The Union food processing ministry has sent an ambitious Rs960 crore proposal to the Planning Commission for setting up integrated cold chain facilities and strategic distribution centres (SDCs) for fruits and vegetables in towns, airports and seaports across the country.
The cold chains will help contain costs from wastages which, in some instances, are 40% of the consignment and would, once it goes on stream, be the key in giving a big push to the retail fresh foods business, to take it to the next level.
The ministry proposes to execute the project with the Container Corporation of India, the Indian Railways, the Airports Authority of India and private infrastructure companies—with the government underwriting 50% of the cost.
The SDCs, each with a capacity of 10,000 to 20,000 tonnes, will form the last point for export of processed foods and provide forward linkages to supermarkets and malls. They will have infrastructure facilities like material handling equipment and specialized storage for a wide range of perishables and processed food products. Currently, there are just 4,700 cold storages, mainly for handling potatoes.
The cold chain facilities—controlled atmosphere chambers, reefer vans and mobile cooling units—will be provided right from the farm gate to the consumer.
The management of the centres will be outsourced to professional agencies.
P.I Suvrathan, Union secretary, food processing, said: “We are looking at setting up 50-60 cold chain centres if we get approval. These will be farmer oriented and linked to retail chains like Metro, Reliance and Bharti, so that a sustainable business model can be worked out.”
“We are experiencing a 40% value erosion while transporting fruit from Himachal to Gujarat. So the lack of cold-chain infrastructure is a big problem,” said a quality assurance official with Reliance Retail.
But Vijay Sardana, director of agribusiness consultancy Achievers Resources Ltd, feels the government has got the wrong end of the stick. “According to our analysis, most of the wastage occurs at the farm itself, due to wrong handling and packing. Most retailers prefer to incur wastage than a cold storage, which is high energy and high cost.”
“Consumers don’t like to buy cold products,” he added. Instead of pumping money into the creation of new centres, Sardana said the huge network of existing markets across India should be modernized.
Meeta Punjabi, consultant with the United Nations’ Food and Agriculture Organization (FAO), said: “With incomes from grain production on the decline, the horticulture sector is a key sector to enhance farm incomes. But at the grass roots level, education and extension services to farmers for post-harvest management are as crucial as cold-chain facilities.”
According to the latest Economic Survey, with 53 million tonnes of fruits and 108mt of vegetables in 2005-06, India is the second largest producer of fruits and vegetables in the world.