A Sustainable Solution for Post-Harvest Management in India

Updated: Jun 21


Author: Preeti Kumari

Energy Review, Vol 4. Issue 5. 2022

In India, agriculture and its allied sectors are the mainstays for its rural population. 70% of the rural households primarily depend on agriculture as their primary source of income. There are about 82% of the farmers are small & marginal meaning that they own less than 2 acres of farmland. These are mostly fragmented and are involved in growing majorly cereal crops. Smallholder farmers play a significant role in the Indian agricultural value chain as they contribute to over 40 percent of the country's grain production, and over half of its fruits, vegetables, and oilseeds production. The total food grain production as per the 2nd Advances in 2021-22, is estimated at a record 316.06 million tonnes which is higher by 5.32 million tonnes than the production of food grain during 2020-21. Though there has been an increase in production, a significant proportion of the produce is lost or spoiled due to the inadequacy of appropriate farm-to-market logistics. It has been estimated that around INR 92,651 crore per annum is lost due to post-harvest losses out of which INR 63,000 crore per annum is lost due to poor storage facilities.

According to the research conducted by the Indian Council of Agricultural Research on crop losses in India it estimates the loss to be around 3.9% to 6% in the case of cereals, 2.8% to 10.1% for oilseeds, 4.3% to 6.1% for pulses, 5.8% to 18.1% for fruits, and 6.9% to 13% vegetables were in harvesting and post-harvesting phase. This is attributed to a lack of proper cold storage facilities, inefficient cold-chain network, poor infrastructure, and inaccessibility to small-holder farmers especially in rural areas. This forces farmers to sell their perishable horticultural produce at whatever prices the market offers at the time, which are usually sub-optimal.

Even if cold storages are available, they are majorly used for bulk storage and mainly for a single commodity such as potato, apple, etc. and on a single temperature and for the long term. In addition, a farmer has to travel a substantial distance to avail of this conventional cold storage located away from the village thus adding to the transportation cost and time. The other factor that ails the sector is an unreliable power supply as mostly cold storage run on grid electricity which limits the operations of the system. Further, the volatile fuel prices and dependence on conventional sources of energy pose a hindrance in the scaling of the cold storage industry.

The Food and Energy Nexus

To feed the growing population, the agricultural productivity has to be increased which means putting immense pressure on Indian agriculture to produce more, and thus will require increased access to reliable energy from input to production. Presently, each step of the food value chain is resource-intensive and relies heavily on fossil fuels to operate. There are 8,186 on-grid/diesel refrigerators are running in the country with a total capacity of 37 million MT used for storing perishable products, but 75% of these systems are used for a single commodity i.e., potatoes whereas only 25% of them are used for multi-commodity storage majorly used for storing tomatoes and onions. This increases the GHG emissions from the agricultural sector, which in turn impacts agricultural production itself, thus raising sustainability issues.

In addition, the food losses at the post-harvest stage are equivalent to about 6-10% of greenhouse gas emissions due to anthropogenic activities. Henceforth, the food loss is not the only threat to returns on farmers' income but also contributes to climate change. To improve smallholder agricultural production and post-harvest value addition, the rural energy gap is a critical barrier. To attain the twin objective of maximizing returns for farmers and ensuring food security efficient post-harvest management becomes crucial. There is a requirement for investment in the cold chain, specifically in pre-cooling and transport refrigeration equipment has the potential to reduce India's perishable food loss by 76% and CO2e emissions by 16%.

Cold Storage: Benefits, Challenges and Prospect

The solution available for reducing losses of perishable produce had been in the form of cold storage facilities or warehousing. These reduce losses by extending the shelf-life of products, avoiding glut, reducing transport bottlenecks during peak production periods, and ensuring the overall quality of products. Though the importance of cold storage in the post-harvest management or the economic development of the nation, is evident, however, the progress in the development of the network of the cold chain had been skewed and it displays a ‘one-size-fits-all approach. There has been also an uneven distribution of cold storage in India with Uttar Pradesh, Gujarat, and Punjab having the highest number of cold storage facilities whereas states like Bihar and Chhattisgarh have the lowest number of cold storage i.e., 3% and 1% respectively. To address these challenges what is required instead is setting up small capacity decentralized cold storage systems either close to farms or at the mandi (vegetable & fruit market) level.

Oorja Development Solutions piloted a decentralized cold storage unit in Muzaffarpur district, Bihar (India) on a “Cooling-as-a-Service” business model where smallholder farmers can store their produce on a pay-per-use basis without any upfront cost for technology acquisition

Need for DRE-based Cold storage

As most of the cold storage in India are of large capacity and are located in urban centers, there is a critical need for Decentralized cold storage to meet the varying need of farmers, especially for products having a short shelf life. These systems can be run by harnessing solar energy or on bio-waste materials that are easily available in rural areas and thus will lower the operating cost compared to the cost incurred to run such systems using conventional sources of energy. The off-grid solar refrigeration sector not only holds the key to preventing food loss but also generates local employment in terms of direct and indirect jobs such as collection agents, operators, maintenance and transportation, etc. The total addressable market for off-grid solar refrigerators in India is USD 15 billion to store perishable produce at the farm gate level.

Despite the immediate requirement and growth potential of such systems, off-grid solar refrigerators are still in a nascent stage. Some of the key barriers faced in the uptake of such systems are the upfront cost, lower purchasing power of smallholder farmers, poor access to financial assistance, nonavailability of products that match the needs of rural customers. In addition, the limited policy focus on productive use appliances, lack of awareness among customer segment, and the uncompetitive market are some of the challenges that hinder the adoption of decentralized off-grid cold storage. As the development, operation, and maintenance of these systems are mostly carried by private players, it becomes imperative for the government to engage with the private sector to ease restrictive policy, remove market barriers, foster market linkages, provide market intelligence and raise consumer awareness. As the uptake of decentralized cold storage develops, it would be interesting to see what is the most favourable business model among smallholder farmers, catering to the factors such as affordability, and -consumer awareness for scaling such clean energy solutions.

(Ms. Preeti Kumari is a Project Associate at Oorja Development Solutions India Private Limited, New Delhi.) ■□■