Decentralised grain storage plan through PACS: backgrounder
A PIB backgrounder of 3 September 2026 explains the Decentralised Grain Storage Plan in Cooperative Sector, rolled out as a pilot on 31 May 2023. It builds godowns and other facilities at Primary Agricultural Credit Societies by joining existing schemes. By July 2026, 1012 PACS had been identified and godowns completed in 313, creating more than 1.80 LMT of storage.
- Pilot launch
- 31 May 2023
- Pilot
- 11 PACS in 11 States, 9,750 MT
- Progress (July 2026)
- 313 PACS done, more than 1.80 LMT; 1012 PACS identified
- Implementing agency
- National Cooperative Development Corporation (NCDC)
- Effective loan rate
- 1% for PACS
- Foodgrain output 2025-26
- 376.563 million tonnes (Third Advance Estimates)
The decentralised grain storage plan through PACS: what happened?
Big storage run by FCI and State agencies remains important, but it is often far from where grain is grown. The Ministry of Cooperation wants storage closer to production centres. Godowns at the village cooperative cut transport costs and waste, and give farmers a way to avoid distress sales.
- The plan converges AIF, AMI, SMAM and PMFME schemes at the PACS level.
- PACS can run godowns, Custom Hiring Centres, Fair Price Shops, primary processing units and procurement centres.
- Silos of 50 MT, 100 MT and 200 MT are provided for.
- FCI can give assured hiring of eligible godowns.
- Foodgrain output in 2025-26 is about 18.8 million tonnes (5.3 per cent) above the previous year’s 357.732 million tonnes.
Which schemes are joined together?
| Scheme | Support |
|---|---|
| Agriculture Infrastructure Fund (AIF) | financing and interest subvention for post-harvest infrastructure |
| Agricultural Marketing Infrastructure (AMI) | back-ended capital subsidy for storage |
| Sub Mission on Agricultural Mechanization (SMAM) | Custom Hiring Centres and farm machinery |
| PM Formalisation of Micro Food Processing Enterprises (PMFME) | growth of micro food processing units |
PIB Backgrounder, 3 Sep 2026.
How is it run?
- NCDC is the implementing agency.
- An Inter-Ministerial Committee monitors the plan; a National Level Coordination Committee coordinates operations.
- State and District Cooperative Development Committees support implementation; DCDCs select PACS.
- PACS should preferably own land that is not waterlogged or in forest; leased land needs a lease longer than 20 years.
Which constitutional entry is relevant?
- Seventh Schedule, List II, Entry 32: Incorporation, regulation and winding up of corporations, other than those specified in List I, and universities; unincorporated trading, literary, scientific, religious and other societies and associations; co-operative societies.
How was the plan made viable?
| Measure | Change |
|---|---|
| AMI subsidy | raised from 25% to 33.33% |
| Margin money | cut from 20% to 10% |
| AIF interest subvention | 3% |
| NABARD special refinance | with AIF, cuts effective loan rate to 1% |
| Lenders | State Cooperative Banks and District Central Cooperative Banks |
| FCI | assured hiring of eligible godowns |
How does a PACS get a godown?
- DCDC identifies and approves the PACS in an area with storage demand
- PACS arranges suitable land with members’ consent
- Loan from cooperative bank; AMI subsidy via NABARD; AIF subvention
- Godown built to WDRA norms with approved branding
- PACS earns rent and lends against stored grain
Why does the decentralised grain storage plan through PACS matter?
| Angle | What to note |
|---|---|
| Farmers | Storage near the farm helps avoid distress sales. |
| Food security | NFSA covers about 80 crore people and needs a strong storage network. |
| PACS | Village credit societies become rural service hubs. |
| Case study | Nerpingalai PACS, Amravati: 3,000 MT warehouse; about 300 farmers store 32,000 bags of soybean; Rs 4.50 crore advanced against produce. |
| Quality | Warehouses must meet WDRA norms with ventilation and audits. |
What are the challenges in the decentralised grain storage plan through PACS?
- Only 313 of 1012 identified PACS had finished godowns by July 2026.
- Many PACS lack suitable land of their own.
- Viability depends on steady use and FCI hiring.
What should be done next on the decentralised grain storage plan through PACS?
- Complete godowns in identified PACS.
- Add processing and Custom Hiring Centres to make PACS multi-service hubs.
- Keep quality audits and transparency through Project Management Consultants.
What can Prelims ask on the decentralised grain storage plan through PACS?
- Decentralised Grain Storage Plan in Cooperative Sector: pilot 31 May 2023; NCDC implements.
- Convergence: AIF, AMI, SMAM, PMFME.
- AMI subsidy 33.33%; effective loan rate 1%.
- Pilot: 11 PACS in 11 States, 9,750 MT.
How to write about the decentralised grain storage plan through PACS in Mains
Practice question (15 marks, 250 words): Decentralised storage through cooperatives can reduce post-harvest losses and distress sales. Examine with reference to the PACS grain storage plan.
- Intro: plan of 31 May 2023; PACS-led.
- Design: convergence, NCDC, finance at 1%.
- Progress: 313 PACS, 1.80 LMT; Nerpingalai example.
- Issues: land, pace, viability.
- Conclusion: PACS as rural service hubs.
What should UPPCS aspirants note?
- Uttar Pradesh was one of the 11 States in the pilot phase of the PACS grain storage plan.
How to use this in Mains
- As per PIB (2026-09-03): PIB backgrounder on the Decentralised Grain Storage Plan in the cooperative sector (launched 2023), building storage at PACS level.
- Reduces post-harvest losses and distress sales.
Quotable data pointPIB backgrounder on the Decentralised Grain Storage Plan in the cooperative sector (launched 2023), building storage at PACS level.
PIB: PIB Backgrounder: Decentralised grain storage, 3 Sep 2026
Exam angle
Prelims: PACS role.
Practice MCQs
Original practice questions (not PYQs).
The implementing agency of the Decentralised Grain Storage Plan in Cooperative Sector is
Answer (c) & explanation
PIB Backgrounder, 3 Sep 2026.
Under the plan, the AMI subsidy was raised to
Answer (b) & explanation
PIB Backgrounder, 3 Sep 2026.
"Co-operative societies" appear in which list of the Seventh Schedule?
Answer (b) & explanation
Constitution: List II, Entry 32.
Questions students ask about this
What is the Decentralised Grain Storage Plan in Cooperative Sector?
A plan rolled out on 31 May 2023 to build godowns and related facilities at PACS by converging existing schemes.
Who implements the plan?
The National Cooperative Development Corporation (NCDC).
How much storage has been created?
More than 1.80 lakh metric tonnes in 313 PACS as of July 2026.
What is the effective interest rate for PACS?
About 1 per cent, after NABARD refinance and the 3 per cent AIF interest subvention.
Keep studying
Go deeper
Official source: PIB: PIB Backgrounder: Decentralised grain storage, 3 Sep 2026
facts from cited sources only; faculty review pending