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Agriculture | Decentralised cold storages are a key to a self-reliant rural India

Decentralised cold storage has the potential to create more jobs and livelihoods opportunities. It is still at a nascent stage in India and has tremendous growth potential

June 17, 2020 / 11:57 AM IST
Representative Image

Representative Image

Sunil Dhingra

Apart from being one of the biggest health crises to affect humanity in recent times, the Coronavirus pandemic has also led to a severe economic slowdown across the world. In India, this has also resulted in the large-scale reverse migration of people who had come from villages to cities in search of livelihoods. Given that it’s not clear how long this outbreak will last, one can expect that those who have reached their villages, will remain there for the near future.

This poses further economic challenges in terms of jobs and livelihoods to the suddenly increased rural population. Most livelihood opportunities in rural India are related to agriculture and forestry and are, hence, limited and seasonal in nature. Add to this the issue of a majority of agricultural/horticulture crops being perishable in a matter of days, and one is facing a major problem.

To achieve Prime Minister Narendra Modi’s vision of an Aatmanirbhar Bharat or self-reliant India, improving rural livelihoods in agriculture, horticulture, forestry, animal husbandry, dairy and fishery-related activities is important. Aatmanirbhar Bharat provides opportunity for increased investment in strengthening rural infrastructure, agri-storage facilities, and promoting entrepreneurship in agriculture and allied sectors.

This has the potential to make the agriculture sector not only self-reliant but also more resilient to shocks. It also has the potential to create more jobs and livelihoods opportunities for the suddenly increased rural population. The socio-economic benefits of something like this could range from reduction in post-harvest food losses to increased farmer income. It could also promote local entrepreneurship development and employment opportunities.


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India has seen a phenomenal growth in horticultural produce such as fruits, vegetables, and spices, apart from dairy products. The Ministry of Agriculture and Farmers Welfare, Government of India, estimates that India produces around 314 million tonnes of horticultural crops (viz. fruits, vegetables, flowers, aromatic plants, and spices) annually and more than 150 million tonnes of milk daily. India is the second largest producer of fruits at 97.4 million tonnes and vegetables at 187.3 million tonnes. The horticulture sector accounts for 6.5 percent of India’s GDP, 13 percent of its employment, and over 9 percent of its exports, despite only 9 percent crop acreage.

However, despite huge progress in production in the past 10 years, the situation of post-harvest management of fruits and vegetables remains extremely discouraging in India. According to estimates by the Central Institute of Post Harvest Engineering and Technology (CIPHET), post-harvest losses of fruits and vegetables in India are estimated at Rs 133 billion.

The lack of proper cold storage facilities in India forces farmers to sell their perishable horticultural produce at whatever prices the market offers at the time, which are usually sub-optimal. In case of delays, farmers bear the entire burden of post-harvest losses. In India, these go up to 25-40 percent of the annual production. Such high loss is one of the primary reasons for low per person consumption of horticultural produce despite the high nutritional value.

Further, such huge wastage across the value chain of high-value perishables discourages farmers. Cold storage facilities allow farmers of horticultural crops to store their produce for long periods of time without risking loss in quality. The produce can then be sold when market demand is high and prices are attractive.

Decentralised cold storage holds the key to not only reducing losses but also to rejuvenating agriculture and boosting rural employment. Decentralised cold storage systems are essential for intermediary storage at the local farm level. This area is still at a nascent stage in India and, therefore, has tremendous growth potential given the large production volume of perishable fruits, vegetables and dairy products.

Cold storage facilities based on alternative power solutions, such as solar or biomass, could prove to be very useful for the farmers and Farmer Producers' Organisations (FPOs). Decentralised cold storage units can have a storage capacity ranging from 5 to 15 metric tonnes (MT), and would be powered by compressor-less refrigeration systems that use hot water at high temperatures to run a refrigeration cycle with no moving parts, to maintain a temperature of -5 degree Celsius. Such systems can be operated by harnessing solar energy or on bio-waste materials such as biomass pellets/briquettes, bamboo, biogas etc., that are easily available in rural areas. This would result in very low operating costs, compared to diesel or grid electricity-based systems, in addition to being environmentally benign.

According to a conservative estimate, there is a potential to set up 250,000 such systems across India, which could generate around 250,000 direct jobs and 750,000 indirect jobs in operation, maintenance, collection, transportation and allied services. This could collectively inject Rs 500 billion worth of new investments into the rural economy, besides the local generation of renewable energy that would result in a cleaner environment.

With such all-round benefits, rural India would be less dependent both on the vagaries of nature and of the economic climate of the rest of the world.

Sunil Dhingra, Senior Fellow and Associate Director, Renewable Energy Technology Applications, TERI. Views are personal.
Moneycontrol Contributor

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