The slip between the cup and the lip

India wastes one out of every six sacks of fruits and vegetables ever year due to a cold chain system that fulfils less than half the requirement. Investment of Rs 55,000 crore is needed to catch up, an industry report says.

Although report after report has pointed out how India wastes its produce whether it is foodgrains or cash crops the logistics and ware¡housing industry in India remains woefully inadequate and of poor quality. A new report on the world´s second largest producer of fruits and vegetables provides indicative figures of what wastages of fresh produce is costing us the data compiled by the company says the country loses tens of thousands of crore rupees every year because of lack of good cold storage facilities and refrigerated transport.

The Emerson food wastage and cold storage report (by Emerson Climate Technologies India, a business of the US-based manufacturing and technology company Emerson) cites studies that have pegged the value of fruits, vegetables and grains wastage in India at Rs 44,000 crore annually. Fruits and vegetables account for the largest portion of that wastage. Eighteen per cent of India´s fruit and vegetable production valued at Rs 13,300 crore is wasted annually, according to data from the Central Institute of Post-Harvest Engineering and Technology (CIPHET). Two of the biggest contributors to food losses are the lack of refrigerated transport and the lack of high quality cold storage facilities for food manufacturers and food sellers.

Without improvements to its ´cold chain´ infrastructure, from farm harvest to table, India´s food problems will remain vast and are likely to grow, warns the Emerson report.

Currently, India has 6,300 cold storage facilities unevenly spread across the country, with an installed capacity of 30.11 million tonne (mt). Studies have shown this is half the amount of cold storage facilities that India actually needs. Cold storage capacity for all food products in the country should be more than 61 mt. In order to reach that target, the report says an investment of more than Rs 55,000 crore is needed by 2015-2016 just to keep up with growing fruit and vegetable production levels.

´While progress is being made, this report confirms the cold storage situation is more acute than many realise,´ said Pradipta Sen, president of Emerson´s India, Middle East and Africa region.

While financial investment in cold storage facilities and refrigerated transport is vital, the Emerson Climate Technologies report also highlights additional challenges faced by India´s cold storage industry today.

The three biggest challenges are (1) high lifecycle costs for a cold storage facility that typically needs land and buildings to hold 6,000 mt of food; (2) uneven distribution of cold storage facilities with 60 percent of existing facilities located near the point of production in just four states and too few closer to distribution points in the other 24 states; and (3) low awareness of best storage practices amongst industry players. Other findings cited by the report are as follows:

• A cold storage facility with a capacity of 6,000 mt requires an initial investment of Rs 5 crore, excluding land costs. However, high real estate costs contribute significantly to the high lifecycle cost.
• Most cold storage facilities are located near the point of production, with food from the farm travelling longer distances to reach the facility and end consumer due to uneven distribution.
• Due to limited investment in cold chain technology there is limited awareness of best practices to operate it efficiently.

Recently, the Centre has made efforts to improve the cold chain infrastructure, including recognising cold chain as infrastructure, creating an additional budget to set up cold storages, collaborations with industry associations, growers, and cold chain equipment manufacturers, to set up the National Centre for Cold Chain Development (NCCD), and a mandate of 50 per cent of foreign direct investment (FDI) investment in multi-brand retail towards food infrastructure.

Article courtesy: Emerson Climate Technologies, which has opened its first Cold Chain and Distribution Centre in Chakan (Pune).