|1. Introduction |
India is one of the largest producers of onion in the world second only to China, accounting for 16 percent of world area and 10 percent of production. In India, it is grown on 0.39 million hectares with production of 4.30 million tonnes of bulbs per annum (FAO,1995). The current year's production is estimated at 4.7 million tonnes. It is one of the most important vegetable crops of our country and forms a part of daily diet in almost all house holds.
Most of the farmers bring onion directly to the market after harvest as proper storage facilities are not available with them. The present storage capacities are quite inadequate and most of the available units are traditional and unscientific. Fearing losses, farmers usually unload their entire stock within a month of harvest. As a result, during this period prices rule very low due to glut situation. Thereafter, the rise in prices is quite rapid and sometimes wide fluctuations occur leading to dissatisfaction amongst the producers as well as consumers. To improve the situation, GOI desired to create appropriate storage structures for onion, both at farm level as well as at market places. It drew a capital subsidy programme for the infrastructure development in which a pivotal role has been assigned to NABARD for its successful implementation. It has been planned to create a storage capacity of 4.5 lakh tonnes of onion during 1999-2000 and 2000-2001 through capital investment subsidy programme. Subsidy to the extent of 25% of the investment cost subject to a maximum of Rs. 500 per tonne has been proposed to be routed through NABARD for the credit delivery system.
We endeavor to provide information on various broad technical and financial aspects of a onion storage unit to enable all the participants for the speedy clearance of such projects.
2. Status of Onion Storage Structures and its Potential in India
Onion is grown almost round the year in one or other parts of the country. It is predominantly a Rabi season crop but is also grown under a wide range of agro climatic conditions in other seasons. There are three main crops of onion grown according to climatic conditions and they are called Kharif, Rangada and Rabi or summer. According to agro climatic conditions, specific varieties are developed for different seasons; Kharif varieties can be grown under relatively short photo period (10-11 hr) and cloudy atmosphere but have poor keeping quality while Rabi varieties require long photo period (12-14 hr) with clear sunny days and some of them have excellent keeping quality of four to six months. Onion storage structures are designed mainly to store the Rabi varieties.
World output of onion is about 43 m tonnes. The notable producing countries are China, USA, USSR, Netherlands, Spain and Turkey. Most of the onion produced in India comes from the state of Maharashtra, Gujarat, Uttar Pradesh, Orissa, Karnataka, Tamil Nadu, Madhya Pradesh, Andhra Pradesh and Bihar. Maharashtra is the leading producer accounting for 20% of the area and 25% of the production.
The present storage capacity for onion is about 4.6 lakh tonnes. This is quite inadequate compared to our total production. Even most of the structures available are traditional and unscientific. If 40 % of the stocks are earmarked for scientific storage the potential for new storage structures is about 12.6 lakh tonnes. However, it has been projected by the Expert Committee on Cold Storage and Onion Storage that about 1.5 lakh tonnes on-farm capacity in production areas and 3.0 lakh tonnes capacity at APMCs and other market places are required in next 5 years. Thus there remains a vast potential to be tapped.
3. Extent of Storage Losses
The onion bulbs are generally stored from May to November for a period of four to six months. However, 50-90 per cent storage losses are recorded depending upon genotype and storage conditions. The total storage losses are comprised of physiological loss in weight (PLW) i.e. moisture loss and shrinkage (30-40%), rotting (20-30%) and sprouting (20-40%). The PLW can be minimized by harvesting at right time, proper curing of onion bulbs and subsequent storage at desired temperature and humidity conditions. Generally, the rotting losses are at peak in initial months of storage, particularly in June and July, when high temperature coupled with high humidity result the losses. However, proper grading and selection of quality bulbs and good ventilation conditions can reduce the rotting losses. Application of post harvest fungicidal sprays can also reduce the rottings. But this is not a practice in India. Sprouting losses are usually recorded at the end of storage period or when exposed to high temperature of humid air. Noticeable sprouting losses are observed because of storage of poor quality bulbs having less rest and dormant period and also having thick neck. Comparatively, more sprouting losses are recorded in dark red and white onion cultivars than the light red onion cultivars.
4. Onion and its Physiology for Storage
Every agricultural commodity is required to be stored properly to prolong the availability with minimum qualitative and quantitative losses. Onion is not an exception. The onion bulb is a natural food store for the plant, but it is a living system undergoing a process of development towards sprouting, and is subject to decay by various disease causing organisms. The objective of storage technology is to maintain the bulbs for as long as possible in an unchanged sound condition with longer shelf life, and allow them to transport and market after removal from store without much losses.
It is necessary to have the knowledge of the physiology of dormancy and epidemiology of storage disease while thinking of long term storage. Systems to provide long dormant condition and suitable condition which is unfavorable for disease development can be engineered using the physical principles of temperature and humidity control. Also in this process economic and technological constraints will have to be looked into. For this, two basic strategies i.e. high temperature dormancy of onion bulbs and maintaining storage temperature at around 300 C need to be exploited.
The physiological and pathological processes that proceed within a store of onion bulbs interact with the physical process of heat and water vapour exchange so as to mutually influence the environment within the store. Main factors which influence onion storage and bring change in the bulbs are summarized as under in sequence:
5. Onion Storage Structure Requirements
For effective long storage of onion the parameters essential to be looked after are the bulb size, choice of cultivars, cultivation practices, time of harvest, field curing, removal of tops, drying, grading, packing, storage conditions (optimum storage range of relative humidity 65% to 70% with the temperature ranging between 250 C to 300 C).
