Storage and Warehousing -
Storage is an important marketing function, which involves holding and preserving goods from the time they ae produced until they are needed for consumption
Necessary - The storage of goods, therefore, from the time of production to the time of consumption, ensures a continuous flow of goods in the market.
Storage protects the quality of perishable and semi-perishable products from deterioration; Some of the goods e.g., woolen garments, have a seasonal demand. To cope with this demand, production on a continuous basis and storage become necessary;
Helps in the stabilization of prices by adjusting demand and supply;
Storage is necessary for some period for performance of other marketing functions.
Storage provides employment and income through price advantages.
Storage Types
Underground Storage - Structures are dugout structures similar to a well with sides plastered with cowdung. They may also be lined with stones or sand and cement. They may be circular or rectangular in shape. The capacity varies with the size of the structure - Advantages
Underground storage structures are safer from threats from various external sources of damage, such as theft, rain or wind.
The underground storage space can temporarily be utilized for some other purposes with minor adjustments; and
The underground storage structures are easier to fill up owing to the factor of gravity.
Surface storage structures
- Foodgrains in a ground surface structure can be stored in two ways - bag storage or bulk storage.
Bag storage -
Each bag contains a definite quantity, which can be bought, sold or dispatched without difficulty;
Bags are easier to load or unload.
It is easier to keep separate lots with identification marks on the bags.
The bags which are identified as infested on inspection can be removed and treated easily; and
The problem of the sweating of grains does not arise because the surface of the bag is exposed to the atmospheres.
Bulk or loose storage
The exposed peripheral surface area per unit weight of grain is less. Consequently, the danger of damage from external sources is reduced; and
Pest infestation is less because of almost airtight conditions in the deeper layers.
The government of India has made efforts to promote improved storage facilities at the farm level.
Improved grain storage structures
For small-scale storage
PAU bin - This is a galvanized metal iron structure. It s capacity ranges from 1.5 to 15 quintals. Designed by Punjab Agricultural University.
Pussa bin - This is a storage structure is made of mud or bricks with a polythene film embedded within the walls.
Hapur Tekka - It is a cylindrical rubberised cloth structure supported by bamboo poles on a metal tube base, and has a small hole in the bottom through which grain can be removed.
For large scale storage
CAP Storage (Cover and Plinth) - It involves the construction of brick pillars to a height of 14" from the ground, with grooves into which wooden crates are fixed for the stacking of bags of foodgrains. The structure can be fabricated in less than 3 weeks. It is an economical way of storage on a large scale.
Silos - In these structures, the grains in bulk are unloaded on the conveyor belts and, through mechanical operations, are carried to the storage structure. The storage capacity of each of these silos is around 25,000 tonnes
Warehouses are scientific storage structures especially constructed for the protection of the quantity and quality of stored products
Scientific storage - The product is protected against quantitative and qualitative losses by the use of such methods of preservation as are necessary.
Financing - Warehouses meet the financial needs of the person who stores the product. Nationalized banks advance credit on the security of the warehouse receipt issued for the stored products to the extent of 75 to 80% of their value.
Price Stabilization - Warehouses help in price stabilization of agricultural commodities by checking the tendency to making post-harvest sales among the farmers.
Market Intelligence - Warehouses also offer the facility of market information to persons who hold their produce in them
Working of Warehouses
Acts: - The warehouses ( and SWCs) work under the respective Warehousing Acts passed by the Central or State Govt. -
Eligibility: - Any person may store notified commodities in a warehouse on agreeing to pay the specified charges. -
Warehouse Receipt (Warrant): - This is receipt/warrant issued by the warehouse manager/owner to the person storing his produce with them. This receipt mentions the name and location of the warehouse, the date of issue, a description of the commodities, including the grade, weight and approximate value of the produce based on the present prices.
Use of Chemicals: - The produce accepted at the warehouse is preserved scientifically and protected against rodents, insects and pests and other infestations. Periodical dusting and fumigation are done at the cost of the warehouse in order to preserve the goods. -
Financing - The warehouse receipt serves as a collateral security for the purpose of getting credit. -
Delivery of produce: - The warehouse receipt has to be surrendered to the warehouse owner before the withdrawal of the goods. The holder may take delivery of a part of the total produce stored after paying the storage charges. - Types of warehouse
1. On the basis of Ownership
Private warehouses: These are owned by individuals, large business houses or wholesalers for the storage of their own stocks. They also store the products of others.
Public warehouses: These are the warehouses, which are owned by the govt. and are meant for the storage of goods.
Bonded warehouses: These warehouses are specially constructed at a seaport or an airport and accept imported goods for storage till the payment of customs by the importer of goods. These warehouses are licensed by the govt. for this purpose. The goods stored in this warehouse are bonded goods. Following services are rendered by bonded warehouses:
The importer of goods is saved from the botheration of paying customs duty all at one time because he can take delivery of the goods in parts.
The operation necessary for the maintenance of the quality of goods - spraying and dusting, are done regularly.
Entrepot trade (re-export of imported goods) becomes possible.
On the basis of Type of Commodities Stored
General Warehouses: These are ordinary warehouses used for storage of most of foodgrains, fertilizers, etc.
Special Commodity Warehouses: These are warehouses, which are specially constructed for the storage of specific commodities like cotton, tobacco, wool and petroleum products.
