Agriculture cooperatives have been playing a significant role in stepping up to the growth of agriculture production in the country through supply of farm inputs and other technical services to the farmers. Cooperatives also provide post-harvest services for procurement, grading, processing, storage and marketing of farmers’ surplus produce. These cooperatives are rendering an equally useful service by maintaining the supply-line and distribution of consumer. Storage cooperative societies in India play a crucial role in the agricultural sector by providing storage facilities for farmers to preserve and safeguard their produce. These societies are formed by a group of farmers or individuals involved in agricultural activities, with the aim of collectively managing storage facilities for agricultural commodities such as grains, fruits, vegetables, and other perishable goods. Here's an overview of the functioning of storage cooperative societies in India.

1. Page | 1
Agriculture cooperatives have been playing a significant role in stepping up to the growth of
agriculture production in the country through supply of farm inputs and other technical services
to the farmers. Cooperatives also provide post-harvest services for procurement, grading,
processing, storage and marketing of farmers’ surplus produce. These cooperatives are rendering
an equally useful service by maintaining the supply-line and distribution of consumer.
Storage cooperative societies in India play a crucial role in the agricultural sector by
providing storage facilities for farmers to preserve and safeguard their produce. These
societies are formed by a group of farmers or individuals involved in agricultural activities,
with the aim of collectively managing storage facilities for agricultural commodities such as
grains, fruits, vegetables, and other perishable goods. Here's an overview of the functioning
of storage cooperative societies in India:
1. Formation: Storage cooperative societies are typically registered under the respective
state's cooperative societies act. Interested individuals or farmers come together and form a
society by following the registration process, which includes documentation, formation of
bylaws, and acquiring necessary approvals from the concerned authorities.
2. Membership: Farmers or individuals engaged in agriculture-related activities can become
members of the storage cooperative society. They contribute capital, usually in the form of
shares, to the society. The membership is open to all eligible individuals, and each member
generally holds one vote in the decision-making process.
3. Infrastructure Development: The storage cooperative society acquires or constructs
storage facilities such as warehouses, cold storage units, silos, or other suitable structures to
preserve agricultural commodities. These facilities are equipped with necessary amenities like
temperature control, ventilation, pest control mechanisms, and security measures to ensure
the quality and safety of stored produce.
4. Procurement and Storage: The cooperative society procures agricultural produce from its
members or other farmers in the region. The produce is carefully stored in the designated
storage facilities, ensuring proper handling and preservation techniques to minimize spoilage,
infestation, or degradation.
5. Quality Control: Storage cooperative societies often employ quality control measures to
maintain the standard of stored commodities. This may involve regular inspections, sampling,
testing, and certification of the produce to ensure adherence to quality parameters and
prevent adulteration or contamination.
6. Marketing and Distribution: Depending on the objectives and scope of the society, storage
cooperative societies may also undertake marketing and distribution activities. They may
facilitate the sale of stored commodities on behalf of their members, negotiate bulk contracts
with buyers, or coordinate with government agencies for the procurement of agricultural
produce at fair prices.
7. Financial Management: The storage cooperative societies manage their finances through
various means. They generate revenue by charging storage fees, processing fees, or
commission on the sale of commodities. The funds collected are utilized for maintenance,
Functioning of Storage Cooperative Societies in India

2. Page | 2
operation, and expansion of storage facilities, as well as for meeting administrative expenses
and providing member benefits.
8. Cooperative Governance: Storage cooperative societies operate democratically, with
members participating in decision-making processes. They elect a governing body or a
managing committee through democratic elections, which oversees the society's operations,
formulates policies, and represents the interests of the members.
9. Government Support: The Indian government recognizes the importance of storage
cooperative societies in agricultural development and provides support in the form of
subsidies, loans, technical assistance, and policy frameworks. These measures aim to enhance
the functioning and effectiveness of storage cooperative societies and strengthen the
agricultural supply chain.
To undertake these functions effectively, cooperatives require adequate captive
storage capacity of their own at the village, mandi and rail head centres. To meet this
requirement, the National Cooperative Development Corporation (NCDC) has been assisting
primary and marketing societies functioning at the village, mandi, district, regional, state and
national levels for construction of godowns of their own to create storage facility, and repair/
renovation of existing capacity of godowns under Central Sector Schemes and Corporation
Sponsored Scheme.
GOVT. OF INDIA SCHEMES FOR COOPERATIVE STORAGE:
Central Sector Integrated Scheme on Agricultural Cooperation (CSISAC):
NCDC has also been providing financial assistance for construction & renovation of godown
under Central Sector Integrated Scheme on Agricultural Cooperation (CSISAC). The scheme
stipulates grant-in-aid 25% for projects located in cooperatively least developed states, 20%
for projects located in cooperatively under-developed states and 15% for projects located in
cooperatively developed states for projects related to weaker sections/women cooperatives
and labour cooperatives.
Developed States/UTs Under developed States/UTs Least Developed States/UTs
NCDC to
S/Govt.
S/Govt.
to
Society
Direct
Funding
NCDC to
S/Govt.
S/Govt.
to
Society
Direct
Funding
NCDC to
S/Govt.
S/Govt.
to
Society
Direct
Funding
Loan 75%
Sub 15%*
Loan
50%
SC 25%
Sub 15%
Loan
65%
Sub 15%
Loan
70%
Sub 20%
Loan
50%
SC 20%
Sub 20%
Loan
65%
Sub 20%
Loan
70%
Sub 25%
Loan
50%
SC 20%
Sub 25%
Loan
65%
Sub 25%
Member’s
Contribution
10% 20% 10% 15% 5% 10%
✓ S/Govt. – State Government/ Sub – Subsidy/ SC- Share Capital
✓ Subsidy subject to availability from Government of India otherwise equivalent loan from NCDC.
✓ * - Subsidy available only to Weaker Section Programme.

