Around 104 million tonnes of perishable food is transported in India each year. Of this, only 4 million tonnes is transported by refrigerated trucks. The cold chain industry faces 85 percent deficiency in reefer vehicles. It incurs big loss of agricultural produce, making loss for farmers and increasing prices for the consumers. MOHD MUSTAQUIM analyses the need of reefer transport in India
Hundreds of kilograms of rotten tomatoes are thrown out of each Mandi (wholesale fruits and vegetables markets) every day, while due to the price rise, consumers tend to buy that staple crop at Rs 80 per kg these days. It creates problems from incurring losses to the farmers, pinching the pockets of consumers as well as big environmental loss as producing one kilogram tomato consumes 200-300 litres of the fresh water. These problems take place due to the poor post harvest management of agricultural produce.
For decades, there has been an impetus for creating cold storages for strengthening cold chain sector. Forgetting other infrastructures such as reefer vehicles, pack-houses and ripening centres, it was widely understood that cold storages are the one and only infrastructure that can be created to strengthen this sector.
It resulted in big missing link between the intra cold storages and the market as well as farm-gate. Having a capacity of 31.8 million metric tonne cold storages, there is only deficit of 10 percent as the current demand stands at 32.76 million metric tonnes. On the other hand, there is a big gap between demand and supply of reefer vehicles. According to a recent report, jointly released by the PHD Chamber of Commerce and Industry (PHCCI) and National Centre for Cold-chain Development (NCCD), currently there is a need of 61,826 reefer trucks while the industry has only 9,000. It shows 85 percent deficiency of reefer trucks in the country.
Therefore, the cold storage units lack connectivity with the farm-gate as well as with the market. It increases the operational cost and becomes the reason of wastage at farm-gate, further increases the prices of agricultural produce in the market during the lean season.
There has been lack of emphasis on creating reefer transport infrastructure in India. The comparison with international counterparts shows a big difference. France, which is reported to have 5 million metric tonnes of cold storage, runs about 140,000 reefer vehicles and the United Kingdom reportedly runs about 80,000. In India, the negligible reefer transportation for perishable food leads to wastage.
Highlighting the gap in the existing infrastructure and demand, Pawanexh Kohli, CEO & Chief Advisor, NCCD, says, “There has been major focus on establishing cold storages over the years while reefer vehicles, pack-houses and ripening chambers have been ignored. Though cold storage is the core of cold chain but lack of connectivity and other infrastructure, are weakening the entire value chain.”
Lack of reefer transport deters useful application of cold chain. The transport occurs in multiple legs, roaming between demand points. Perishable fruits and vegetables have a limited life span in normal conditions. However, unless the selling cycle falls within the natural period, cold chain intervention is required to increase the life span of the produce till they reach the hands of consumers.
Many times, in spite of a bumper harvest of a produce, this does not translate into smooth supply during non-harvesting periods leading to price rise and imports. As per the Task Force Report on Logistics by PHDCCI, approximately 104 million tonnes of perishable produce is transported in India each year. Of this, about 100 million tonnes moves through non-reefer mode and only 4 million tonnes is transported by reefers. Moreover, most of the refrigerated transport segment is fragmented with large number of small, unorganized and non-integrated private players focussing on select commodities or regions and even processors and the producers are increasingly outsourcing the logistics facilities rather than creating it as an integral part of the chain.
Expressing his views on the necessity of linkage, Krishan Jindal, Chief Executive Officer, NABARD Consultancy Services (NABCONS), says, “Though the cold storage is the mother of cold chain, but only setting up of the cold storage will not be viable without the other necessary infrastructures, mainly the linkage.”
In case of perishables, the reefer trucks require source handling points, which bring across the need to have pack-houses that prepare and precondition the goods for travel to the market. In this chain, whenever a buffer inventory is required, the cold stores are necessitated to secure seamless delivery of food. Overall, the operational processes and the supply chain will bring stability in supply, prices and reduce losses that are otherwise incurred. Additionally, every handling centre, especially the pack-houses, can have value addition in the form of food processing units, ensuring maximum gain from what is harvested.
Though the pack-houses and ripening chambers are the big constituents of the cold chain and provide big support to the reefer transportation, in the lack of reefer truck, there has been a lessor focus on these parts too. Explaining the current status of pack-houses and ripening centres, Kohli says, “We have only 249 modern pack-houses while require 70,080, a huge deficit of 99.6 percent. Similarly, the country has only 812 ripening chambers while there is a requirement of 9,131, a deficit of 91 percent.”
“The Government is providing right incentives and low interest finance to the industry to put a balance in the sector. Now, the industry will have to go hand in hand with the Government,” the NCCD official adds.
According to a survey conducted by National Horticulture Board in 2015, 1,219 cold stores are permanently closed and total number of functional cold stores is 5,367 amounting a total storage size of 26.85 million metric tonnes. The survey also indicates that 79 percent cold stores do not own any transportation facility and there are very few modern pack-houses to originate produce into cold chain.
Therefore, awareness among the various stakeholders of cold chain industry becomes crucial. Dr. Shailendra Kumar Yadav, Director - School of Agriculture, Indira Gandhi National Open University (IGNOU), says, “IGNOU can help by running awareness programmes for cold chain sector. We focus on creating better market linkage rather than setting up cold storages only. We also need to aware people that how such large infra like cold storage impacts the environment in its surroundings so that these elements can be kept in mind while its creation.”
Varied stakeholders promote cold chain sector. Thus, considering the gap in various infrastructures, the Department of Agriculture, Cooperation & Farmers Welfare, Government of India has recently announced a National Policy on Cold Chain. The new policy will provide underlying direction for the long term approach for holistic infrastructure creation.
Announcing the policy, Dr. Shakil Ahammed, Joint Secretary, Ministry of Agriculture & Farmers Welfare and Mission Director, Mission for Integrated Development of Horticulture (MIDH) said that the proposed policy would be evolved in due course of time in necessary consultations with all concerned stakeholders, including the industry.
The new policy would focus on productivity and quality of the agricultural produce as well as storage so that the farmers do not lose their produce and the consumer gets the best price in the entire value chain of the marketing.
The Government is propagating for doubling farmers’ income by 2022. However, it would not happen through increasing productivity only as currently we are not able to handle even the current produce. A study released in 2015 by ICAR-Central Institute of Post Harvest Engineering and Technology (CIPHET), points out that the post harvest loss among food products is 15.88 percent in India. Other international studies assess food loss in the South and Southeast Asia, mainly in India is around 30 percent.
If the productivity gets increased by any means such as increasing mechanization, enhancing irrigation facilities, bringing rainfed areas under irrigation, but the dark side is that we are not capable to utilize the current productivity due to lack of market linkage. Thus, the first focus needs to be on creating market linkage for agricultural produce. Though the Government has launched e-NAM (National Agriculture Market) to create market linkage and to provide better prices to the farmers. But, there is a lack of physical movement of commodities. The only reason behind the success of Flipkart was an online platform supported by a strong physical movement on the back-end. Thus, the physical movement needs to come into place first.
“Doubling income is going to happen through high value agriculture, by making ensured connectivity to the market and more jobs connected to agriculture. To counter the fluctuation in the international market, means more volume to grow,” adds Kohli.
Since its implementation in 2002, the Pradhan Mantri Gram Sadak Yojana (PMGSY) has considerably improved the connectivity in rural areas with all weather roads. The improving rural connectivity can be a driving force in connecting agricultural produce with the markets. Developing reefer trucks or end-to-end transportation can carry farm produce closer to last mile value realization. It will be a vital factor for more inclusive wealth creation in rural India.