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Provisioning For Cold Chains In Budget 15-16 Be Much Higher, JS Ministry Of Agriculture

Capital Market 

The forthcoming budget of the NDA government would have larger allocations and many more incentives for sunrise cold chain industry as compared to what it provisioned in the budget proposals for 2014-15 with reduced subsidies so that farmers avail of better realizations of their produce, especially those of perishable produce such as fruit and vegetables, says Joint Secretary in the Department of Agriculture and Cooperation, Ministry of Agriculture Mr. Sanjeev Chopra.

Inaugurating a on Cold Chain-Technical Guidelines & Standards organized by the PHD Chamber of Commerce and Industry, Mr. Chopra without elaborating on the volumes of allocations and incentives that the department of Agriculture is expecting from budget 2015-16, explained that the ministry recommendations have gone to the finance ministry.

Since better realization of price to farmers of their produce is the focus of the government of the day, it would however, curtail subsidies for cold chains as the focus should be to enhance the catchments for farmers with proper transport facilities as of the current capacities of the cold chains, the agri produce stored in them is suitably transported to an extent of less than 3%, said Mr. Chopra.

Speaking on the occasion, the CEO & Chief Advisor, NCCD Mr. Pawanexh Kohli informed that Rs.5,000 crore Warehousing Infrastructure Fund has been set up by the NABARD in October 2014 to finance the cold chains under priority sector lending arrangements. The fund would help industry avail finances for cold chains and their diversifications including expansions, he indicated.

During the conference a background note was circulated which has been jointly prepared by PHD Chamber and National Centre for Cold Chain Development (NCCD), the findings of which revealed that this sunrise industry is growing annually at 28% the total value of cold chain industry in India and is expected to reach US$13 billion by 2017 through increase investments, modernization of existing facilities and establishment of new ventures via private and government partnerships.

India's cold chain industry is still evolving, not well organized and operating below capacity.

The Indian cold chain market is highly fragmented with more than 3,500 companies in the whole value system. Organized players contribute only 8-10% of the cold chain industry market. Most equipment in use is outdated and single commodity based. There are 5,381 number of total cold chain storages in India with 95% of total storage capacity under private players.

36% these cold storages in India have capacity below 1,000 MT. 65% of India's cold chain storage capacity is contributed by the states of UP and West Bengal. With the current capacity only less than 11% of what is produced can be stored. According to industry estimates, approximately 104 million metric tons of perishable produce is transported between cities each year.

Of this figure, about 100 million metric tons moves via non-reefer mode and only four million metric tons is transported by reefer. Majority of the refrigerated vehicles (80%) are utilized for milk and milk products transportation.

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First Published: Mon, February 02 2015. 14:31 IST