Salient Features of Improved Storage Structures are:
6. Onion Storage Practices
Onions are stored either loose or in bags. The beneficiaries may be advised to sort the onions prior to storage and thereafter atleast once in thirty days to take out the rotten/ infected onions in order to avoid further spread of diseases/ losses. Generally, a loss of about 20-30 % is there during a storage season in the form of weight loss of onions which can be controlled with proper care. However, the other types of losses can be controlled to a greater extent if the structure is designed to facilitate maximum natural ventilation through the stored onion and sorting is done at regular intervals.
7. Promoter's Profile
The promoters can be individuals, group of individuals, cooperative societies, proprietary/ partnership concerns and joint sector companies in public or private sector. While formulating a project, complete details of the promoter(s), their experience in the activity and net worth, etc. have to be incorporated.
8. Physical and Financial Outlay>
The following physical provisions with their costs are considered for an onion storage godown.
9. Financial Viability
The financial analysis of the investment of a 25 MT capacity onion storage structure has been attempted and is placed at Annexure II. The project has a margin money component of 25% with the rate of interest on term loan as 14%. For this project, the financial indicators of the investment are as under:
10. Dos and Don'ts
In order to safeguard the interest of bankers and borrowers, it would be necessary to take certain precautionary measures. As a ready reckoner, some of the important aspects are shown in the form of Dos and Don'ts in Annexure IV for success of the scheme.
11. NABARD's role
NABARD provides refinance support to various eligible financing banks for financing onion storage structures under its normal refinance programme, the guideline for which are issued from time to time. A cheklist to be used by the bankers for submitting the proposal for refinance is given at Annexure V.
Government of India has sanctioned a capital investment subsidy scheme for construction/ modernization/ expansion of cold storages and storages for horticultural produce. The details of the scheme are placed at Annexure VI. NABARD has been made a nodal agency for promoting the activity through credit delivery system.
|Annexure I |
TECHNO - FINANCIAL PARAMETERS AFDOPTED FOR WORKING OUT THE ECONOMICS OF A 25 MT ONION STORAGE STRUCTURE
|Annexure II |
MODEL BANKABLE PROJECT FOR A 25 MT ONION STORAGE STRUCTUREMODEL BANKABLE PROJECT FOR A 25 MT ONION STORAGE STRUCTURE
|Annexure III |
|DO'S AND DON'TS|
|Annexure V |
CHECK - LIST FOR ONION STORAGE GODOWNS
A) General Information
Distance from the main market for the commodity.
Location of the nearest onion storage godown from the proposed site & its capacity.
Details about the site - Area of the plot/ Site plan indicating the existing roads and the natural drainage.
Copy of the land records clearly indicating the title and cost.
Other communication facilities available near the site.
Any other consideration for selection of proposed site
Details of structure clearly indicating the size (L/B/H) and justification for the size.
Layout plan for the proposed structures indicating existing structures, if any.
Ambient temperature and humidity conditions during storage season.
Detailed technical & structural drawings indicating specifications.
Quantity and rate analysis of building materials vis-a- vis rates as per SOR.
Mechanical ventilation provision if any, If so the details with provision of electricity.
Any other relevant information
Organization Structure , details of manpower requirement and salary structure.
G) Financial Information Project Outlay
Proposed schedule of implementation.
Estimates of aggregate income, expenditure and surplus from the storage.
Comments on the financial viability of the project along with cash flow, B/C ratio, net present worth, financial rate of return , Internal rate of return and Debt Service Coverage Ratio
Assumptions made for calculating income and expenditure statement.
Projected Income and Expenditure Statement for next five years.
Socio-economic benefits including employment generation and benefits to farmers.
Comments on the financial position of the borrowers/ implementing agency.
In case of companies, partnership firm or society an analysis of their financial position and audited financial statements for last three years.
H) Conclusions and recommendations
DETAILS OF CAPITAL INVESTMENT SUBSIDY SCHEME FOR >
CONSTRUCTION OF ONION STORAGE STRUCTURES
1. Eligible Borrowers : Partnership firms, cooperative societies, private/ public joint sector companies, Agricultural Produce Marketing Committees, Marketing Boards and Agro Industries Corporations.
2. Eligible Banks for Refinance from NABARD : Commercial Banks (CBs and RRBs), Cooperative Banks (SCBs and SCARDBs), ADFCs (Bangalore, Chennai and Hyderabad).
3. Project Cost : Depending upon the capacity, technology used for onion storage structures on the basis of actuals/ estimates/ invoices of machineries, etc.
4. Type of technology : Preference is given for modern design/ technology and energy saving devices.
5. Quantum of Subsidy :
7. Term loan for financing banks/ Institutions (ADFCs) : Balance amount (including subsidy, where available)
8. Rate of interest to be charged from the borrower :
|9. Rate of interest on refinance amount to be charged to financing bank : As applicable. 10.Quantum of Refinance : 90% of the amount financed to borrower (including subsidy) |
11.Repayment period : Depending upon cash flow and will be upto 5 years.
12. Other Conditions : The terms and conditions as applicable to project lending by financing banks and / or refinance by NABARD including the technical feasibility and financial viability are applicable to the projects under the scheme. The borrower/ financing bank/ shall furnish the project report in respect of the scheme as prescribed by GOI/ NHB/ NABARD for the purpose of monitoring and physical checking of projects.