Refrigerated Warehouses: These are warehouses in which temperature is maintained as per requirements and are meant for such perishable commodities as vegetables, fruits, fish, eggs and meat.
Warehousing - agricultural and industrial commodities
Acquire and build godowns and warehouses at suitable places in India.
Run warehouses for the storage of agricultural produce, seeds, fertilizers and notified commodities for individuals, co-operatives and other institutions,
Act as an agent of the govt. for the purchase, sale, storage and distribution of the above commodities.
Arrange facilities for the transport of above commodities.
Subscribe to the share capital of state Warehousing corporations and
Carry out such other functions as may be prescribed under the Act.
The Warehousing must be running air-conditioned , and provides cold storage facilities at godowns at
Special storage facilities have been provided by the Warehousing for the preservation of hygroscopic and fragile commodities.
The corporation has also evolved techniques for the storage of spices, coffee, seeds and other commodities.
Warehousing - Separate warehousing corporations were also set up in different States . The areas of operation of the State Warehousing Corporations are centres of district importance. The total share capital of the State Warehousing Corporations is contributed equally by the concerned State Govt.
Food corporation of India
Apart , the Food Corporation of India has also created storage facilities. The Food Corporation of India is the single largest agency which ahs a capacity of 26.62 million tonnes.
Linking Warehousing and Marketing Credit The Warehousing Corporations Act came into operation on 18th March 1962. The Act defines the specific functions and the area of operations of Central and State Warehousing Corporations. It enlarged the list of the number of commodities meant for storage. National Co-Operative Development and Warehousing This was set up on 1st September 1956.
To provide funds to warehousing corporations and the State Governments for financing co-operative societies for the purchase of agricultural produce on behalf of the Central Government.
To advance loans and grants to State Governments for financing co-operative societies engaged in the marketing, processing or storage of agricultural produce, including contributions to the share capital of these institutions,
To subscribe to the share capital of the Central Warehousing Corporation and advance loans to State Warehousing Corporations and the Central Warehousing Corporation;
To plan and promote programmes through co-operative societies for the supply of inputs for the development of agriculture; and
To administer the National Warehousing Development Fund. Central Warehousing Corporation This Corporation was established as a statutory body in New Delhi on 2nd March 1957. The central Warehousing Corporation provides safe and reliable storage facilities for about 120 agricultural and industrial commodities. Functions
To acquire and build godown and warehouses at suitable places in India;
To run warehouses for the storage of agricultural produce, seeds, fertilizers and notified commodities for individuals, co-operatives and other institutions;
To act as an agent of the government for the purchase, sale, storage and distribution of the above commodities;
To arrange facilities for the transport of above commodities;
To subscribe to the share capital of State Warehousing Corporation; and advance loans to State;
The Central Warehousing Corporation is running air-conditioned godowns at Calcutta, Bombay and Delhi, and provides cold storage facilities at Hyderabad. Special storage facilities have been provided by the Central Warehousing Corporation for the preservation of hygroscopic and fragile commodities. State Warehousing Corporations Separate warehousing corporations were also set up in different States of the Indian Union. The area of operation of the State Warehousing Corporations are centers of district importance. The total share capital of the State Warehousing Corporations is contributed equally by the concerned State Governments and the Central Warehousing Corporation. The warehouses ( and SWCs) work under the respective Warehousing Acts passed by the Central and State Governments.
Credit - Credit is that form of confidence reposed in a person, which enables him to obtain from another the temporary use of thing of value. Productive credit is that which is employed to create something materially valuable. Consumptive credit is the one, which is used for meeting the family needs and social obligations.
Agricultural Purpose
Short term credit - Credit needs in this case are for periods of less than 15 months for the purpose of cultivation or for meeting domestic expenses such short period loans are normally repaid after the harvest. The requirement is for purchase of seeds, manures, fodder, payment of wages, revenue, expenses on irrigation, hire charges of equipment's.
Medium term credit - Finances are required for medium periods varying between 15 months and 5 years. The funds are required for purchase of cattle, making some improvements on land, buying implements repairs to machinery, farm house, laying orchards etc.
Long term credit - These are needed for purchase and reclamation of land, construction of wells, repay old debts, permanent improvements on land, purchase of costly agricultural machinery viz. tractor, development of irrigation sources etc. these loans are for long period of more than 5 years.
Non farm business purposes - In this case the short term credit is taken for repair of production equipments, transport equipments and furniture etc. and long term loan; is required for purchase, construction, addition and repair to building for non farm business, purchase of transport equipment and other capital expenditure on non farm business.
Family expenditure - Here short-term loans are required for purchase, construction, addition and repair to building for non farm business, domestic utensils, clothings, medical, grossery educational and other family expenses. Long term loans are taken for purchase, construction and repairs of residential houses and expenditure on marriage, other ceremonies, litigations etc.
Other purposes - These include purchase of buildings, ornaments, shares and debentures of companies, co-operatives, payment of old debts and so on.
Chattel and collacteral credit - The credit is given on the security of farmers livestock, crops or warehouse receipts, while the letter on the security of other kinds of movable property such as shares, bonds, government securities and insurance policies.
Personal credit - Which is advanced on the promissory or personal notes of the farmer with or without security of a third party such type of credit is based on the security of character of the borrower and take into account the honesty and hard working nature of the borrower, his craning capacity and past record, repaying capacity of the borrower.
Locations Calcutta, Bombay and Delhi Hyderabad Central Corporation . Indian Union
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