NEW DELHI (Commodity Online): India is one of the largest producers of foodgrains and related crops but if suffers on account of lack of cold storage facilities.
A report by KPMG and Associated Chambers of Commerce and Industry (ASSOCHAM) has estimated that 40% of the agri-produce is lost in the fields after post-harvest for want of cold storage facilities.
Cold storage facilities for storing agri produce in India fall short of by 10 million tons since it has nearly 21.7 million tons of such facilities against the requirement of over 31 million tons as a result 40% of agri produce is lost in fields after its post-harvesting.
The report Food Processing and Agri Business of KPMG and ASSOCHAM adds that Indian export related infrastructure for agri produce is grossly inadequate especially at seaports and airports.
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“More than 30% of produce from fields is lost to poor post-harvesting facilities and lack of cold chain infrastructure. India has nearly 21.7 million tons of facility whereas it needs over 10 million tons more of such capacities”, said ASSOCHAM President, Sajjan Jindal.
Quoting findings of the report, the ASSOCHAM Chief said that cold storage facilities now available are mostly for single commodity like potato, orange, apple, grapes, pomegranate and flowers etc. which result in poor capacity utilization.
Therefore, the Chamber has emphasized the need for setting up of operating cold chain facilities for other specified products and warehousing facilities for storage of agriculture produce through public private participation initiatives. Although the Budget for 2009-10 has provided a great deal of incentives for setting up of warehousing and cold storage facilities with capital subsidies.
However, land acquisition for setting up of such facilities is still a large bottleneck as without government intervention, land cannot be acquired for creation of such facilities because it is an area which falls in the state list.
The Ministry of Agriculture and Food Processing should therefore facilitate land acquisition so that a good number of cold storage facilities are put up near sea and airports to reduce transaction costs.
Supply chain hindrances in Indian agri business are the most renowned for its long and fragmented supply chain. The inefficiencies in supply chain lead to huge losses due to wastage or shrinkage of perishable commodities.
The ASSOCHAM-KPMG Paper further says that the entire supply chain is dominated by unorganized players and absence of any structured market to ensure correct price discovery and availability of consistent quality produce. Several middlemen add to wastage from the farm to the consumer, retailer, processor or exporters.
A long supply chain also means that each level of the supply chain is unaware of the requirements of next level and thus there exists disconnect between farmer and processor.
The Paper has also recommended more fiscal incentives towards technology upgrade in food processing. The companies that are constrained by finances in upgrading to latest technologies in food processing will need to have an incentive and tax breaks that are helpful in initiating technological changes. This will lead to enhance quality and better value addition.
Source : commodityonline