There is an immediate need to protect Indian farmers. Without doubling the sales of agricultural produce, it is extremely difficult to increase a farmer’s income. Proper cold storage chains can help. Unlike the 1970s and 1980s, when India used to import food grains to feed its population, there has been a significant stride in production of cereals, fruits and vegetables. Yet, a very large section of Indians are malnourished as million tonnes of food are wasted every day.
A report by the Institution of Mechanical Engineers (IME), a professional organisation of the UK, states, “India has around 6,300 cold storage facilities, with a capacity of 30.11 million tonnes. However, some 75-80% of these refrigerated warehouses are suitable only to store potatoes, a commodity that produces only 20% of agricultural revenue.” Based on the report, the organisation had even emphasised the need for expansion of cold storage infrastructure in an affordable, reliable and sustainable way to increase the contribution of agriculture to the economy.
Cold storage industry
A 2015 Top Markets Report on cold chain by the International Trade Administration (ITA) reveals that India is one of the world’s largest consumers of food and the third largest producer of agriculture. The food processing sector of India constitutes both packed produces like fruits and vegetables, milk, and others and constitutes about 62% in value and agricultural or horticulture produce like fresh fruits and vegetables, jellies, jam and juice constituting about 38% share in the total food produced.
According to the Indian Brand Equity Foundation (IBEF), the food processing industry accounts for 32% of India’s total food industry and 13% of Indian exports. The industry ranks fifth in terms of exports, production and consumption. Whereas the food processing industry looks promising for India, it must be considered that the local markets or farmers often have to rely on inefficient supply chain or middlemen. The farmers, at times, do not have the requisite infrastructure, technical know-how or capital investment to channelise into cold storage and supply chain development.
An integrated logistics support and cold storage solution is the need of the hour owing to the fragmented infrastructure of cold warehouse, transportation and other associated services. This will enable easy accessibility of produce from farms to table, and extend the life cycle of perishable products as well. According to industry experts, about 40% of our produce is wasted due to inadequate cold chain infrastructure.
Need for cold storage in India
The demand for the processed food industry has led to the need of cold storage chains in India. IME pointed out the increased need of storage capacity by 40%, as only 10-11% of fruits and vegetables produced in India uses cold storage.
The organisation also pointed out that India’s investment in cold chain is projected to be $15 billion over the next five years. While approximately 60% of the total numbers of facilities are located only in Uttar Pradesh, Gujarat, West Bengal, and Punjab, only four million of the 104 million tonnes of fresh produce is transported through a cold chain.
“There is more wastage of fruits and vegetables in the southern and western region of India due to the tropical and humid climate,” IME said.
However, ensuring food security to every individual is imperative as India’s 6300 cold storage facilities are unevenly spread across the country, with an installed capacity of 30.11 million metric tonnes. These are mostly used for storing potatoes. More than 50% of the cold storage facilities in India are currently concentrated in Uttar Pradesh and West Bengal.
A robust cold chain supply system can increase farmers’ income manifold. According to Pawanexh Kohli, Chief Executive Officer and Chief Advisor, National Centre for Cold Chain Development, “India’s greatest need is for an effective cold chain solution that will integrate the supply chains for agricultural commodities from their respective production centres to consumption centres, thereby reducing physical waste and loss of value of perishable commodities.”
According to Tim Fox, Head of Energy and Environment at the IME, establishment of supply chains required prioritisation of investment in affordable, reliable and sustainable cold chain infrastructure. “This includes combining renewable energy with innovative technologies for producing both power and cooling, such as for example cryogenic energy storage using liquid air or nitrogen,” he added.
Patit Paban De, President of the Association Chairman of West Bengal Cold Storage, said, “Cold storage is important in development of agriculture, especially for potato and other factors like labours, farmers, traders etc. “
“In the current year, the production of potato was huge throughout the country which severely impacted the market and despite of all efforts made by the stakeholders and the government, entire stock held in store units could not be released even after extending the storage period”, Patit Paban De further added.
To keep pace with the market, modern cold chains need to enabled to use climate control technology and modern packaging and handling, from the time of harvesting of the produce to the point of sale. The controlled climate environment reduces the rate of metabolism in harvested fruits and vegetables and extends the shelf life of the produce. Any break in the environment across the chain accelerates the rate of decay. This facilitates the modern chains to perform directly from the farm. The produce is pre-cooled within an hour of harvest to suck out the farm heat from the produce and retard decay. Transportation is in reefer trucks, storage is in controlled climate warehouses, and retailing is through refrigerated shelves which works by reducing value loss and enhances the life of the produce.
Actions needed from the government
The Union Budget 2018-19 primarily focuses on the agricultural sector and therefore, one can expect that it would put an end to farmer distress. Finance Minister Arun Jaitley said, “In the year 2018-19, for the creation of livelihood and infrastructure in rural areas, the total amount to be spent by ministries will be `14.34 lakh crore from extra budgetary and non-budgetary resources.” This is likely to improve the cold storage industry as logistics, transportation and food safety are allied to this sector.
However, the sector still has its share of challenges. There is a lack of quality cold warehousing infrastructure with only 25% of the volume available for fruits, vegetables, processed foods and pharmaceuticals, whereas 75% of the capacity is dedicated to potatoes. Technical standards followed in India are mostly unsuitable for Indian conditions, which results in lower performance of standard refrigerated systems. Workers involved with modern chains are not untrained in handling temperature-sensitive products resulting in deterioration of product quality before reaching the consumer. High fuel cost and steady power supply are also required to push up the capital investment.
In west Bengal, in order to maintain eco-friendly environment and installation of solar power units for cold storage, the state government was requested to subsidise 15% of the related cost of such solar power installation and make recommendation for waiver of GST on such equippments.