Only 2% of Indian produce stored in adequate warehousing

According to the Agricultural and Processed Food Products Export Development Authority (Apeda), India’s largely derelict warehouse network is thought to be responsible for annual losses to the tune of Rs440bn (US$7.3bn), yet still the country has been failing to implement adequate temperature-controlled facilities and new storage houses for perishable goods. 

Speaking to supply chain leaders in Delhi, Dr Santosh Kumar Sarangi, chairman of Apeda, painted a bleak picture of a system that has been left to crumble over generations.

“Only 2% of the fresh fruit and vegetables produced in India—the world’s second-largest producer—are stored in the few available temperature-controlled facilities, against 85% of the leading economies in the world. This is responsible for the whopping annual losses of fruit and vegetables​,” said Sarangi.

According to Dinesh Rai, chairman of the Warehousing Development and Regulatory Authority (WDRA), India’s incoming government has shown a desire to modernise the country’s supply chain, something reflected in the Budget earlier this month.

WDRA has been pressing the government to confer infrastructure status on the logistics industry, which should raise its profile and make it subject to certain entitlements from the government. 

That the Planning Commission has already endorsed this view suggests the Centre is now looking at an area it has traditionally, and conveniently, ignored.

“The new government is serious about the growth of the logistics sector, which can be gauged from the fact that it allocated Rs 5,000cr [US$830,000m] in the Budget for 2014-15​,” Rai said.

“In addition, subsidised loans are also granted for the logistics sector by public sector banks, with the government increasing subsidies for the sector to the extent of 25% on government grants to promote the sector​.”

The need for modern storage is more critical now than it has ever been, especially in light of how the recent Food Security Bill has added vast quantities of grain—enough to feed 820m people—to the equation. There are also increasingly more mouths to feed, with food consumption expected to double between now and 2030.

While there is no doubt that throwing billions of Budget rupees at the industry and giving it infrastructure status would be early positive steps, for any real progress to be made the government must also look for ways to stamp out the legions of grabbing middle-men who have learnt to profit from a confused and broken supply chain.

Unfortunately this has so far proved impossible to achieve and would require iron political will among lawmakers, many of whom are happy to maintain the status quo for personal profit. 

It is yet to be seen if the new government shares a real desire to get India’s logistics infrastructure back on its feet after generations of abject neglect. Farmers, entrepreneurs, consumers and the poor will be watching any developments closely.