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

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

The 47-year-old sold his entire produce soon after harvest, using the proceeds to clear mounting debts rather than invest in storage and wait for prices to improve.

“Normally, we transport our chilli produce to private cold storage units near the Enumamula agricultural market yard in Warangal, nearly 120 kilometres from our village. But this year, we were forced to sell immediately after harvest. Transport and storage costs are high, and when prices do not improve, farmers end up bearing the burden,” he explains.

Srinivas’ story reflects a larger challenge confronting chilli farmers across Telangana’s Godavari belt. In villages where chilli occupies nearly 70% of the cultivated area, farmers often find themselves trapped between low market prices and the high cost of preserving their produce. The nearest cold storage facilities are mostly located hours away, forcing growers to spend additional money on transport and storage at a time when they are already under financial strain. When prices fail to recover, the cost of waiting can become another burden. Many farmers are left with little choice but to sell immediately, even when market conditions are unfavourable.

A government-run cold storage facility closer to home, Srinivas believes, could make the difference between a profitable season and another year of losses. The proposed government 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.

Rising output, strained storage

For Telangana, the issue extends beyond chilli farmers and cold storage alone. What is at stake is the State’s ability to support a rapidly changing agricultural economy, one that is producing more foodgrains and horticultural crops than ever before.

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

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

Recognising this growing gap, the government has set an ambitious target of creating an additional 50 lakh MT of warehousing capacity and 50 lakh tonnes of cold storage capacity across the State. At the centre of this effort is the Telangana State Warehousing Corporation (TGSWC), which was established in 2015 post bifurcation of Andhra Pradesh and is expanding beyond its traditional role of storing foodgrains to build a wider network of warehouses, cold storage facilities and logistics infrastructure.

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

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

Currently, TGSWC manages about 38 lakh MT of storage capacity through a combination of its own warehouses and other facilities spread across the State. Officials say this is the highest capacity achieved by the corporation, surpassing levels recorded both before and after the formation of Telangana.

But occupancy levels approaching 100% have also exposed the limits of existing infrastructure.

To bridge the gap, TGSWC has launched a major expansion programme. Warehouses with a combined capacity of 4.53 lakh MT are under construction at 38 locations while tenders have been invited for an additional 1.35 lakh MT of capacity at 11 locations.

“We plan to increase the storage capacity from about 5 lakh metric tonnes to 15 lakh MT, with projects currently at various stages of execution. Of those, we are expecting godowns with a storage capacity of 3-4 lakh MT by this year-end while sites have been identified for 21 more godowns in the State,” explains Rao.

For farmers growing perishable crops, however, conventional warehouses are only part of the solution. Chilli, turmeric, fruits and vegetables require specialised storage facilities that can preserve quality and allow farmers to time their sales better. Recognising 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 become operational within the next few months.

Being developed at an estimated cost of ₹15 crore, the facility has been designed to store fruits, vegetables and other perishables while reducing dependence on private operators, Rao says. Agriculture and Marketing Minister Tummala Nageswara Rao, who hails from Khammam district, is keen on expansion of the godown and cold storage units.

For growers in the region, the project offers hope of lower storage costs and better bargaining power. “Setting up a cold storage unit under government management is great news for chilli farmers like me, considering the high fees collected by private cold storage units,” says Daravath Anand, a young tribal farmer from Khammam.

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

Farmer organisations say additional facilities are needed in these regions to meet demand. “Though there are several private cold storage units near Warangal, farmers frequently face issues over storage charges and the damage to produce. The government should also consider mini cold storage units for vegetables,” says Somidi Srinivas, State convenor of Telangana Rythu Sangam.

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

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

Modernisation and security

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

TGSWC managing director K. Lakshmi says the technology allows officials to monitor stocks and warehouse operations more effectively while improving accountability and transparency.

The corporation’s ambitions now extend beyond storing 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 leading e-commerce and logistics companies. The State government has approved the proposal and allocated 23 acres belonging to Telangana Agros for the facility.

“We are also setting up a godown facility across 1.68 lakh sq.ft. for e-commerce firms at Karkalpahad in Kadthal on the city outskirts,” an official says.

The warehousing corporation’s plans align 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.

The timing is significant. 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 organisations welcome the expansion but argue that the benefits of warehousing infrastructure do not always reach small and marginal farmers.

“The majority of farmers are unable to access godown facilities under different government agencies due to lack of awareness and transparency,” says Kanneganti Ravi, farm rights activist and founding member of Rythu Swarajya Vedika.

Ravi also calls for dedicated cold storage facilities for potatoes, arguing that storage gaps affect multiple crops beyond chilli.

The organisation has sought decentralised storage systems through Primary Agricultural Cooperative Societies, Farmer Producer Organisations and State Warehousing 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 could increase dependence on corporates for grain storage and logistics.

For Telangana, the challenge 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 what they grow.

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

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