The paper highlights the need for establishing rural godowns to offset the current food crisis scenario. It also focuses on the issues and perspectives related to the scheme, which encourages the establishment of godowns. However, it cautions the borrowers that they should not be just after the subsidy. Borrowers must realize that subsidy is only a motivating factor to promote infrastructure such as rural godowns and they must not change their entrepreneurial mindset. The paper also discusses the eligibility criteria for getting subsidy, such as the way the dimensions of rural godowns are being followed within the stipulated guidelines of National Bank for Agriculture and Rural Development (NABARD).

Wastage of food grains due to lack of storage facility is a pressing problem facing the rural India. The low level of food buffer creates a wide gap between demand and supply of food grains. India ranks among the top three in the production of commodities, such as food grains, fruits, vegetables, milk, cotton, and sugarcane. however, their per capita availability in India is very low when compared with other developing countries because of the wastage of commodities due to lack of proper storage facilities.

On the other hand, growth in rural godown infrastructure also led to delivery demands from the three national commodity exchanges in the northern and western pockets. The producers of wheat, chana, sugar, urad, and soyabean prefer to store their crops in godowns the moment they spot an opportunity in real time futures prices. More than 100 futures contracts of different farm commodities are now traded in different exchanges.

With a view to creating scientific storage in rural areas, the government is implementing a central sector scheme for the construction of rural godowns. The scheme, which is being implemented since March 2001, provides subsidy to private and cooperative bodies on the capital cost of the storage projects.

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