Warehouses at the Tropic of Cancer

During my recent visit to Madhya Pradesh, I saw two things I haven’t seen before.

The first was the line of the Tropic of Cancer marked on a road. Usually in India, such things get ignored, so it was nice to see the line clearly marked on the road, together with a road-side sign.

The second interesting thing was something I haven’t seen elsewhere in India: Good quality roads dotted with warehouses every 10-15 km.

Warehouse on a farm by the side of a road

Apparently, farmers whose land is adjacent to roads build these warehouses and rent them out to other farmers for storage.  The farmers we spoke with said they normally store produce at a room in their home or at a nearby warehouse.

There is increasing interest and usage of the system of warehouse receipts in India. Farmers can make more money if instead of selling their crop immediately upon harvest, if they can hold on to it for longer. However, farmers have to have access to good quality warehouses where they can be confident of little damage to their stored grains. If farmers need cash during this time, they can use the warehouse receipt to avail of loans.

Apparently the govenment of India introduced the “Negotiable Warehouse Receipt System” in 2010. So farmers who are interested in availing loans can deposit their produce in warehouses registered with a regulatory authority.

Not sure how well this works, but regardless of loan facility the presence of warehouses can only be a benefit to farmers in Madhya Pradesh.

This entry was posted in Agriculture and farming, Economics and public policy, Micro-enterprises & rural businesses and tagged . Bookmark the permalink.

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