February 20, 2020
Nearly 15-16 per cent of India’s fruit and vegetable output go waste due to lack of proper post-harvesting facilities, as per domain expert ICAR-CIPHET
Currently, there is a gap of 3.2 million metric tonnes in cold storage capacity, which includes a shortage of 70,000 packhouses and 52,000 refrigerated vans
The cold chain industry in India is expected to grow at a buoyant rate of 13-15 per cent and reach a total valuation of over US$6.6 billion by 2022
As many as 109 projects out of the 298 government-approved cold chain projects worth more than US$1.14 billion are already operating in the country
Last month, fresh green chilies from Varanasi in the northern state of Uttar Pradesh were exported by sea to Jebel Ali in Dubai, over a span of nine days. This was largely facilitated by a temperature-controlled, or cold chain, technology combined with constant tracking solution offered by Danish global integrated logistics company, Maersk. The company had teamed up with a Government of India enterprise, the Agricultural and Processed Foods Exports Development (APEDA) responsible for encouraging agri-exports in the country, to facilitate this shipment. This consignment turned out to be a path-breaker since it laid the model to “unlock the agro-export potential in five fresh fruit and vegetable producing Varanasi districts with a cold chain solution,” said Maersk.
In another instance, in 2018, the first consignment of Indian bananas was exported to Europe by ship, which had marked a new era in India, where every third banana on the planet is produced. The cold chain has been the game-changer in this case too after Denmark based Danfoss joined the Confederation of Indian Industry (CII) to set up a task- force to educate farmers from Tamil Nadu, where 30 per cent of India’s bananas are produced. Danfoss, which has a cold capacity of 38 million tonnes, taught the farmers on new technologies, post-harvesting techniques and the importance of cold chain infrastructure and refrigerated containers.
Today, Tamil Nadu banana farmers have ramped up their productivity and brought down wastage by nearly 20 per cent, besides gaining the confidence to export anywhere in the world.
Many global cooling and logistics companies are stepping up their operations in the cold chain sector in India eyeing the huge potential in a large-sized agriculture driven country, which also happens to be the world’s second-largest producer of grains, vegetables, and fruits. The country’s vast production base, which includes meat, seafood, exotic fruit, and vegetable varieties has a sizable agro-export market as well, with India exporting fruits and vegetables worth US$1.4 billion (2018-19; Source: APEDA). And, no doubt the growth of agro-exports in the country is dependent on a strong, integrated cold chain system.
The demand for an integrated cold chain infrastructure is rising in a rapidly growing economy like India. Nearly 15-16 per cent of the country’s fruit and vegetable production go waste due to lack of post-harvesting facilities, reports the Central Institute of Post-Harvest Engineering and Technology.
Recognising the need for a robust and integrated cold chain grid, the Indian government has been ramping up efforts to boost the sector with a slew of incentives and policies. Significantly, big Indian corporate houses too are venturing into the cold chain industry, for example, recently Adani Ports and SEZ Ltd, has acquired a controlling stake in a leading domestic cold chain player, the Bengaluru-based Snowman Logistics Ltd.
Cold chain facilities in India have always developed on a need basis without much know-how and resources, say industry experts. The few key organised players in the sector are Snowman Logistics, Gati Kausar, ColdEx, ColdStar Logistics, Fresh and Healthy Enterprise Ltd (a subsidiary of the government-owned Container Corporation of India or CONCOR), etc, with cold storage being developed majorly for bulk products like onions and potatoes.
Nearly 68 per cent of the existing cold storage capacity is used only for storing potato, while the rest 30 per cent is cornered by other commodities such as meat and poultry, seafood, dairy products, fruits and vegetables, and pharmaceuticals. These facilities are largely located in UP, West Bengal, Punjab, and Gujarat.
