India’s small private firms build temperature-controlled sites

Shivthar, India: There is a flurry of temperature-controlled warehouse construction in India to prevent the large-scale waste of fruit and vegetable production but these sites are mostly small-scale private enterprises, according to a Reuters special report on India’s food chain.

The food chain in India is undergoing large-scale change. “There is a view that this is a structural shift and pulses, milk, meat, eggs, fish, protein items – these are sectors where you need to concentrate,” Abhijit Sen, who sits on the government’s planning committee, said in a speech earlier this month.

Those shifts have been under way for years but are accelerating with rapid urbanization and the expansion of India’s middle class. India is getting wealthier: per capita income surged to $1,265 in 2010 from $857 in 2006, nearly a 50% increase, according to the World Bank and IMF.

Middle class households are expected to grow 67% in the next five years, bringing over 53 million households into an annual income bracket between 340,000 and 1.7m rupees ($7,600-38,000).

Bijay Kumar, managing director of the National Horticulture Board, says having more money than your parents is pushing up demand for high-protein foods. “Rising income levels are allowing people to spend on high value stuff,” he says.

In 2009-10, Indians boosted spending on fruit and vegetables by nearly 9% over the year earlier and spent almost 31% more on meat, eggs and fish. “A dietary transformation is underway in the country and demand for high value, vitamin and protein rich food such as fruit, vegetables, milk, eggs, poultry, meat and fish is increasing,” the International Food Policy Research Institute said in a study this year.

Ashok Gulati chairman of the government’s commission on farm prices and costs favours modernizing distribution networks. Supply chains should be shortened, by making it easier for retailers and food processors to buy direct from farmers. Although many states now allow retailers to do this outside the regulated local markets known as mandi, in practice poor infrastructure makes that difficult.

India’s supply chains are fragmented and often involve several layers of middlemen between tractor and table. Its road system is clogged and underdeveloped, while railway freight turnaround times are slow with limited availability of refrigerated freight vans. Cold storage of about 24 million tonnes is woefully inadequate for the world’s second-biggest producer of fruit and vegetables. All of this means availability of fresh produce is highly regionalized.

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