India has about 7100 cold stores with a holding capacity of 33 million MT. But the challenging state of affairs of cold chain infrastructure in the country needs to transform to be more reliable, capable & technically competent in order to reap benefits of India being famously known as the agrarian state. The standards and practices have to be evolved & percolated down, even to the levels of truck drivers. The key stakeholders of farmers and traders have to join hands to grow in protected condition & transport in cold chain to drive the change, believes Mihir Mohanta, General Manager (SCM), Mother Dairy.
India is one amongst the world’s largest producers of several Fruits & Vegetable (F&V). It is second only to China in terms of total production. It is number one producer of Mango, Banana, Okra and number two in Potato & Tomato. With a total production of about 270 million MT of F&V, it even surpasses the combined volume of rice & wheat together. But if you look at the extent of processing, it processes just about 2% of the production, while for China it is 40%, US 65% & Malaysia 85%. Hence, most of the F&V that is produced in India, is consumed in fresh form.
The large quantity production is also associated with a very large quantity of wastage. As per Central Institute of Post-Harvest Engineering and Technology (CIPHE), 18% of India's F&V production - valued at Rs13,300 crore, is wasted annually. The commodities contributing to major losses are Grapes, Apples, Mango, Potato, Tomato and Onion. Of these, Potato, Onion, Tomato & Mango alone contribute to an extent of 63%. While the reasons of losses are many, one of the simple & easiest explanation given is that the post harvest losses are due to lack of the cold chain facilities in India. Some of the cold chain facts about India are as below:
- According to industry estimates, approximately 104 million metric tons of perishables are transported between cities each year.
- Of this figure, about 100 million metric tons moves via non–reefer mode and only four million metric tons is transported by reefer.
- Of this, majority of the refrigerated vehicles (>80%) are utilized for milk and milk products transportation.
- The percentage movement of F&V through cold chain is negligible, while in USA it is around 80-85%, in Thailand 30-40%.
- Potato which occupies 75% of the volume of the cold store does not use refer transport either for inward or outward movement from the cold stores.
Now the million-dollar question is that despite the huge wastage, why is the cold chain engagement is so low in India? India with its diverse climate can produce any kind of F&V at any point of time at some location or other. To cater to the fresh demand, the crops are grown round the year, but the production geographies keep changing as per the crop-climate requirements. Typically, any consumption point has to undergo 3-4 season/supply arrangements during a year for the same crop. From a perspective of logistics, simple transportation is a nightmare for such a situation, leave alone the cold chain. The cost of the cold chain transportation becomes prohibitively higher (about 2-3 times) than the ambient transport. One of the reason for high freight is also because of the non-availability of the reverse load. The other issue with cold chain is that, inadequacy of the first and the last mile connecting infrastructure. These are almost non-existence. We grossly lack pre-cooling facilities at the farms. Similarly, our vegetable vendors lack temperature controlled outlets. So, there are question marks around the cold chain integrity for movement till the consumer.
India has about 7100 cold stores with holding capacity of 33 million MT. Potato occupies 75% of volume of these but, it generates only about 20% of revenue. Whereas the multi-commodity stores which account for 23% of capacity generate 54% of revenue. Technically speaking single commodity potato cold stores are not viable. But their survivals are owing largely to the potato trading & money lending business rather than rental on storage. The farmer’s stored potato serves as collateral to Banks for financing the cold stores owner. The cold store owner uses the finance to buy & stock potato or lend it to the farmers against his potato stock. As the stocks move to the cold stores, it gets consolidated at a fewer hands who happens to be owners of the cold store. These handful of people are in a position to influence the price. This leads to volatility in potato prices despite maximum cold store utilization and even for normal production year.
Onion not only brings tears to the eyes of the house wife but also has history of bringing down the government. The story is quite the opposite here. There is lack of right kind of technically sound, ventilated & air circulated cold stores. Most of the storage done in Nashik, Bhavnagar or Indore are not the cold stores but open Chaals, which allows free flow of natural air. Although most widely used, these stores do not provide enough confidence for safe storage. These kind of storage is subject to environment conditions. With the passage of time from May to Oct the deterioration increases at an increasing rate. The losses could be as high as 35% in Oct. Significant investments do not come for Onion storage as the capacity utilization is less than 6 months & it has to compete with very low cost Chaals. Unless there is abnormal price increase, the normal years would not support cold storage of onion.
For Tomato, cold chains are not in operation. It is transported basis stage of maturity at the time of harvest. If tomato is in green stage, it is sent to the distant market, if red consumed in nearby market & extreme red goes for processing. With more than 90% of water content, the shelf-life of the product is less than 7days. So, the trade does not retain its ownership for long, instead it is preferred for early disposal. If the cold chain is to be worked out for the same, it needs to start from the seed varieties which have less water, higher dry matter & longer shelf–life. This means that the orientation of the existing supply chain has to shift completely. The key stake holders of farmers and traders have to join hands to grow in protected condition & transport in cold chain. Here the consumer should be willing to pay for the additional cost. The abnormal price of Rs100/- per kg during the monsoon can be reined in if cold chain is resorted to.
For F&V, the cold chain is not just bringing temperature down but it also has to manage an entire range of the other parameters, which could impact its life. F&V in general are live products and they continue to respire. There are a host of parameters like Humidity, Ethylene, Carbon dioxide, Oxygen & Nitrogen, which can impact the life of a particular item. Certain items may need multiple parameter management while for many investments cannot be justified on the back of the low product value. But for the products like Apples which are single season, such Controlled Atmosphere (C.A.) management is beneficial as it can improve the shelf life up to 10 months as against life of 2-3 months in ordinary cold store. The constraint in apple is that there are not adequate cold stores available in the major growing areas like Jammu & Kashmir, which has the production to the tune of 17Lakh MT whereas the available storage is just 70K MT, similarly in Himachal, the production is 7Lakh MT & the storage available is 53K MT. The CA storage capacity is even much less.
Products sensitive to ethylene should not be stored together with products producing ethylene. Exposure to ethylene may soften the flesh, adding bitter taste to the product or/ and accelerate ripening. Each of the fruits & vegetable have different storage requirement, it may not be feasible to club two items together for cold chain unless both items have similar storage requirements.
Building cold chain for F&V is not just adding fleets of refer trucks or adding cold store capacities. There is a lot of technology involved in managing & maintaining the temperature & other parameters. The frozen F&V segment of the refer transport even today falters in maintaining the required -18deg C temperature. The existing cold chain industry also has to transform to more reliable, capable & technically competent. The standards and practices have to be evolved & percolated down, even to the levels of truck drivers.
Any cold chain for Fruits & Vegetable has to be a viable cold link between farmers & consumers. Both the production centers & consumption points need to be planned for appropriate crop, season, price, quality & freight. The cold chain must appreciate the product shelf-life, storage requirements, demand & supply situation. These can provide price stability, reduce volatility & wastage which would benefit both consumer & farmers, but these will come at a cost. The consumers should be willing to pay for the additional cost required to manage the cold chain, least these cannot be sustained.