18 August 2009

India's shortage of cold storage threatens nation's harvests

COLD storage facilities for India's agriculturual produce is falling short by more than 10 million tons, according to a report by KPMG and the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
With nearly 21.7 million tons of such facilities against a national demand for more than 31 million tons, the massive shortfall in the country's cold storage is resulting in 40% of agricultural produce being lost post-harvesting.

Quoting findings of the report, 'Food Processing and Agri Business of KPMG and ASSOCHAM'. ASSOCHAM president, Sajjan Jindal said cold storage facilities now available are mostly for single commodity produce including potato, orange, apple, grapes, pomegranate and flowers, which results in poor capacity utilization.

Indian export related infrastructure for agri produce is described in the report as grossly inadequate, especially at seaports and airports.

ASSOCHAM 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.

However, land acquisition for setting up of such facilities is still a large bottleneck because without government intervention, land cannot be acquired for creatiing such facilities

The report also said that the entire supply chain is lengthy and dominated by unorganized middlemen who add to wastage from the farm to the consumer, retailer, processor or exporters. The absence of a structured market hampers efforts to make available consistent quality produce.

The report recommended more fiscal incentives to encourage firms to spend on upgrading food processing technology to drive technological improvements.

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