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Grain Storage

In the wake of the global financial crisis, attention focused on food  security . Some governments have responded to the unprecedented food price spikes of recent years by increasing the stocks of grain that they hold as strategic reserves. For such policy initiatives to best improve food  security , the expanded cereals stocks must be contained in modern bulk storage and handling systems that will minimize losses in storage, lower operating costs, and allow for efficient management of the grain in storage. Traditional storage of bagged grain in warehouses falls far short of fulfilling any of these criteria. A 2007 study estimated up to $4 billion in post-harvest losses in Sub-Saharan Africa alone, which is equivalent to the annual calorific requirements of 48 million people.  Nevertheless, traditional storage is still widely practiced by state grain agencies—especially in South Asia, and to a lesser extent in Southeast Asia and Sub-Saharan Africa. Recognizing this challenge, governments have begun to institute measures to reduce food wastage, including that due to poor storage and handling.

One solution identified by countries running large food  security programs was to introduce public-private partnerships (PPPs) in food storage, especially for storage of grain. PPPs in grain storage have brought simple solutions like storing surplus grain in vertical silos instead of warehouses or open platforms that reduce losses due to rot , theft and misuse by a staggering 20 percent. By partnering with the private sector, the government is accessing experience building and operating large-scale, state-of-the-art storage facilities for port installations, inland grain production locations, and at processing plants like wheat and rice mills.

If properly structured, a PPP for government grain storage can ensure that:

  • Public funds or borrowing capacity are not tied up in capital construction costs.
  • Storage facilities are built at a competitive price using the most suitable technology.
  • Government agencies spend limited time on management of stored grain in a large facility.
  • Hiring of new public employees, including labor for the expanded grain reserve, is minimized.
  • Know-how in grain management and storage technology is transferred from the private sector to government.
  • Governments are not left with an unused asset when policy or market conditions change and grain stocks must be reduced.

Tools & Guidance

Projects & Case Studies

    • 2010
    • World Bank Group (WBG)

    India: Punjab Silos

    PPP Brief

    India has been successful in developing agriculture in its fertile northern belt, resulting in an abundance of grain. Unfortunately, its ability to store it has lagged behind. Today, India has neither the capacity nor facilities to store grain safely, leading to excessive losses through exposure, deterioration and pests. Poor inventory management has only added to the problem. In response, the Government of Punjab, India’s leading agricultural state, turned to IFC to structure a pilot public-private partnership to address this issue. The resulting concession—the first of its kind in India at the state level—was awarded in May 2010.

    • 2011
    • World Bank Group (WBG), Food and Agriculture Organization (FAO), Natural Resources Institute (NRI)

    Missing Food

    The Case of Postharvest Grain Losses in Sub-Saharan Africa

    Low-income, food-defi cit countries have become especially concerned about the global and national food situation over the past three years. While the proximate cause of this heightened concern was the surge in food prices that began in 2006 and peaked in mid-2008, concerns remain for other reasons, among them the higher market-clearing price levels that now seem to prevail, continuing price volatility, and the risk of intermittent food shortages occurring repeatedly far into the future. For lower-income Sub-Saharan Africa (SSA) countries, ongoing contributing factors include persistently low productivity, diffi culty adapting to climate change, fi nancial diffi culties (inability to handle the burden of high food or fuel prices or a...

Lessons & Analysis

    • 2012
    • World Bank Group (WBG), International Finance Corporation (IFC)

    A Harvest of Practical Insights

    Lessons learned in agriculture, agribusiness, sustainable rural development, and climate change

    This SmartBook presents practical lessons learned by staff from across the IFC and the World Bank, on approaches for engaging in agriculture that have led to success (includes lesson on Punjab Silos PPP on page 24).

    • 2014
    • Shyamala Shukla, Neeraj Gupta
    • World Bank Group (WBG)

    Partnerships IQ: Grain Storage Public-Private Partnerships

    India has a number of early lessons to offer in the development of grain storage PPPs: from specific bid requirements and clauses in draft contracts, the importance of ensuring early understanding and acceptability of project structures by investors, to the critical role of transparency.

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