India’s food industry laid low by increased wastage

By Ankush Chibber

- Last updated on GMT

Related tags: Food processing, Food industry, Food, India

India’s food industry laid low by increased wastage
India’s food production industry is being crushed under alarming post-harvest losses that may cross US$36bn in 2013-14, new research into the country’s agri-processing sector has revealed. 

According to the study done by the Associated Chambers of Commerce and Industry in India (Assocham), India is trailing only China when it comes to food production, but the country’s post-harvest losses continue to be a concern.

At least 30% of fruits and vegetables were rendered unfit for consumption due to spoilage after harvesting, negligent attitudes, absence of food processing units and the unavailability of modern cold storages. At present, only 22.3% of produced fruits and vegetable actually reach the wholesale market in India. 

Innovative mechanisms

India’s current levels of food processing continue to be low in perishable categories like fruits and vegetables [2-3%], poultry [6-8%] and fisheries [10-12%]​,” said Rana Kapoor, Assocham’s president. 

This can be turned around by adopting innovative institutional mechanisms to upscale both our warehousing and logistics infrastructure​.”

He pointed to effective collaborations between the public and private sectors as one cure and sighted the “Vision 2015” plan put forth by the Ministry of Food Processing Industries.

This [plan] envisages tripling the size of the processed food sector by increasing the overall level of processing of perishables to 20%. This will entail significant capacity creation in the food processing sector, with the twin objective of enhancing shelf life of produce as well as reducing wastage​,” he said. 

On enquiring about the progress of the plan, an official from the MoFPI told FoodNavigator-Asia that a plan for the food-processing sector has already been approved by the government, but declined to go into specifics. 

The study observed that towards the end of 2012, the total cold storage capacity was 30.1m tonnes—which equates to only 12.9% of fruit and vegetable production—with an additional requirement of 36.8 tonnes in capacity.

The existing cold storage capacity is available only in or close to wholesale markets, whereas the majority of fruits and vegetable are sold at local or regional markets—resulting in spoilage at the retail end of the supply chain.

Reducing losses

The study noted that wholesale market development is a substantial factor to reduce post-harvest losses.

Where multiple equilibrium prices occur for a single commodity because there are no wholesale markets, price transparency is undermined and transaction costs rise​,” it noted.

It found that wholesale markets for fruits increased in number from 685 in 2008-09 to 760 from 2011-12. However, in spite of development, the market reach of the fruits has declined by 44.1% over the same period.

Similarly, the numbers of wholesale markets for the vegetable sector in India increased from 1,002 in 2008-09 to 1,087 in 2011-12. At the same time, market arrival has registered only nominal growth of 2.17%. 

Post harvest losses in the study were calculated on the basis of production and wholesale market price among states, and the report found that among the major producing regions, West Bengal incurred highest losses, followed by Gujarat, Bihar, and Uttar Pradesh. 

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