Fresh produce losses (25 – 35%) is hard to comprehend in a country where 80% of the population have a hard time organizing 4 meals a day – These perishable product losses translates into annual  monetary losses of  more than Rs. 50,000 crores. While 40% of these post-produce losses happen between the farmer’s fields and till the time the produce is packed. The remaining 60%  perishes during transportation. What this translates into is that a greater percentage of Indian fresh produce ends up as “food for rats and roaches” than for Indians.

India leads the world in the production of the following major fruits and vegetables:

• MANGO: 21 %
• BANANA: 36 %
• CITRUS FRUITS: 12%
• POTATO: 27%
• ONION: 12%
• TOMATO & BRINJAL: 8%
• TAPIOCA: 7%

 

Image credit: jdinfratechlimited.com

Are we equipped to store and transport the ‘precious perishable products’ that contributes in such great measure to India’s economic resurgence and independence in the 21st century?

 

Indian cold storage landscape: Cold to the Indian needs

The horticultural production share of India in the global market is:

[1] 11% of the world’s vegetables:  ONLY 3-4 %  OF THE GLOBAL VEGETABLE TRADE

[2] 15% of the global fruit production: ONLY 10%  OF THE GLOBAL FRESH FRUITS

 

In 2008:

[1] Indian Fresh Vegetable exports: $369 million [ GLOBAL EXPORT VALUE = $37, 743 MILLIONS]

[1] Indian Fresh Fruit exports: $202 million [GLOBAL EXPORT VALUE = $60,309 MILLIONS]

Horticulture contributes almost 30% of the national agricultural GDP with approximately 6 million hectares under fruit (= 66 million tonnes of fruits) and 8 million hectares under vegetables (= 129 million tonnes of vegetables) – making it the second largest fruit and vegetable producer in the world.

 

 

TO PRESERVE AND TRANSPORT THIS NATIONAL PRODUCE, INDIA HAS ONLY ABOUT 5500 ARCHAIC COLD STORAGE FACILITIES – WHICH CAN HANDLE ONLY 22 MILLION TONNES OF FRESH PRODUCE AT BEST.

Sustained media campaign against the apathy of presiding ministers and the responsible office holders has seen some traction in the area of cold storage development. A government initiative has installed a task force for the creation of cold-storage-chain development at an impressive investment of Rs. 8150 crore. This task force is expected to establish additional 9-10 million tonnes of storage / pack-houses/ripening chamber by 2012. Considering the scarcity of space in Indian nodal towns and cities, micro cold storage facilities with a capacity of 5-7  tonnes is also a practical option.

The proposal for a ‘National Green Grid’ is also under the anvil  for the creation of an end-to-end national transport network.

 

National Fresh Produce transportation: Rooms for improvement

The farm-to-market journey experiences a heavy loss of time and GDP for the Indian subcontinent. The entire chain requires an optimally managed chain of cold storage facilities all along the national transportation corridor. According to the reports, almost 100 tonnes out of 104 million tonnes of perishable produce are transported in a non-reefer mode – shortening their lifespan and increasing the rejection probability. During the 11th Plan…

• A bank of 1,000 refrigerated containers with 100 mobile pre-cooler vans operating on a pay-to-use model were proposed
•  This proposal also recommended the launch of 40,000 refrigerated push-carts for street vendors
• Indian nurseries are still using the hooked on to the old technology. They should adopt modern horticultural practices like greenhouses, mist propagation units, mist irrigation system, modern agricultural machinery, green energy technologies and self-sustaining farm systems

 It is high time that we take concrete and monitored steps towards creating a scientific and intelligent National Green Grid – a pan-India grid of cold storage facilities that helps the growers transport and preserve the ‘fruits of their labor’.

 

Indian Cold storage Grids: Entrepreneurial challenges

In the perishable cold storage business, it is all about volume as the storage need in most cases is very short – which pumps up the price charged per square feet. For entrepreneurs, cash inflow is extremely important and the known roadblocks in the cold storage segment are the high infrastructural capital that is required – in addition to the longer gestation period for the business to bear fruit. The capital investment for launching a cold storage business could run from several hundred crores to thousand of crores. This creates a large ‘barrier for entry’ for small and medium entrepreneurs – especially for building big capacities. Typical gestation period for moderate capacity cold storage enterprise could range from 4 to 6 years.

Technology is tightly coupled with the smooth operation of a well-oiled cold storage.  “The Indian cold chain industry is not mature when compared to emerging destinations,” says Keith Sunderlal, Director of South Asia, International Association of Refrigerated Warehouses. The business dynamics of the cold storage business gives the feeling that only big pocket business houses can set foot, but there have been numerous success stories of small and medium entrepreneurs making a mark in the niche segments.

Indian economy not only needs world-class transportation network, but also requires an interconnected grid of cold-storage chains along the route. Its a win-win situation for entrepreneurs as well as producers.