Cold Chain On Perishables
December is not probably the best month to write an article on cold chain, but then almost all conferences on cold chain logistics take place in December and January. The International Cold Chain Alliance held its conference at Mumbai from December 1 to 3, and though this writer could not be present there, the views of the National Horticulture Mission (NHM) and the Ministry of Agriculture were adequately represented. There is no doubt that this is now a thrust area for investment, and the government is also getting ready to provide the institutional support base for the sector by establishing a National Centre for Cold Chain Development. This article will trace the evolution of the concept, and how the MoA proposes to take this forward.
But first a few facts about the demand and supply side of Indian horticulture. India is now the second-largest producer of horticulture produce in the world registering production of 71.5 million MT of fruits, 133.7 million MT of vegetables and 17.8 million MT of other perishable produce, i.e. nuts, flowers, plantation crops, spices, mushroom, medicinal and aromatic plants and honey, aggregating around 223 million MT in 2009-10. This is going to increase in the coming years as policy attention remains focused on this sector and farmers and growers adopt new technologies and best practices. However, a significant portion of this impressive produce goes waste. This is the supply side of the emerging scenario. On the demand side, it is accepted that India’s rapidly growing economy is translating into rising incomes and consequently, increasing demand for not just food but nutritious and quality foods viz. fruits and vegetables (F&V), poultry products, meats, etc. It is clear that the consumer is now spending a greater portion of his/her rupee on perishables, and over the next few years, the salience of fruits and vegetables will be equal to, if not higher than that of wheat, rice, sugar, pulses and oilseeds. The price volatility of perishables, and the fact that ‘institutional mechanisms like warehousing and public procurement do not cover these commodities also necessitate intervention
Four years ago, the Ministry appointed a Task Force comprising members drawn from various stakeholders viz. Central and State Governments, Indian Council of Agricultural Research (ICAR), State Agriculture Universities and Confederation of Indian Industry (CII), representing industry to identify the extent of losses in the horticulture sector, and recommend a strategy and action plan to address this. It strongly recommended the creation of a “dedicated institution for cold chain development…” in a PPP mode. The Task Force drew heavily on a National Spot Exchange (NSE) study (2010) on Cold Chain Grid in India, which estimated growth in demand for F&V by 2.5 per cent per annum. The report further stated that in order to reduce the post-harvest losses, estimated to be as high as 40 per cent in some commodities, (Planning Commission: XIIth Plan Working Group on Horticulture), a robust cold chain, transport and logistics infrastructure was required. This study also highlighted that the present capacity of cold storages was grossly inadequate. In fact, the presentation of NHM to the conference, stated, inter-alia:
First, the cold chain as it exists today comprises basically over 5000 cold storages representing total capacity of over 24 million MT. The requirement projected in the NSE study on the basis of peak season production and highest arrival/harvesting of storable fruits and vegetables in a month is 63 million MT cold storage capacities, revealing a gap between demand and supply of 39 million MT.
Second, the aggregate storage capacity is skewed in two ways. One, it is dominated by potato which accounts for 75 per cent of the aggregate capacity versus just 23 per cent accounted for by multi-commodity storages. Two, just three major states viz. Uttar Pradesh, West Bengal and Punjab account for over 75 per cent of the cold storage capacity.
Third, it needs to be noted that of the 24.45 million MT cold storage capacity, nearly 14 million MT has been created between 2000 and 2010 on account of interventions by NHB, National Horticulture Mission (NHM), Horticulture Mission for the North-East and Himalayan States (HMNEH), Agricultural & Processed Food Products Export Development Authority (APEDA) and Ministry of Food Processing & Industries (MoFPI), clearly suggesting the need for continued governmental initiatives in this vital sector.
Fourth, a cold chain (CC) is much more than simply a cold storage. It is the entire supply and value chain, from farm to fork, and from farmer to consumer involving pre-harvest, post-harvest, on farm storage, specialised transport, scientific storage and so on, till the point of final consumption.
And finally no institution in the country has developed standards and protocols related to CC testing, verification, certification and accreditation as per international norms. This makes it difficult for financial institutions, government functionaries and industry to establish transparent standards for financial and technical assistance for CC components such as refrigerated transports, transport equipment, refrigeration units, display cabinets, milk tankers etc. NCCD will address all these issues comprehensively. Similarly, skilled human resources are grossly inadequate in this sector. An important dimension of NCCD will be to deal with this ‘skill- gap’ squarely and undertake capacity building in a major way. It can also contribute to the National Skills Development Mission by training technical staff for installation, maintenance and regular servicing of the CC infrastructure. It can also offer HRD and technical advisory service for this sector.
This is the background in which the Ministry wants to establish a new institution to address these issues. For the present, it has been housed in the National Horticulture Board, but over time it should evolve as an autonomous body with representatives from all stakeholders, including industry and farmers’ associations. It has all the potential of creating a ‘virtuous cycle’ for all those engaged in this sector.
By Sanjiv Chopra
(The views expressed in the article are personal, not of Government of India)