Grain storage is primarily in the public sector and is the responsibility of Pakistan Agricultural Storage and Services Corporation (Passco) as well as four provincial food departments. Passco and the provincial departments are also responsible for regulation of agricultural commodity markets and for activities of provincial seed and fertiliser storage agencies.

Data on agricultural storage capacity is sketchy, but total wheat storage capacity in the public sector is estimated at about 5.2 million tons, of which 1.3 million tons is with Passco while 2.45 million tons with the Punjab Food Department, 0.71 million tons with the Sindh Food Department, 0.16 million tons with the NWFP and the remaining with the Balochistan Food Department.

Self-sufficiency in food grains requires adequate facilities for its storage. The existing storage facilities available are insufficient at various levels for large increase in production. Large-scale grain storage problem exist due either to traditional methods of seed storage or shortage of commercial grain storages and their management.

Apart from causing shortages, exports of agricultural produce are also hampered by lack of modern storage facilities. Improper post-harvest handling of agricultural produce results in quality and quantity losses in addition to rise in consumer prices. According to an estimate the post-harvest losses in fruits and vegetables range between 25 and 40 per cent causing low returns to growers, processors and traders, consequently resulting in loss of foreign exchange earnings.

Main causes of this loss, both in terms of quality and quantity, are the result of stress related to excessive or insufficient heat or cold, improper mixture of environmental gasses such as oxygen, carbon dioxide and humidity, poor nutrient and inadequate storage and transportation facilities.

Cold storage facilities generally consist of godown style facilities, which can accommodate 10,000 to 30,000 crates of produce. In developed countries losses are generally at one per cent while 3-10 per cent losses have been reported by developing countries.

In Pakistan, out of 13.674 million tons of fruits and vegetables produced annually, about 35-40 per cent goes waste. In case of cotton insects, pests, diseases and weeds reduction in yield at harvest is 30-35 per cent and around 25 per cent during storage.

Godowns do not provide significant protection against insect infestation and cannot be made gas impermeable to facilitate fumigation. Concrete or metal silos, which can store up to 5,000 tons of grain and can effectively be fumigated and provide protection against insect infestation, are little used locally in public sector, primarily for cost consideration.

Storage losses for wheat in particular are estimated to be significant. Loss assessment surveys dating late 1980s show that storage losses for wheat can vary depending on type of storage container, and whether the area surveyed supported irrigated or rain-fed agriculture. Storage losses can range between 6.6 per cent for jute bag storage in irrigated areas and two per cent for metal bin storage.

According to findings of the Prime Minister's Committee agriculture storage is one of four areas of immediate possible intervention. As at present only 30 per cent commodities have covered storage facilities, the committee felt a need for this overcoming this shortage by public-private partnership arrangements. Further, cool chains are particularly important in this respect.

The committee was of the view that community-based infrastructure including storage was required. In addition to this, the government would also initiate new development schemes worth Rs27.354 billion for enhancing the existing capacity of grain storage.

Multilateral financing agencies such as Asian Development Bank (ADB) have emphasised the 'privatisation', rental or leasing of agricultural storage facilities. Policy loans such as $350 million Agriculture Store Programme Loan II approved in November 2001 included conditionalities on the role of Passco restricting it largely to management of a strategic reserve of wheat and restructuring it to compete with the private sector.The provincial food departments were to be phased out.

These conditionalities, however, have not been complied with to any significant degree and Passco continues its operations as before. The private sector, however, has entered into procurement of wheat since 2000 and in 2005-06 the private sector is estimated to have picked up 1.3 million tons of wheat.

In August 2006 a UK-based firm entered into a joint venture with a local partner to set up a bulk storage facility for grains for an integrated logistics facility, providing storage as well as transport services. However, this has also not become fully functional.

Banks are generally reluctant in giving loans to agriculture and agriculture-related activities and providing advances for storage facilities is also no exception. The central bank is continuously persuading and advising banks in this respect.

In one of such advice on April 10, 2002 it asked the presidents of all banks to look into the matter personally as the banks were not found serious in disbursements of agricultural loans for constructions of wheat godowns/silos.

In June 2002, the central bank decided to include the credit for construction of silos and other structures for wheat in the mandatory credit targets of banks for agriculture.

The mandatory credit targets have been discontinued but there is no considerable improvement in the storage facilities. Keeping in view the importance of the matter, it is necessary that various stake holders coordinate their efforts and take some immediate initiative in this respect.