Currently, there are 7,645 cold storages in the country with entire capacity pegged at 34 million metric tonnes, according to 2017 official statistics. But, a report by the National Centre for Cold Chain Development (NCCD), a body under the Department of Agriculture, Government of India highlighted a gap of 3.2 million metric tonnes in cold storage capacity, which includes a shortage of 70,000 packhouses and 52,000 reefers or refrigerated vans.
This entire farm-gate infrastructure, particularly pack-houses consisting of a pre-cooler and dispatch rooms, which are used to prepare and pre-condition the fresh farm produce, are key to connecting the farmer to the distribution network. Today, the government and private sector realise that there is a huge need to build an efficient cold chain grid addressing “end-to-end” connectivity from farm-gate to consumer, say, industry experts.
Stressing the need for investments in this sector, global analytical company CRISIL says in a report that they expect nearly US$2.96 billion investments in this sector from 2019-2022. Cold storages will either be set up or upgraded to optimise the domestic post-harvest value chain. Further, the report states that the cold chain sector is expected to grow at a buoyant rate of 13-15 per cent and reach US$6.65 billion in 2022 in India, mainly driven by rising demand for processed food, fresh fruits and vegetables and bio-pharmaceuticals in export markets.
Moreover, the growth of organized retail, which requires a large variety of fresh fruits and vegetables, meat and poultry products and other temperature-sensitive commodities relying on cold chain storage and transportation have catapulted this sector on a fast track.
In the recent Union Budget 2020-21, to boost farmers’ income and critical cold chain infrastructure in the country, the Minister of Finance Nirmala Sitharaman announced that the government will set up a Kisan Rail through a public-private partnership to build a seamless national cold supply chain for perishables, inclusive of milk, meat, and fish. Already, the Indian Railways has specially designed refrigerated parcel vans, 98 reefers (ventilated insulated) rail containers for movements of fruits and vegetables in the country, and a few cold storage facilities for perishables established by CONCOR, a public sector undertaking under the Ministry of Railways.
One of the key government schemes has been the Ministry of Food Processing’s Scheme for Integrated Cold Chain and Value Addition Infrastructure, which offers subsidy at 50% of the project cost with a cap of US$1.4 million. This project, operating since 2008, has made progress with 109 projects out of 298 government approved cold chain projects worth over US$1.14 billion are already operating in the country. These schemes encourage the creation of cold storages, primary processing and transportation facilities across the country.
Around US$209.71 million has already been released as a grant for the projects, which include the establishment of pre-cooling, sorting, grading facilities at farm level, packing facility, blast freezing in the distribution hub and procuring reefer vans, mobile cooling units, etc.
Other government measures such as assistance from the Mission for Integrated Development of Horticulture (MIDH) for development of cold storages, ripening chamber, pack houses, reefer vehicles to farmers; promoting scientific storage facilities for farmers; policies in the form of subsidies, tax benefits and technical training are adding momentum to the evolution and management of a cold supply chain in India.
As cold chain technology gets modernised and innovative, a number of startups like Ninjacart, Cloudtrack and Crofarm too are emerging on this landscape to solve the challenges faced by this sector. With technological advancements, there is a rising demand for real-time temperature monitoring and location tracking. Startups like Cloudtrack have developed software for real-time monitoring of the temperature of products in transit. This software sends alerts when the temperature changes contrary to pre-set thresholds and provide real-time tracking of the entire fleet. The industry body, NASSCOM states that 50 per cent of India’s booming agri-tech industry is focussed on creating supply chain efficiency solutions.
Other efforts to introduce new tech in this sector include CONCOR’s partnership with Japan-based “Innovation Thru Energy™ ” (ITE), to introduce IceBattery™—a passive cold chain technology—to Indian markets. While, a report by the University of Birmingham and Shakti Sustainable Energy Foundation and MP Ensystems, has recommended the usage of mobile apps and data analysis to manage harvesting and logistics to reduce food wastage between farm gate and supermarket shelf, whilst boosting farmers’ incomes and lowering the environmental impact of food cooling. Undeniably, the cold chain sector in India is heating up and has moved on to fast-track mode.