·
The
production levels in the Indian agricultural sector have been growing steadily
over the years. This production level has not been met correspondingly in terms
of storage for food, which outlines an existing whitespace in the Indian
Agricultural Cold Storage Industry.
·
Despite
being an agrarian state, India suffers from huge food losses annually ranging
from INR 90,000-100,000 due to poor post-harvest management and lack of proper
cold storage infrastructure.
·
The
government has been taking steps to promote development in the agricultural
cold storage sector by introducing a plethora of schemes and providing grant in
aid, along with special preference to the states lagging behind in terms of
infrastructure.
It
is no wonder that India is a key contributor to agriculture sector worldwide
with 308.6 Mn Tonnes food-grain production during FY’21 (ranks second after
China), 198.4 Mn Tonnes of Milk in FY’20 (world’s largest milk producer) and
dominant producer of horticulture produce as well. After all, India has an
arable land of ~160 Mn hectares and 58% of population is dependent on
agriculture for its livelihood.
However,
the situation on per capita consumption of food grains, fruits, vegetables and
milk is not good. As per the Global Hunger Index (GHI) in 2020, India ranked 94
out of 107 countries and malnutrition was found to be the leading risk factor
for death of children <5 years age. Further, prevalence of Anaemia was noted
to be among 53% women of all reproductive age and 54% among girls aged 15-19
years. What is the root-cause problem behind this irony?
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Upon
a deep dive research and data analysis, analysts at Ken Research were able to
find that poor post-harvest management policies of agriculture, especially
Horticulture, is a key contributor to this grim situation. An estimate shows
that India incurs an annual loss of INR
90,000-100,000 crores every year in wastage of agricultural and
horticulture produce owing to poor post-harvest management policies. Further, 35-50% of such economic loss happens
due to lack of required cold chain infrastructure at farm-gate and hub level.
Before
ready for final consumption, produce of fruits and vegetables produce is
harvested, pre-cooled, sorted, graded into different categories and stored in
cold storage rooms for specified duration. Cold Storage facilities do not allow
bacteria formation, retains humidity and moisture; thereby increasing the shelf
life of produce while retaining the nutritious value. A study conducted by NCCD
and NABCON in 2015 highlighted the differences in the requirement of cold chain
infrastructure and actual availability of infrastructure. The key findings are
summarized below in the table:
Table: Key findings - All India Cold Chain Infrastructure
Assessment Study by NCCD & NABCON (2015)
|
Type of Infrastructure
|
Requirement (2015)
|
Existing Capacity (2015)
|
|
Integrated Pack-houses
|
70,000 numbers
|
250 numbers
|
|
Reefer Trucks
|
62,000 numbers
|
<10,000 numbers
|
|
Cold Storages (Bulk + Hub)
|
35 Mn Tonnes
|
32 Mn Tonnes
|
|
Ripening Chambers
|
9,000 numbers
|
800 numbers
|
But, how is the situation in 2021?
Although
the cumulative cold storage capacity has augmented in the past decade from 23.4
Mn MT in 2010 to 37.4 Mn MT in 2020 (surpassing the requirement of 35 Mn MT in
2015), a further deep dive tells us the disproportionate growth and
inefficiencies at the grass root level. More than 75% of the cold storage
capacity is concentrated among the top 5 states (UP, West Bengal, Gujarat,
Punjab and Andhra Pradesh) while 73% of total capacity is suitable for storing
single commodity only. 68% of cold storage capacity across India is suitable
for storing Potato only (foregoing economic benefits of storing milk, livestock
and other high value crops) and 92% of such units are being operated by private
players, characterizing an unorganized and fragmented industry unwilling to
undertake capacity expansion or invest in modernization of facilities.
Is there an opportunity to enter this industry and solve the
problem?
With
high growth expected in food and diary processing industries, rising
urbanization, shift in cropping patterns from agriculture to horticulture,
surging demand for nutraceutical products, maturing ecosystem with new age Agri-tech
startups and increase interest from PE/VC fraternity, analysts at Ken Research
believe that agricultural cold chain industry is poised for strong growth with
an estimated capacity addition of 6.5 Mn MT by 2025.
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Are there any incentives provided by government to promote
the industry?
There
are plethora of schemes and benefits implemented by union and state governments
to seek participation from private players and augment cold chain
infrastructure in India. The PM Kisan SAMPADA (Scheme for Agro-Marine
Processing and Development of Agro-Processing Centers) Yojana, approved by
Cabinet in May 2017, provides financial assistance in the form of grant-in-aid
at the rate 35% for general areas
and 50% for North East States,
Himalayan States, ITDP areas and Islands for storage and transport
infrastructure and at the rate of 50% and 75% respectively for value addition
and processing infrastructure subject to a max of Rs.10 crore per project for
setting up integrated Cold Chain projects in India. Through the Mission for
Integrated Development of Horticulture (MIDH), financial assistance is provided
to set up cold storages for various horticulture - fruits, vegetables, root
& tuber crops, mushrooms, spices, flowers, aromatic plants, coconut,
cashew, cocoa and bamboo. As on 31st January 2021, a total of 325 cold storage projects (214
completed and 111 on-going) are operational across India with a total
project outlay of INR 8,893 crores while the GoI has approved a cumulative
grant–in aid of INR 2,478 crores via its various schemes under MOFPI & NHB.
With support from government, strong tailwinds from end-users and favorable
economic conditions, cold storage units could help to solve hunger crisis and
ensure a protein, iron and nutrient rich diet accessible to 1.4 Bn Indians.
Key Topics Covered in the Report: -
Snapshot
of Agriculture in India (State wise Production statistics of Cereals,
Horticulture, Meat, Livestock and Poultry)
Situation
of Farmers in India (Profile of Farmer, Role in Value Chain, Problems and
Issues faced in storage of produce)
Overview
and Segmentation of Cold Storage Units (By Storage Temperature, Technology,
Regional & State wise Distribution)
Demand
side and Supply side Indicators of Cold Storage Solutions
Growth
Drivers and Challenges to growth of Cold Storage Industry
Cold
Storage Demand-Supply Profile of Key States – Uttar Pradesh, West Bengal,
Gujarat, Punjab and Andhra Pradesh, Maharashtra, J&K and Himachal Pradesh
Trends
and Developments
Union
and State Government Support to Cold Storage Sector
Impact
of COVID-19 and Future Outlook of Industry
Business
Attractiveness at Farm gate level
Recommendations
for operatiqng Sustainable Business
For More
Information, refer to below link: -
India Agricultural Cold Storage Industry
Related Reports:-
India Agritech Market Outlook to FY’2025-By Nature of
Services (Input Market Linkage & Farming as a Service, Supply Chain, Post-Harvest
Management & Output Market Linkage, Precision Farming, Advisory &
Analytics and Agri Fintech)
Business Potential for Cold Storage Facility in JNPT
Outlook to FY25 – Driven by increasing Trade of Food Products and
Pharmaceuticals along with growth in QSR
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing
& Communications
Support@kenresearch.com
+91-9015378249
