India loses Rs 90k cr/year worth of crops for want of cold chain, processing units

Q3. Which brand would you associate with Drums Foods?

Shortage of cold storage chains and food processing capacity causes the country a loss of over Rs 92,000 crore worth of crops annually, according to a report in the Financial Express today citing a study by the Central Institute of Post-Harvest Engineering & Technology (CIPHET). The losses are estimated based on crop production of 2012-13 and wholesale prices of 2014.

Fruits and vegetables are the worst hit due to higher prices relative to grains, and quick perishability which permits little time from their harvest to sale. This segment suffers 34 percent losses followed by cereals and livestock products at 22 percent and 20 percent, respectively.

It is also disheartening that the processing level of food items in the country currently stands at just 10 percent despite it being the world’s largest producer of milk, and second-largest grower of rice, wheat, fruit and vegetables.

The government though, is working hard to address these issues by awarding grants to eligible companies. The Food Processing Minister Harsimrat Kaur Badal recently announced grants to companies like Big Basket, Amul, Haldiram and Falcon Marine Exports, among others to set up a total of 101 cold chains for farm and food items with a total storage capacity of 2,76,000 tonnes. Investments in this project will total Rs 3,100 crore, with Rs 838 crore coming from the government and balance Rs 2,200 crore invested by the companies..

As for processing capacities, government aims to more than double it over the next five years.

To make the food sector an attractive play for investors, the government had permitted 100 percent foreign direct investment for trading of products manufactured in India. The trading can be done even via the e-commerce mode but is subject to an approval of the Foreign Investment Promotion Board (FIPB).