By T.G. Biju

New Delhi, Sep 23 (IANS) Stung by the Supreme Court's rap on rotting grain in the warehouses of state-run agencies, with some estimates pegging the losses at Rs.58,000 crore (nearly $13 billion), the government has decided to increase the storage capacity by 17 million tonnes over the next five years.

"We have started putting in place an additional storage capacity of one million tonnes of foodgrain this fiscal. Over the next five years, we will create additional storage facilities of 17 million tonnes," Minister of State for Agriculture K.V. Thomas said.

"At the same time I would like to add that rotten foodgrain amounted to 70,000 tonnes in the previous season against the total procurement of 93 million tonnes. But certainly, even that should not happen," Thomas told IANS in an interview.

"We have to raise the country's agricultural production manifold to satisfy the needs of the beneficieries when the Food Security Act is enacted. For that, we must have in place a state-of-the-art storage system - and we will have that."

Thomas said a team of technical experts from China, a country he had visited a few months ago to study its grain and food storage systems, will also be invited next month to interact with Indian officials on how to improve India's warehousing facilities.

Currently, the state-run Food Corporation of India (FCI) and the Central Warehousing Corp (CWC) have a capacity to store 87 million tonnes of grain. The CWC has 487 warehouses with a capacity of 10.6 million, while the FCI, with 1,500 godowns, accounts for the rest.

Warehousing at CWC facilities are not just for grain but for a host of other items like industrial goods, custom-bonded merchandise and products for dispatch by air, rail and sea. A CWC official said a fresh capacity of 177,300 tonnes will be added this year.

"The problem is only in some places where the grain is stored in open areas. That's why we have asked the private sector to build the godowns. In fact we have assured them 10-year contracts to hire the godowns," said a top official in the FCI.

In a recent meeting with top officials on the prospects for the coming season, Agriculture Minister Sharad Pawar had estimated the country's grain production at 218 million tonnes during July 2010-June 2011 and asked all agencies to be better prepared for procurement.

"There is the need for reduction of wastage in storage and improving efficiency of the food supply chain. Incentives in this regard have been made more attractive to attract more private investment. These need to be followed up vigorously," the minister said.

The thrust was to minimise storage losses especially when millions of people go hungry in India -- a hot political and legal issue that led to a strong statement by the apex court which wanted grain to be distributed free, rather than letting it rot.

The principal opposition Bharatiya Janata Party (BJP) had said foodgrain worth over Rs.58,000 crore were being left to rot every year by state-run agencies. Party president Nitin Gadkari had called it "a tale of criminal wastage."