3. Page | 3
Agricultural Marketing Infrastructure (AMI) sub scheme of Integrated Scheme
for Agriculture (ISAM):
During the period of 10th Five Year Plan i.e. 2002-07, subsidy was provided by Govt. of India
under Gramin Bhandaran Yojana, a Capital Investment Subsidy Scheme for Construction and
Repair/Renovation of Rural Godowns. NCDC has been one of the implementing agencies to
provide funds to the cooperative societies. The required term loan is funded by Corporation
from its own resources.
The scheme was continued during 11th Five Year Plan i.e. from 2007-2012. During
12th Plan i.e. from 2012-2017, the credit linked subsidy was continued under Central Sector
Agriculture Marketing Infrastructure Scheme (AMI) sub scheme of Central Sector Integrated
Scheme on Agriculture Marketing (ISAM) upto 06.08.2014. Subsequently, credit linked
subsidy was continued for new projects of SC/ST category and for all categories in NER upto
31.10.2016 and later upto 31.12.2016.
Department of Agriculture Cooperation & Farmers Welfare (DAC&FW) has issued
Operational Guidelines for Agricultural Marketing Infrastructure (AMI) sub scheme of
Integrated Scheme for Agriculture (ISAM) w.e.f. 22.10.2018 to 31.03.2020. The scheme has
been extended upto 31.03.2021 or till the date the recommendations of 15th Finance
Commission come into effect, whichever is earlier.
NCDC provides financial assistance for the following under AMI scheme:
• For Storage infrastructure projects.
• For infrastructure projects other than Storage (Primary processing viz. sorting,
grading, chilling, freezing etc.)
• Stand alone cold storage units up to 1000 MT is allowed.
• At present, scheme is valid upto 30.06.2021.
• There is no provision for Renovation of storage infrastructure under AMI scheme.
Funding pattern under AMI Scheme is as under
Category
Rate of Subsidy
on Capital Cost
Subsidy Ceiling
50-1000 MT
(in Rs./MT)
More than 1000 MT up
to 10,000 MT (in
Rs./MT)
Maximum Ceiling
(Rs. in lakh)
A) North Eastern States,
Sikkim, A& N,
Lakshadweep Islands and
Hilly* Areas
33.33% Rs. 1333.20 Rs. 1333.20 Rs. 133.20
B) Other Areas
1. For Registered FPO’s,
Panchayats, Women,
SC/ST entrepreneurs or
Cooperatives ** or SHG’s
33.33% Rs. 1166.55 Rs. 1000.00 Rs. 100.00
2. For all others 25% Rs. 875 Rs. 750 Rs. 75.00
* Hilly area is a place at an altitude more than 1,000 meters above mean sea level.
** SC/ST Cooperatives to be certified by the concerned officer of the State Government.

4. Page | 4
Assistance for Boosting Seed Production component under Sub-Mission for
Seed and Planting Material (SMSP) of National Mission on Agricultural
Extension and Technology (NMEAT)
NCDC is also implementing of Central Sector Scheme on Assistance for Boosting Seed
Production component under Sub-Mission for Seed and Planting Material (SMSP) of National
Mission on Agricultural Extension and Technology (NMEAT), providing credit linked back
ended capital subsidy at the rate of 25% of the project cost subject to a maximum limit of
Rs.25.00 lakh per unit on seed infrastructure development. Private Sector Companies,
individuals entrepreneurs, self help groups, partnership firm and Cooperative Societies are
eligible to get assistance under this scheme. The scheme is implemented through National
Seed Corporation (NSC), nodal agency for implementation and monitoring of the scheme.
CORPORATION SPONSORED SCHEME:
Under the scheme, the loan assistance is provided upto 90% of the project cost for construction/
repair/ renovation of godowns. The member’s contribution should be minimum 10%.
ELIGIBILITY CRITERIA AND PROCEDURE INVOLVED:
Mode of Funding:
Financial assistance is provided through the State Govt. or directly to the eligible cooperatives.
1) Quantum of Assistance and Pattern of Assistance:
Varies from activity to activity and upto 90-95% of the total cost for the most of the activities.
However, in case of strengthening of share capital base/margin money/working capital
assistance, the quantum of assistance can be upto 100%.
2) Yuva Sahakar - Cooperative Enterprise Support and Innovation Scheme:
To encourage newly formed cooperatives take advantage of innovative ventures, especially by
societies with new/innovative idea, NCDC has introduced a new scheme titled, “Yuva Sahakar -
Cooperative Enterprise Support and Innovation Scheme” linked to a Cooperative Startup and
Innovation Fund created by NCDC.
For financing through State Govt:
The eligible societies will have to apply to the Registrar of Cooperative Societies (RCS) for
assistance for construction/ repair/ renovation of godowns. The prescribed application forms
are available at the offices of the State Cooperative Departments, Regional Offices of NCDC
and on NCDC’s website. Based on the recommendation received from the State Govt, NCDC
approves the programme and sanctions assistance for construction/repair/renovation of
godowns.
For financing under Direct Funding:
The information on eligibility criteria, application form and application procedure are available
at NCDC’s website.
Norms for direct funding:
Cooperatives operating for minimum three years & broadly fulfilling following criteria are
eligible:
(i) Net worth should be positive.
(ii) There should be no erosion in share capital.
(iii) Should be in a position to provide 1.25 to 1.5 times security.
(iv) Financial/operational performance of the cooperative should be at satisfactory level of
NCDC.

5. Page | 5
Conclusion
It's important to note that the functioning of storage cooperative societies may vary slightly
across different states in India, as cooperative laws and regulations can differ. The societies'
effectiveness also depends on factors such as local agricultural practices, market conditions,
and the level of participation and cooperation among the members.