An efficient and clean cold chain for Indian agriculture needs a policy push that would stop the staggering waste of farm produce in the country
India is the world’s second-largest food producer after China. Yet it is home to a quarter of the world’s undernourished people and about 22% of its farmers depend on subsistence farming. Annually, farmers lose a staggering INR 1,000 billion (USD 14.4 billion), more than 3% of the agriculture GDP, in post-harvest losses. These losses can be largely attributed to a sparse cold chain.
Why does India have an inadequate cold chain? How can the cold chain be scaled up across India in a sustainable way? What role could the India Cooling Action Plan (ICAP) play in building an ecosystem for it?
An agricultural cold chain is to transport perishable produce seamlessly from farm to plate. This comprises of pack houses, warehouses, ripening chambers, refrigerated trucks, cold storage and domestic and commercial refrigeration. A 2015 analysis by the National Centre for Cold Chain Development (NCCCD) showed that apart from cold storages, which are at 91% capacity, all other cold chain components are below requirement. It does not help that the supply chain is largely fragmented and informal, with less than 10% of the players belonging to the organised sector. To address these shortcomings, the Indian government released the ICAP, which provides a technology centric overview of cold chain expansion in India.
Technology isn’t enough, nor is ICAP
But technical innovation alone is unlikely to lead to widespread adoption of any new technology. This is where policy must step in. The ICAP presents an opportunity to create a clean cold chain. Such an intervention would help reduce loss of produce, while it would also help India meet its international targets in emission reduction, refrigerant management and clean energy transition.
However, in its current form, the ICAP falls short in acknowledging more immediate, on-ground issues of both demand and supply. Demand estimation for a clean cold chain across India currently does not consider equitable access for all farmers. At the same time, supply options of innovative clean cold chain technologies have not been examined at scale.
To create demand, first, India needs to create awareness among its farmers, who are yet to realise the benefits of an integrated, end-to-end cold chain. The cold storage capacity currently available is mainly being used only for potato. Furthermore, due to the high upfront cost involved, the cold chain remains out of reach of more than 85% of farmers, classified as small and marginal with landholdings of less than five acres. Wealthy farmers, especially those who are supplying produce to the export market, have largely been the only adopters of cold chain infrastructure.
Second, unlike in the European Union where cold chain is a requisite for harmonised food hygiene, India does not have a mandate for an integrated clean cold chain from production to consumption. This creates disincentives for innovators and entrepreneurs as they seek a clear policy signal that enables them to create and distribute products at scale. Forums such as CoolingEU, for instance, are instrumental in encouraging innovation and raising awareness among stakeholders, including policymakers, for an efficient and clean cold chain.
Clean cold chain
To examine the scalability of clean energy innovations in rural India, it is important to conduct large-scale, strategic pilots, as highlighted in a recent report by the Council on Energy, Environment and Water (CEEW). A clean cold chain presents opportunities that are being exploited by product innovators; however, these supply options are yet to be tried out at a representative scale that nudges impact investors, policymakers, or bankers.
For instance, solar-powered micro-cold storages developed by a Pune-based start-up help smallholder farmers in multiple ways: precooling at farm level to reduce immediate wastage, storing until the farmer finds a good price in the market, and improving market reach to increase the possibility of higher income. If such innovative technologies and business models can be deployed at substantial scale, the gathered evidence can unlock debt financing, equity investment, distribution networks and policy support.
The draft ICAP has adopted a refreshingly holistic approach to cold chain expansion by including concepts such as energy efficiency, novel refrigerant gases, and innovative technology options. It can be further strengthened if the plan acknowledges the challenges that prevent the expansion of a clean cold chain at scale and presents informed recommendations based on them. While technology advances and business models evolve for this sector, the role of policy is to ensure that the benefits are reaped by all farmers and consumers. Creating a clean cold chain across India promises to bring in a new agricultural revolution, one that is good for the people as well as the planet.
Apurupa Gorthi and Sanchit Waray are researchers at the Council on Energy, Environment and Water (CEEW).