It creates more space for bigger harvests in Telangana

For most farmers, a good harvest brings relief. For Alli Srinivas, this marks the beginning of another struggle.

After months of tending to the chilli crop at his 10-acre farm in Ramannagudem village in Telangana’s Mulugu district, Srinivas hoped the seasonal crop would help him recover from two consecutive years of losses. But he quickly made up his mind: this time there would be no holding stocks in anticipation of a better market and no gambling on future returns.

The 47-year-old sold all his produce soon after harvest, using the proceeds to pay off mounting debts rather than investing in storage and waiting for prices to improve.

“Normally, we transport our chillies to private cold storage units near Enumamula agricultural market in Warangal, nearly 120 kilometers from our village. But this year we were forced to sell immediately after harvest. Transport and storage costs are high and if prices don’t improve, farmers will bear the burden,” he explains.

Srinivas’ story reflects a larger challenge faced by chilli farmers across the Godavari belt of Telangana. In villages where chili occupies nearly 70% of the cultivated area, farmers are often caught between low market prices and high costs of preserving their produce. The nearest cold storage facilities are usually several hours away, forcing growers to spend extra money on transport and storage at a time when they are already financially strapped. When prices do not recover, the cost of waiting can become an additional burden. Many farmers have no choice but to sell immediately, even when market conditions are unfavorable.

Srinivas believes a government-run cold storage facility closer to home could mean the difference between a profitable season and another year of losses. The government’s proposed cold storage units will allow farmers to store their produce for up to two to three months at a nominal fee, giving them the flexibility to wait for more remunerative prices.

Growing performance, tense storage

In the case of Telangana, this issue is not about chilli farmers and cold storages alone. At stake is the state’s ability to support a rapidly changing agricultural economy that is producing more grain and horticultural crops than ever before.

Over the past decade, Telangana has emerged as one of India’s leading agricultural producers. Paddy procurement reached a record 147 million metric tonnes (MT) during the 2025-26 season, while total foodgrain production crossed 236 million tonnes. The state is also steadily expanding the cultivation of fruits, vegetables, spices and other high-value crops, increasing the demand for specialized storage facilities.

But higher production alone does not guarantee higher incomes. Agricultural experts note that harvest profits can quickly disappear when farmers are forced into emergency sales due to inadequate storage facilities.

Interior view of Telangana State Warehousing Corporation facility at Allapur village in Toopram mandal of Medak district. | Photo credit: NAGARA GOPAL

Recognizing this growing gap, the government has set an ambitious target of creating an additional 50 million tonnes of storage capacity and 50 million tonnes of cold storage across the state. At the center of this effort is the Telangana State Warehousing Corporation (TGSWC), which was established in 2015 after the bifurcation of Andhra Pradesh and is expanding beyond its traditional role of storing food grains to build a wider network of warehouses, cold storage facilities and logistics infrastructure.

According to TGSWC Chairman Rayal Nageshwar Rao, the corporation’s warehouses have been operating at near full capacity for the past three years, reflecting both rising order volumes and increasing demand for storage space.

“Our extensive network has enabled the state government to support the procurement of paddy and maize on a large scale,” he says.

Currently, TGSWC manages about 38 thousand tons of storage capacity through a combination of its own warehouses and other facilities located throughout the state. Officials say this is the highest capacity achieved by the corporation, surpassing the levels recorded both before and after the formation of Telangana.

But occupancy nearing 100% has also exposed the limits of existing infrastructure.

To bridge this gap, TGSWC has embarked on a major expansion programme. Warehouses with a total capacity of 4.53 lakh MT are under construction at 38 locations, while tenders for another 1.35 lakh MT have been floated at another 11 locations.

“We are planning to increase the storage capacity from around 5 million tonnes to 15 million tonnes, with projects currently in various stages of implementation. Out of these, we expect 3 to 4 million tonnes of storage capacity outages by the end of this year, while sites for another 21 outages have been identified in the state,” explains Rao.

However, for farmers growing perishable crops, conventional storage is only part of the solution. Chillies, turmeric, fruits and vegetables require specialized storage facilities that can maintain quality and allow farmers to better time their sales. Aware of this need, TGSWC is entering the cold storage sector for the first time in its history.

Its first project, a 9,700 metric tonne cold storage facility at M. Venkatayapalem in Khammam district, is expected to be commissioned in the next few months.

