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Project report on construction of 20,000 MT godown grants under Rashtriya

Krishi Vikas Yojana (RKVY)

1. INTRODUCTION:

A.P.State Warehousing Corporation was established under Warehousing

Corporation Act, 1962, with the main objective of providing storage capacity in the
State for Agriculture produce. The Corporation has so far constructed 6,64,580 Mts.,
capacity godowns in the State. The storage space is mainly utilized for the purpose of
storage of rice, fertilizers, seeds etc. Besides it has hired private godowns to an extent
of 18,96,576 MTS capacity mainly meant for farmers. This infrastructure support to
farmers in the State is enabling them to get Scientific storage decides farmers are able
to raise loans on our ware house receipts from banks for their urgent requirement s
and thus helping them to get remunerative prices for the agriculture produce. Thus
the Corporation is playing an important role in the post harvest sectors of agriculture.

To encourage the farmers to avail our facility, we are extending discount of

35% on our normal rates of storage and warehousing charges.

APSWC Corporation is a well run and profit making organisation paying

dividends to the principal shareholders A.P. State government and C.W.C @20% for
the last 8 years. During the year 2011-12, Corporation has paid 100% dividend for its
shareholders. Corporation has well experienced staff in supervision and quality
control.

Though the corporation has been adding storage capacity depending on the
funds position and land availability, the expansion has not kept pace with the actual
ground level requirement. There are still pockets where pucca storage facility is not
available. FCI also has been seeking state governments assistance in increasing the
storage capacity for their requirements. Further Civil supplies Corporation requested
to construct godowns at Mandal Level Stock (MLS) points to supply to the ration
shops, there by reaching the produce to the common man though fair price shops.
Taking these requirements into account Government of Andhra Pradesh has mandated
us to create additional storage space of 85000 Mts., capacity in 9 identified locations
covering 02 districts in the State during 2012-2013. It is proposed to construct
godowns at these placed duly adopting latest technologies like provision of
Galvalume Roofing System with Central Warehousing Corporation specifications.
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But Commissioner of Agriculture has scaled down the project cost and requested
to revise project cost to Rs.10.00 crores.

Corporation would like to avail funds through Rashtriya Krishi Vikas Yojana
(RKVY) under National Agriculture Development Programme (NADP), a
Government of India programme.

During 2010-11, Corporation has proposed for construction of 20,000 MT

godowns at Amadalavalasa, Srikakulam Dist with an estimated amount of Rs.8.00
crores. Corporation received Rs.2.00 crores under RKVY scheme as proportionate
share vide letter No.N.F.RKVY (1) 17/2010, Dt.01.11.2010 from Commissioner of
Agriculture, A.P, Hyderabad and Rs.40.00 crores sanctioned vide letters Nos
Lr.No.B1/905/2010, Dt.25.08.2011 (Rs.3.92 crores) & Lr.No.RKVY (1)/1/2011,
Dt.18.10.2011 (Rs.36.08 crores) for 2011-12. Now proposal being made for
construction of 20000 MT capacity godowns in 2 locations covering 1 district under
RKVY Scheme as per letter No.RKVY/4/2013, Dt.23.05.2013 from the
Commissioner & Director of Agriculture, Hyderabad. Hence this proposal.

2. OBJECTIVES OF SCHEME:

a) To provide scientific storage facility and to make available storage space to

the farming community so as to enable farmers to get better returns.
b) To reduce storage losses thereby saving grains etc.,
c) To enable farmers to obtain bank finances through pledge of Warehouse
Receipts and to avoid distress sale of agricultural produce.
d) To provide ware houses at places where the facility is not available.

3. RKVY FUNDS

RKVY is state plan scheme, Food storage & Warehousing is one of the
allied sector as indicated by the planning commission. As such, A.P. State
Warehousing Corporation has come up with a proposal for construction of godowns
District wise throughout Andhra Pradesh which is 100% grant by the Central
Government. Initially, APSWC has proposed 2,53,500 MT capacity godowns
including ancillary works in 11 Districts with an estimated cost of estimates
Rs.101.404 Crores. Department of Agriculture, Government of Andhra Pradesh has
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sanctioned Rs.2.00 Crores from stream II of RKVY during 2010-11 towards

construction of godowns for procurement of rice vide Lr. No. N.F. RKVY (1)
17/2010 Dt.01.11.2010. Further, Rs.40.00 Crores sanctioned vide letters Nos
Lr.No.B1/905/2010, Dt.25.08.2011 (Rs.3.92 Crores) & Lr.No.RKVY (1)/1/2011,
Dt.18.10.2011 (Rs.36.08 Crores). Further planning to construct godowns during the
year 2013-14 and being placed for State level sanction committee meeting for
consideration. Vide Lr.No.RKVY/4/2013, Dt.23.05.2013 from the Principal
Secretary (Agriculture) has scaled down the Project cost to Rs.10.00 crores
under RKVY norms for the year 2013-14. As such, revised proposal for
construction of 20,000 MT capacity godowns in 2 locations in Nellore Dist are
proposed.

