With the twin objectives of providing scientific storage to agricultural produce and allied products and also mercantile goods and giving easy credit to the depositors of the products, Warehousing Corporation was established in Public Sector in 1970 to stabilise the agrarian economy of the country.
For want of scientific warehousing facilities, it is estimated that quantitatively and qualitatively 5 to 15 per cent of the production of various commodities are lost by microorganisms, insects, rats, birds, floods, fire, defective handling etc. The producers have neither storage nor credit facilities. They are compelled to have distress sales immediately after harvest, when prices are low, for meeting their urgent financial obligations. The warehousing increases the holding capacity and easy credit from banks to wait for an economic price.
No major activity could be undertaken before 1973, because of War of Liberation and subsequent pre-occupation of the entire nation in rehabilitation and reconstruction programmes. From 1973 onwards, however, the Corporation has embarked upon an ambitious programme of planning and constructing modern warehouses for producers, co-operatives, public undertakings, port trusts and Govt. with the ultimate aim of operating as many centers as possible
Origin of Warehousing Corporation
The public warehousing concept is a recent development in this subcontinent. The Royal Commission on Agriculture in 1928, the Reserve Bank of India in 1944, the Pakistan Agricultural Enquiry Committee 1951-52 , and the Pakistan Credit Enquiry Commission in 1959-69, had urged the need for setting up licensed warehouse with scientific storage facilities for easy credit for agricultural commodities. It was recommended that the Warehousing Receipt should be made negotiable instrument so that the farmers may receive easy bank credit upon production of the warehouse receipt issued against his deposited commodities and they tide over his temporary financial crisis just after the harvesting period without having to part with his produce at an uneconomically low price. These findings and recommendations led to the enactment of the East Pakistan Warehouses Ordinance in 1959. Warehousing being a capital intensive industry, no warehouse worth the name could be established.
The Warehousing Corporation was therefore established in Public Sector by the enactment of the East Pakistan Warehousing Corporation Ordinance in 1970. This Ordinance of 1970 stands amendment by President’s Ordinance No.31 of 1973 (Warehousing Corporation Amendment) Order, 1973, taking effect from 21.11.1972 and Act xxxii of 1973 passed by the parliament on 24.9.1973.
The Corporation was earlier operating under the Ministry of Agriculture. Since the scope and functions were enlarged through amendment to meet the National Scientific Storage needs of all industrial products and mercantile goods, besides Agricultural Produce for effective coordination and functioning, the Corporation has been placed directly under the Prime Minister’s Secretariat. The Corporation is therefore to expand its promotional activities for Agriculture Sector, as well as for commercial undertakings.
Board of Directors
The Board of Directors of the Corporation consists of a full time chairman assisted by two full time paid Directors appointed by Govt. each for a period of 3 years. Chairman of the Board is the Chief Executive of the Corporation. The Chairman is advised by specialists in construction, grading, storage, preservation, finance, credit, insurance, training etc. in running day-to-day operations.
The authorised share capital of the Corporation is Tk.30 million divided into 3,00,000 shares of the face value of Taka 100 each. The Govt. shall subscribe for Taka 2,00,000 shares of the total face value of Taka 20 millions, while 1,00,000 shares of the total face value of Taka 10 million shall be subscribed by the financial institutions, statutory corporations, Co-operative Societies and Bangladesh Jute Association. So far the Govt. has contributed Tk. 95,38,000 and the Banks and Insurance Corporations Tk. 18,00,00 to the share capital. Besides, a grant of Tk. 58,92,000 was provided by the Govt. against a few projects. In case need for more fund arises there is provision in the charter to borrow money from internal and external sources.
Primarily warehousing being a promotional project to meet the social objective of the nation, hardly any substantial financial returns can be expected during many initial years. The guiding principle is to provide maximum social benefit. The share capital will form only a small fractions of the need. The present programme envisaged during the current plan would itself cost double, due to increase in cost of construction. The promotional projects need be financed by grants and com mercial projects need be financed by long-term loans without interest or low interest from Govt. or aid from friendly foreign countries or International Agencies.