Stops, t h o r e f o r o , 3rc being takon t o OpaG branches cf .the
S t a t e Bmk o f L d i a i n a x e s where none e x i s t s a t p r o s c n t ,
This f a c i l i t y should go a l o n g way i n i n i m i n a t i n g d i s t r e s s
s a l e s by t h o cu.?_tivotor a t thc! t i m 3f hervost..
Tho c r e d i t
a v a i l a b l a w i l l enabla I i i m to p u t h i s goods on t h e marko t a s a d
,when f o m d most p r o f i t ~ b i oan2 2 c t n ~ c s s s a r i l ya t t h o time of
harvestl w h e ~p r i c e s e r o
,4t
l3mv
on eccount o f heevy a r r i v a l s . .
t h e same time, t h e c o n s m u r rrUl b o ?ssurc-,d o f
c?
rcgcilar flow
o f goods t o the mark6 t on a more o r l e s s ~ v c npricc! a l l
through t h e year.
& j y a n t a s uf Warehousing
Tho c r e a t i c n o f tho warehouse r o c a i p t m d the conscqucm t
p r o v i s i o n o f credf t 3ro n o t thc 2 n l y z d v ~ n t a g o swhich can b e
c l a i n e d f o r warehousing.
The s t o r a g e ;f goods i n warenouses
corlstructed on s c i e n t i f i c l i n e s ~ l n dlookdd a f t e r by o x p o r t
l e r g e I . o s s c s t h m u g h i n s a c t s , p e s t s , ratis
...
etc; Even on a
cclnservstivo es$imete thoso l o s s c s a x n t t o ? b u t 3 milltor,,
tons e v e r y y e a r p
,4110 t h e r azvantage which w i l l accruo i n t h e m n t t c r o f
i n t h o s e tvarehouses.
Vforkable s t a n d a r d s f o r v a r i o l l s g r a d e s e r a
being evolved i n r e s p e c t o f
pJ1
t h e commodities which w i l l bo
accepted i n tho warehouse 2nd a l l l o t s coming i n t o t h o v ~ a r ~ b u s o
~ v i l lbe graded,
When these sra3t's becorn3 well recognisecl d l
o v e r t h e country, n o t o n l y w i l l h i s h c r r e t u r n s b e a s s u r e d b
t h o p r o d u c x but t r a d i n g i n t h o s e q u a n t i t i e s w i l l become
smsothsr,
I t v ~ i l lthen n o t b e nccGssary p h y s i c a l l y to check
t h o commodi-Lies n o r w i l l t r r d i n s by s m p l c s be necessary.. Mere
i n d i c a t i o n sf g r a d e s would e s s u r o t o tha p u r c h a s e r t h e q u a l i t y
f o r whtch ho pwsl
i . ~t h e t a s k o f
national r o c c n s t r u c t i o n warehousing i s but
o n e o f t i e marry a c t i v i t i e s i n hand.
But w i t h o u t a widespraad
progranme o f worohnusing, w r k c t i n g cafinot bo made n o r e o r d a r l y ,
huga w a s t e s cannot bc c l i ~ i n a t e 2znd, above a l l , adequate c r o d i t
s t chsap r a t a s w i t h an a s s u r d r o c o v e r y cannot be extmded ti,
the cultivator,
The N p t i c t n a l C=-operctive i)evelopment and
Wi,rshousing Bosrd which h ~ bs - a s ~ upt i s n o # t t o fulfil t h i s