4. Warehousing and Benefits to farmers.

a) Warehousing Corporations work on the principle that a Grain saved is a
Grain Produced. It is estimated that around 10% food grains are lost every
year due to non availability of Scientific storage facilities and most of the
farmers leave their harvested crop on open platforms. This loss is more
severe in case of cyclone prone Districts as evidenced in the recent cyclones
in Andhra Pradesh. The Food gain production in AP is around 140 Lakhs
MTs and taking into consideration 10% average loss due to non scientific
storage facilities, the loss of grain will be around 14 Lakhs MTs. The
average storage loss in case rice stocks are deposited in scientific godowns
will be around 0.5% upto six months and 0.75% upto one year. Thus it is
evident that due to scientific storage around 9% loss of grain can be saved.

b) FCI is unable to take up procurement of Rice /Paddy on time due to non

availability of storage space and the farmers are denied of minimum support
price which in turn affects his financial strength for taking up next crop.
Hence there is need to create more storage space. In fact it is estimated that
in Andhra Pradesh 25 to 40 lakhs MTs godown space is additionally
required immediately.
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c) Another main problem for a farmer is non availability of credit for his urgent
requirements during off season. This problem can be overcome in case the
farmer is in a position to obtain Negotiable Warehousing Receipt and on the
pledge of this receipt, he will be in a position to avail loan upto 75% value
of the produce kept in the godown with out any hindrance and delay.

d) In Warehouses run by APSWC, 35% of the rental subsidy is made available

to small and marginal farmers and this in turn will motivate them to deposit
the Agricultural produce in Warehouses. Thus this will promote the
economic strength of small and marginal farmers.

e) Realizing the importance of Warehousing infrastructure, the Government of

India has recognized Warehousing as an important and critical input for
promoting Agriculture economy in the country.

5. ADDITIONAL CAPACITY PROPOSED:

Corporation has already constructed 6,64,580 MT capacity godowns in

APSWC sites. Further balance capacity 2,30,000 MT is in pipe line. Now corporation
has proposed additional 20,000 MT capacity godowns in Andhra Pradesh in SWC
own lands. The additional storage requirement is identified based on the Agricultural
production, increase in area of Ayacut, as storage space available besides taking into
consideration Food Corporation of India requirement and MLS points of Civil
Supplies Corporation.

The details of capacity addition (District wise) proposed are furnished here under.

District wise
Capacity in total capacity
Sl.No District and location MT in MT
1 SPSR Nellore Dist
Bogolu 15000
Atmakur 5000
Total 20000 20000
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6. LAND AVAILABILITY:

Corporation has proposed 20000 MT capacity godowns in own sites. 12.66

acres extent of land is available with the Corporation for construction of godowns at
the above specified places.

7. CONSTRUCTION OF BUILDINGS :

Construction of Godowns will be entrusted to experienced civil contractors

inviting tenders. Corporation has well established engineering department to supervise
the construction as per specification. Assistance also will be taken from Police
housing corporation to supervise the construction of Godowns at a few centers. It is
proposed to complete the construction of Godowns by May 2014 and keep them ready
for next year Kharif harvest season. Specialty of the construction of these Godowns is
use of modern technology roofing with galvalume sheet

8. COST OF THE PROJECT:

Detailed cost estimates along with plan for 5000MTS capacity Godowns is
worked out and the same is given in Annexure I. According to this, cost per MT
capacity is Rs 6000/- pet MT including ancillary works. From our experience, we find
the cost of construction per MT is same at all places, except for little variations on
account of foundation work. Hence we have adopted uniformly cost at Rs.6000/- per
MT capacity and arrived at the total cost of construction of 2 Godowns. District wise
details of 2 Godowns and the estimated cost are as follows:
Sl.No District Capacity Rate/Tonne Total cost of the
proposed in MT in Rs. project in Rs.
1 SPSR Nellore 20000 6,000.00
120000000.00
Total 20000 12,00,00,000.00

Cost of the project does not include cost of the land.

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9. MEANS OF FINANCE:
(in Crores)
a. Subsidy under Rashtriya Krishi Vikas Yojana (RKVY) 10.00
Scheme

b. Corporation own funds 2.00

Total cost of the project 12.00

10. VIABILITY OF THE PROJECT:

We expect the occupancy in the range of 85 % to 95 %.

Though the Godowns are primarily meant for the farmers yet we would like to
use storage space available for letting out to FCI/Civil supplies initially, till
sufficient demand from the farmers pick up.

11. TIME LINES FOR CONSTRUCTION:

We propose to complete the construction of all the 2 Godowns by May 2014. So that
the new capacity will be available for utilization by 2014 Kharif harvest. A chart
indicating the proposed construction is given in enclosed Annexure III.
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ANNEXURE-I

COST ESTIMATE

CONSTRUCTION OF 15,000 MT GODOWN INCLUDING ANCILLARY

WORKS AT BOGOLU, SPSR NELLORE DISTRICT.

Sl.No Description Amount in lakhs

1 Construction of 15,000 MT godown 750.00
2 Formation of roads 55.00
3 Office building 25.00
4 Weigh bridge Foundation 6.00
5 Weigh bridge Cabin room 4.00
6 Guard room 4.00
7 Compound wall 40.00
8 Cost of Weigh bridge Machinery 7.00
9 Parking Shed 4.00
10 Slab Culvert 3.00
11 Bore Well 2.00
Total cost including Ancillary works 900.00

Rate per 1 MT = Rs.9,00,00,000.00/ 15,000 MT = Rs.6,000.00/ MT