Developed at an estimated cost of ₹15 crore, the facility was designed to store fruits, vegetables and other perishable products while reducing dependence on private operators, says Rao. Agriculture and Marketing Minister Tummala Nageswara Rao, who hails from Khammam district, is keen on expansion of storage and cooling units.

For growers in the region, the project offers the hope of lower storage costs and better bargaining power. “The establishment of a government-run cold storage facility is great news for chilli farmers like me, given the high fees charged by private cold storage units,” says Daravath Anand, a young tribal farmer from Khammam.

Khammam and the erstwhile district of Warangal form the heart of Telangana’s chilli economy and are famous for GI-rated Chapata Chilli (Tomato Chilli).

Farm organizations say more facilities are needed in these regions to meet demand. “Though there are several private cold storage units near Warangal, farmers often face problems of storage charges and damage to produce. The government should also consider mini cold storage units for vegetables,” says Somidi Srinivas, Telangana Rythu Sangam state advisor.

Officials say land has already been identified for future cold storage projects at Kesamudram in Mahabubabad district (formerly Warangal district) and Nizamabad, where a dedicated storage facility for turmeric has been proposed.

Growing demand for cold chain facilities is also being felt in emerging industries such as date palm cultivation. Farmers have repeatedly sought specialized cold storage, storage, processing and marketing infrastructure to support the expanding industry.

Modernization and security

As the network expands, TGSWC is also modernizing the way it manages warehouses. Security systems equipped with CCTV cameras have been installed across the facilities and linked to a central monitoring system in Hyderabad.

TGSWC Managing Director K. Lakshmi says the technology enables officials to monitor inventory and warehouse operations more effectively, while improving accountability and transparency.

Telangana State Warehousing Corporation Chairman Rayala Nageshwar Rao demonstrates a central monitoring system in Hyderabad that monitors warehouse operations and inventory levels across the state. | Photo credit: NAGARA GOPAL

The company’s ambitions now go beyond the storage of agricultural produce. With the rapid growth of e-commerce, logistics and manufacturing, TGSWC is exploring new business opportunities. A large warehouse project has been proposed near Moula Ali Railway Station in Hyderabad to serve leading e-commerce and logistics companies. The state government approved the proposal and allotted 23 acres belonging to Telangana Agros for the facility.

“We are also setting up an e-commerce facility in an area of ​​1.68 lakh sq ft at Karkalpahad in suburban Kadthal,” says the official.

The warehousing corporation’s plans are in line with the state government’s broader aim to develop an integrated technology-based logistics ecosystem under the Telangana Rising 2047 plan.

The proposed strategy includes a state-level integrated logistics master plan, a new logistics 2.0 policy, multimodal logistics parks, inland container depots and a network of warehouses and micro-logistics hubs across urban and rural Telangana.

Timing is significant. According to the Knight Frank India India Industrial and Warehousing Market Report for the first quarter of 2026, Hyderabad recorded 1.1 million sq ft of warehouse transactions between January and March, reflecting sustained demand from logistics, manufacturing and allied sectors.

Access and policy concerns

Farming organizations welcome the expansion, but say the benefits of storage infrastructure do not always reach small and marginal farmers.

“Most farmers do not have access to waste disposal facilities under various government agencies due to lack of awareness and transparency,” says Kanneganti Ravi, farm rights activist and founder member of Rythu Swarajya Vedika.

Ravi is also demanding dedicated cold storage for potatoes, arguing that storage gaps affect more crops besides chillies.

The organization sought decentralized warehousing systems through primary agricultural cooperatives, farmers’ organizations, and state warehousing corporations, while retaining government control over purchasing and quality assessment mechanisms. It argues that excessive concentration of storage infrastructure in the hands of a few private operators could increase dependence on grain storage and logistics businesses.

For Telangana, the challenge is no longer limited to increasing production. It has already demonstrated its ability to grow more food. Another test is whether it can help farmers earn more from what they grow.

As the country seeks to expand the cultivation of fruits, vegetables, spices and flowers in the coming decades, investments in warehouses, cold chains, aggregation centers and logistics networks are expected to play an increasingly important role.

For farmers, the problem is not measured in lakh metric tonnes or storage capacities. It’s about having the freedom to hold on to your harvest instead of rushing it to market, and the freedom to ensure seasonal toil translates into a fair return rather than another cycle of debt.