India has developed an enviable capacity in cold storage. According to a 2014 report by the International Association of Refrigerated Warehouses (IARW) the refrigerated warehouse capacity worldwide was an estimated 552 million cubic metres of space. India held the largest capacity with 131 million cubic metres in cold stores, followed by the US at 115 million cubic metres and China at 76 million cubic metres. Between May 2014 and July 2015, Indian entrepreneurs added another 200 units, a bit more than a million tonnes in size.
Every kilo [of produce] damaged or lost, has a multiplier effect on the related loss to input resources, thereby affecting the country's economic agenda.
Though an estimated 5% of facilities have become obsolete over the years, India has created almost 7200 large cold stores, equivalent to 33 million tonnes in holding size, most of these in the past decade. These refrigerated stores are mainly located in producing areas, focused on cross-seasonal bulk holding of fresh produce. This development helped crops like potatoes and apples, with single season harvest, to be traded all across the year. A major success story is the case of potatoes, which though native to Peru, have become a staple food item in India. With dried chillies too, opportunity to trade across seasons opened up with cold-stores extending their holding life.
India's current capacity in cold stores is also used to service market demand for the "cannot-do-without" frozen segment like ice-creams and some processed products. These products cannot exist without sub-zero storage, transport or deep freeze cabinets at points of sales.
However, there is another set of farm produce that markets increasingly demand, the "must-do" segment of fresh fruits, vegetables and floriculture. In these crops, the highest damage incurs in their transit to markets from farms. Every kilo damaged or lost, has a multiplier effect on the related loss to input resources, thereby affecting the country's economic agenda.
Today, it is estimated that horticulture alone contributes to almost 30% of the total agricultural GDP (a remarkable feat considering that only about 15% of cultivated land is under horticulture). Each percent of produce saved can only add to our overall economic development. Horticulture crops can, and do, manage without the cold-chain if consumers stay close to production sites. Yet, these are emphasised as a "must-do" segment, since without recourse to appropriate cold-chain, they cannot be delivered over long distances in fresh form. This segment does not require frozen spaces but is handled at plus-zero temperatures... the living, breathing range.
Horticulture is dominated by small and marginal farmers and expanding their market reach has a great significance. Being under-serviced by the cold-chain, today their market access remains limited. For the economic inclusion of small farmers and to fulfil domestic demand shifts for high nutritional value foods, a different format of cold chain development is needed.
Yet, despite the largest capacity in cold storage, where does our cold-chain fail our fresh produce supply system?
For starters, the concept of cold-chain needs to be understood properly, at the conceptual level. For too long has "cold-chain" been held synonymous with cold stores. Just because we have had success with long term storage of potatoes and dried chillies, one cannot assume the same mechanisms will hold true in case of other fresh produce. A tomato, spinach, okra, mango, papaya or banana will not remain edible across months, like say potato can. These food types, in the cold-chain, manage to garner a partial life extension, buying time of a couple of weeks or so only. These food items will still quickly perish. In most such cases, much like is successfully demonstrated with milk, the cold-chain systems needed are those that serve as speedy conduits to markets.
Illustration by the author
A more dynamic, time sensitive and market linked, approach to cold-chain development is the need of the hour. The partial time gained with cooling and other scientific handling, needs to be prioritised to transport the produce across distances, to consumers. To create effective bridges between farms and consumers, we require the creation of more farm-gate pack-houses (at the back-end), reefer transport (links) and distribution hubs. Such a chain of infrastructure components will help to set up meaningful and smart supply chains, and add relevance to Indian agriculture.
Keeping in mind that India's agricultural mainstay is rapidly moving towards high value produce (fruits, vegetables and livestock), cold-chain logistics is directly linked to the second green revolution.
The alternative would be to process all our fresh produce into canned, frozen or preservative-based products. However many countries like Brazil and India, are increasingly recommending fresh food diets to their citizens and demand for fresh whole produce continues to grow. Consumer preference for preserved mangoes, spinach, okra or apples is unlikely to exceed that for the fresh form.
Keeping in mind that India's agricultural mainstay is rapidly moving towards high value produce (fruits, vegetables and livestock), cold-chain logistics is directly linked to the second green revolution. Policy makers have put in place appropriate support mechanisms to develop the missing links in cold-chain and thereby realise a hitherto untapped potential.
In the 2015 budget, preconditioning of fresh produce has been exempt from service tax, as also for transport and storage. This preconditioning (sorting, packing, precooling, etc.) activity is undertaken at modern pack-houses and is critical to initiating the flow of fresh farm produce to distant markets. Various infrastructure pieces are provided subsidies, including modern pack-houses with pre-coolers, reefer transport, etc. The erstwhile subsidy for cold stores has been rationalised and minimum system standards have been developed to help the users. Besides the fiscal and financial support, India opened foreign direct investment up to 100% in cold-chain logistics, through the automatic route. A low-interest credit window for private entrepreneurs was also opened. All this is for the avail of promoters for facilitating developing all components that comprise cold-chain logistics.
The only technology that can deliver farm-fresh foods across our Subcontinental distances is cold-chain. Our capacity to feed our growing numbers is a serious and increasing concern. Whereas demand for other consumer goods will see deviations for a multitude of reasons, demand for food is eternal. India will remain the largest concentration of vegetarians in the foreseeable future. Further, growing affluence has revealed India's preference for spending more on fresh produce (fruits and vegetables), with demand for meats, fish and milk added. Therefore, the need to develop modern cold chains, remains greater in India than elsewhere.
Recognising the current and future importance of the cold chain, the government has laid the grounds and an enabling environment for more relevant development in cold-chains. With ever growing consumer demand, increasing purchasing parity and lowered cost for technology induction, India's cold-chain is poised to scale up momentously.
The only technology that can deliver farm-fresh foods across our Subcontinental distances is cold-chain.
These initiatives now require to be met by the private sector, with equal cognisance of the opportunity and the prospect to create legacies.
One can visualise our rural landscape dotted with pack-houses, crisscrossed with transport linkages, knitting India's landscape to bridge urban with rural. Cold-chain will do all this... pioneer the revitalising of our agriculture, and make India the food basket of the world.
Cold-chain is key to drive gainful farm productivity, sustainable agriculture and the coming of the second green revolution.
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