For most farmers, a good harvest brings relief. For Alli Srinivas, it marks the beginning of a different struggle.
After tending to the chilli crop for several months in his 10-acre farm in Ramannagudem village in Telangana’s Mulugu district, Srinivas was hopeful that the season’s produce would help him recover from losses for two consecutive years. But he quickly made up his mind: This time there would be no holding on to the stock in hopes of a better market and no gambling on future returns.
The 47-year-old sold his entire produce immediately after harvest, and used the proceeds to repay mounting debts rather than investing in storage and waiting for prices to improve.
“Normally, we transport our chilli produce to private cold storage units near the Enumamula agricultural market yard in Warangal, about 120 km from our village. But this year, we were forced to sell immediately after the harvest. The cost of transportation and storage is high, and when prices do not improve, farmers have to bear the burden,” he explains.
Srinivas’s story reflects a major challenge faced by chilli farmers in the Godavari belt of Telangana. In villages where chilli accounts for about 70% of the cultivated area, farmers often find themselves torn between low market prices and the high cost of preserving their produce. The nearest cold storage facilities are mostly located hours away, forcing producers to spend extra money on transportation and storage at a time when they are already under financial stress. When prices fail to recover, the cost of waiting may become another burden. Many farmers have no option but to sell immediately, even if market conditions are adverse.
Srinivas believes that a government-run cold storage facility close to home could make the difference between a profitable season and another loss-making year. The proposed government cold storage units will allow farmers to store their produce for two to three months at nominal charges, allowing them to wait for more remunerative prices.
Increasing production, stressful storage
For Telangana, the issue extends beyond just chilli farmers and cold storage. At stake is the state’s ability to support a rapidly changing agricultural economy, which is producing more food and horticultural crops than ever before.
Over the past decade, Telangana has emerged as one of India’s leading agricultural producers. Paddy procurement during the 2025-26 season reached a record 147 lakh metric tonnes (MT), while the total food grain production exceeded 236 lakh MT. The state is also continuously 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 income. Agricultural experts say profits from crops can quickly disappear when farmers are forced to make distress sales due to inadequate storage facilities.
View inside the Telangana State Warehousing Corporation facility at Allapur village in Tupram mandal of Medak district. | Photo Courtesy: Nagara Gopal
Recognizing this growing gap, the government has set an ambitious target of creating additional 50 lakh metric tonnes of storage capacity and 50 lakh tonnes of cold storage capacity across the state. At the center of this effort is the Telangana State Warehousing Corporation (TGSWC), which was set up after the bifurcation of Andhra Pradesh in 2015 and is moving beyond its traditional role of food grain storage to build an extensive network of warehouses, cold storage facilities and logistics infrastructure.
According to TGSWC Chairman Rayala Nageswara Rao, the corporation’s warehouses have been operating at almost full capacity for the last three years, reflecting both the increasing procurement volume 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 said.
At present, TGSWC manages about 38 lakh metric tonnes of storage capacity through a combination of its warehouses and other facilities spread across the state. Officials say this is the highest capacity achieved by the corporation, surpassing the levels recorded before and after the formation of Telangana.
But occupancy levels approaching 100% have also exposed the limitations of the existing infrastructure.
To bridge the gap, TGSWC has undertaken a major expansion programme. Warehouses with a combined capacity of 4.53 lakh metric tonnes are under construction at 38 locations, while tenders have been invited for additional capacity of 1.35 lakh metric tonnes at 11 locations.
“We are planning to increase the storage capacity from about 5 lakh metric tonnes to 15 lakh metric tonnes, the projects are currently in various stages of execution. Among them, we are expecting warehouses with a storage capacity of 3-4 lakh metric tonnes by the end of this year, while sites for 21 more warehouses have been identified in the state,” explains Rao.
However, for farmers growing perishable crops, traditional warehouses are only part of the solution. Chillies, turmeric, fruits and vegetables require special storage facilities that can preserve the quality and allow farmers to better schedule their sales. Recognizing 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.
