An end-to-end cold storage system is what India needs
4 min read . Updated: 06 Mar 2023, 11:24 PM IST
PremiumSet up facilities at the farm-gate level and link them with other systems to cut waste and boost farm earnings.
India is the largest producer of fruits and the second largest producer of vegetables in the world. Despite that, the per capita availability of fruits and vegetables is low because of post-harvest losses. We can trace most problems relating to the marketing of fruits and vegetables to their perishability. Besides, the quality of a sizable quantity of produce also deteriorates by the time it reaches the retail consumer.
According to the 2018 report of the high-level Dalwai Committee, the proportion of produce that farmers cannot sell in the market is 34% for fruits and about 44.6% for vegetables. India’s post-harvest losses amount to nearly 40% of GDP, costing farmers an annual loss of ₹92,651 crore. These are incurred after harvesting but before final consumption and stem from lack of infrastructure across the entire chain from the farm-gate till the market (wholesale and retail traders), limited technical know-how on good agricultural practices, imperfect market knowledge and inadequate market access. Another major factor that worsens these losses is the fragmentation of agricultural landholdings into smaller parcels, with the elaborate post-harvest value chain less accessible to large numbers. As per the Dalwai panel, a combined investment of ₹89,375 crore—a figure marginally lower than annual post-harvest losses—is all it would take to improve the state of storage and transportation facilities for food crops in India.
Cold storage crisis: An implicit consequence of our storage problem is that there is a shortage of fruits and vegetables once the vegetable-growing season is over. If the vegetables wasted could have been stored, then it could have sorted out this shortage, thus helping ease inflationary problems. In its absence, seasonal inflation gets aggravated. The highest share in the consumer price index is of food, at 39.06%, and within that, vegetables contribute 33.3%.
Present infrastructure: Currently, India has about 7,129 cold storage facilities with about 32 million metric tonnes capacity and about 10,000 actively refrigerated vehicles, most of which are operated by small cold storage and/or transport service providers. According to a report by Crisil Research in 2019, 95% of cold storage capacity is owned by the private sector, 3% by cooperatives and the remaining 2% by public sector undertakings; 33% of the total cold storage capacity of our country is in Uttar Pradesh (mostly for potatoes). However, that capacity is very low in some other states, as per data from the National Horticulture Board for 2019.
Thus, it is a highly fragmented industry where critical data about the technology used and capacity installed is not available or is of poor quality. This cold storage infrastructure is also poorly distributed, with urban areas getting easier access to these spaces, thanks to their market proximity.
There is, however, no data available on the extent of cold storage availability at the farm-gate level in rural agricultural markets and in terminal markets at the city level. Because of this lack of shared information, there is little scope for the consolidation of services offered and integration of activities into an effective cold chain that spans all nodes from farm-gates to consumer markets.
When 86 % of Indian farmers are classified as small and marginal in the country, it is too optimistic to expect that they would install farm-gate cold storage facilities. When 95% of the cold storage is owned by the private sector, it implies that most of these act at the aggregated level in the value chain, nearer the cities. The tragedy is that most of the waste occurs before the produce reaches our city markets. And this is the area completely left neglected by the government in the absence of any 100% central sector schemes. Leaving the creation of farm-gate cold-storage systems to the private sector has been a non-starter.
Way forward: It is essential that we adopt a cost-effective and localized model of farm-gate storage involving cold rooms and small cold-chain reefer vans to create such storage facilities in rural parts of the country and also to layer the cold-storage systems available in semi-urban and urban areas where terminal wholesale markets are located. These cold rooms, preferably run on solar power and suitably adapted to cost considerations for small and marginal farmers, would function as small localized storage points for local horticultural farmers. The fresh produce stored in these farm-gate level cold rooms can then be sent to the final marketplace through a network of small cold-chain reefer vans. This type of mechanism can be established in each district under the aegis of state agricultural marketing boards and the Warehousing Development and Regulatory Authority. Good use also needs to be made of real-time data on availability, capacity utilization, costs, etc, which the government currently does not maintain centrally for farmers and traders. Lack of real-time monitoring of the country’s cold storage infrastructure makes it less useful for farmers and traders both and leads to avoidable wastage.
In conclusion, it is important to create end-to-end cold-chain infrastructure (from farm-gate to terminal markets) that will not only address supply-side shortages arising from wastage, but also provide enhanced income opportunities to farmers by reducing their post-harvest loss burden. Further, at the national level, it could mitigate variations in seasonal inflation attributable to fruits and vegetables during off-season.
These are the author’s personal views.
Amar Patnaik is a member of the Rajya Sabha from Odisha, a former CAG bureaucrat and an advocate.