More cold chain projects welcome

The Union Ministry of Food Processing Industries recently sanctioned setting up of 30 new cold chain projects, bringing the total approvals in the sector to 138. Once all of them become operational, they are expected to add 4.76 lakh tonnes of storage capacity and 118 lakh litres per day of milk processing capacity to the country’s infrastructure. Already, 56 of the 138 projects have commenced operations, and they couldn’t have happened any day sooner since a recent study by Assocham found the total cold chain storage capacity in the country at a poor 35 million tonnes, against the requirement of at least 61 million tonnes. A study by CIPHET in 2013 found that the country wastes around Rs 44,000 crore worth of fruits, vegetables, and grains every year. Assocham said 30 per cent of India’s annual fish catch of 10 million tonnes is wasted. And the consensus view is that the biggest contributors to this wastage are the lack of refrigerated transport, and inadequate cold chain infrastructure.

The Assocham study zeroed in on specific woes of the sector. One is the uneven distribution of cold chain infrastructure with Uttar Pradesh and West Bengal accounting for 64 per cent of the capacity. Another is the prevalence of obsolete ammonia refrigeration systems with slow-speed compressors, which are power guzzlers and take up lot of space with their need for large, bunker-style evaporator coils. Again, a disproportionate 75 per cent of the installed capacity is suitable only for potato storage, when the revenues earned from this commodity account for only 20 per cent of the total since rentals for the tuber are low. It is clear that the sector needs investments in energy-efficient refrigeration, multi-crop storage, and even distribution of facilities.

Successive governments have been seized of the urgency to shore up infrastructure in the sector, and a host of incentives have been made available. A nodal agency, National Centre for Cold-chain Development, has been set up to promote installation of cold chains; 100 per cent FDI is allowed under the automatic route; deduction for capital investment is allowed up to 150 per cent; investments in storage have been made eligible for viability gap funding; and cold chains have been recognised as an infrastructure sub-sector. Recently, the RBI stepped in to classify loans to the sector under priority sector lending. This would make the sector eligible for low-interest rate loans. It’s time for private enterprises to step up to the plate and tap these incentives so that the whole country gains from reducing the wastage in transferring produce from the farm to the fork.

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