The facility, being developed at an estimated cost of ₹15 crore, is designed to store fruits, vegetables and other perishable items while reducing dependence on private operators, says Rao. Agriculture and Marketing Minister Tummala Nageswara Rao, who is from Khammam district, is keen on expanding warehouse and cold storage units.
For producers in the region, the project offers hope of lower storage costs and better bargaining power. “Given the high fees collected by private cold storage units, setting up a cold storage unit under government management is very good news for chilli farmers like me,” says Daravath Anand, a young tribal farmer from Khammam.
Khammam and the erstwhile Warangal district are the center of the chilli economy of Telangana and are known for GI-tagged chapata chilli (tomato chilli).
Farmer organizations say that additional facilities are needed in these areas to meet the demand. Somidi Srinivas, state convenor of Telangana Rythu Sangam, says, “Although Warangal has many private cold storage units, farmers often face problems regarding storage charges and loss of produce. The government should also consider mini cold storage units for vegetables.”
Officials say land has already been identified for future cold storage projects in Kesamudram and Nizamabad in Mahabubabad district (erstwhile Warangal district), where a dedicated turmeric storage facility has been proposed.
The increasing demand for cold chain facilities is also being felt in emerging sectors like date palm cultivation. Farmers have repeatedly demanded dedicated cold storage, warehousing, processing and marketing infrastructure to support the expanding industry.
Modernization and Security
As the network expands, TGSWC is also upgrading the way it manages warehouses. Security systems equipped with CCTV cameras have been installed in all the facilities and linked to a central monitoring system in Hyderabad.
TGSWC Managing Director K. Lakshmi says the technology allows officials to monitor stock and warehouse operations more effectively while improving accountability and transparency.
Telangana State Warehousing Corporation Chairman Rayala Nageswara Rao demonstrated the central monitoring system in Hyderabad that tracks warehouse operations and stock levels across the state. | Photo Courtesy: Nagara Gopal
The corporation’s ambitions have now extended beyond storage of agricultural produce. Driven by the rapid growth of e-commerce, logistics and manufacturing, TGSWC is exploring new business opportunities. A major warehousing project has been proposed near Moula Ali Railway Station in Hyderabad to cater to the needs of leading e-commerce and logistics companies. The state government has approved the proposal and allotted 23 acres of land to Telangana Agros for the facility.
“We are also setting up a 1.68 lakh sq ft warehouse facility for e-commerce firms at Karkalpahad in Kadthal on the outskirts of the city,” says an official.
The plans of the Warehousing Corporation are in line with the state government’s broader objective of developing an integrated, technology-driven logistics ecosystem under the Telangana Rising 2047 Roadmap.
The proposed strategy includes a state-level integrated logistics master plan, a new logistics policy 2.0, multimodal logistics parks, inland container depots and a network of warehouses and micro-logistics hubs across urban and rural Telangana.
Time is important. According to Knight Frank India’s India Industrial and Warehousing Market Report for the first quarter of 2026, Hyderabad recorded warehousing transactions of 1.1 million sq ft between January and March, reflecting sustained demand from logistics, manufacturing and allied sectors.
Concerns over access and policy
Farmer organizations welcome the expansion but argue that the benefits of storage infrastructure do not always reach small and marginal farmers.
“Most farmers are unable to access warehouse facilities under various government agencies due to lack of awareness and transparency,” says Kanneganti Ravi, farm rights activist and founding member of Rythu Swarajya Vedika.
Ravi also demands dedicated cold storage facilities for potatoes, arguing that storage gaps affect many crops other than chilli.
The organization has called for decentralized storage systems through primary agricultural cooperatives, farmer producer organizations and state storage corporations while retaining government control over procurement and quality assessment mechanisms. It argues that excessive concentration of storage infrastructure in the hands of a few private operators may increase dependence on corporates for grain storage and logistics.
The challenge for Telangana is no longer limited to increasing production. It has already demonstrated its ability to grow more food. The next test is whether it can help farmers earn more from their produce.
As the state looks to expand 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 issue is not measured in lakh metric tonnes or storage capacity. It’s about the freedom to keep the crop instead of taking it to market, and the freedom to ensure that one season’s hard work gets a fair return rather than another cycle of debt.
