National Horticulture BoardHeralding Golden Revolution

Govt. initiatives in

Cold Chain Development -emphasis on Energy Efficiency

Dr. R.K. Sharma

Director

National Horticulture Board

Ministry of Agriculture, Govt. of India

(Former Core Expert (FAO, UN)

Structure of Presentation

• Regulation through technical standards & financial incentives

• R&D - Protocol for tropical produce

• NCCD-HRD

• MFPI

• WDRA

• Concessions in duties and FDI

• Multi-Modal Transport

• Prospect for cold chain development in the next decade

• Role of Govt. in development process

• Synergy

In developing countries more than 40% of the food losses occur at post

harvest and processing levels, while in industrialized countries, more than

40% of the food losses occur at retail and consumer levels. Food waste at

consumer level in industrialized countries (222 million ton) is almost as high

as the total net food production in sub Saharan Africa (230 million ton).

Govt. initiatives - milestones

• High Power Committee Study (1997-99)

• Lunch of first scheme (25% subsidy) in 2000

• NHB, NABARD, Commercial Banks, State Govt.involved

• Cold Chain Task Force constituted (3.5.2007)

• Task Force Report (14.8.2008) - Implementation

• Technical Standard Committee constituted (16.6.2009)

• Implementation of Technical Standards starts 1.4.2010

• Creation of National Centre for Cold ChainDevelopment (27.1.2011)

Technical Standards

and financial incentives

-regulatory tools

Regulation through technical standards

• TSC submitted standards in February 2010, revision workshop14.10.2011

• Amount of subsidy linked to the level of technology employedthrough the following five technical standards notified

- Cold storages for storage of fresh horticulture products which do not requirepre-cooling

- Multi-commodity Cold storages for short term and long term storage of freshhorticulture products which require pre-cooling and varying storagerequirements.

- Control Atmosphere (CA) Storages: Active modified atmosphere systems,control of one or more gases (Oxygen, Nitrogen, Carbon dioxide) within anenclosed space, is a Non-chemical process.

- Scientific Fruit Ripening Units

- Specialized Transport Vehicles including insulated and or refrigerated transportvehicles for perishable food items including fresh fruits & vegetables.

Enhanced Capital Investment Subsidy linked to Standards

1. Multi-chamber CS with mezzanine floors of RCC and or wooden structure: notrequiring pre-cooling; civil structure, insulations and cooling system as perprescribed Standards; minimum two chambers - @ Rs 6,000 per MT

2. Multi-chamber and Multi-Product CS: excluding mezzanine floors CS & cost ofpre-cooling system; having rack pallets system & forklift, bins, crates andsafety devices against accident; civil structure, insulations and cooling systemas per Standards - @ Rs 7,000/ MT

3. Multi-chamber and Multi-Product CS: excluding mezzanine floors CS; havingon- or off-farm pack house facility of washing/de-sapping, drying, sorting,grading, waxing, packing, pre-cooling system, rack pallets system & forklift (asper site conditions), bins, crates and safety devices; civil structure, insulationsand cooling system as per prescribed Standards - @ Rs 8,000/MT

4. Modernization of Cold Storages: up-gradation of thermal insulation, coolingsystem, refrigeration, air flow, electric installation, handling devices, safetydevices etc. Project based @ maximum Rs 1000/MT for (2) and upto Rs2000/MT for (3)

5. CA Storages: @ Rs 32,000/MT (CA space) + 38,000/MT (CA GradingPacking Systems etc)

6. Frozen Food Stores: @ Rs. 25,000/MT (500-1,000 MT capacity), @ Rs.23,000/MT (larger capacity)

Financial Incentives

• Enhanced project cost & Capital Investment Subsidy rate linked to

Standards

• Credit linked back-ended subsidy @ 40% of the capital cost of

project in general area and 55% in case of Hilly & Scheduled Areas

limiting to 5,000 MT storage capacity per project

• Depending upon the type of produce, different types of cold storage

defined; with mezzanine floors; with rack pallets system; with on- or

off-farm pack house facility

• Modernization of cold storages included

• Controlled Atmosphere cold storages with integrated lines

• PHM facilities including reefer trucks as integral part of projects

being encourage

Energy Saving

• Power consumption in most projects 0.16

unit/day/MT (for 5000MT store) against ideal of

0.18-0.20 unit/day/MT, against 0.14 ideal

• 10 -15% energy saving, with automation

• Weight loss reduced 8 -10% to 2.3% presently

• Quality of the produced improved Use of Automation

like VFD, PLC especially in CA Store.

• Change of trend for automation

• Standards help in selection of equipment

R&D - Protocol for

tropical produce

Successful Protocol for GI Dusheheri

mangoes transport (June 2010)

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(°C) Mango Temp

(%H) Mango Rh

Carrots storage; Wooden bins, Tolsma

Holland (left), bags in MS bins

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Actual Chamber Temperature in degree C

Agreed Chamber Temperature Degree C

Product temp in degree C

2 per. Mov. Avg. (Product temp in degree C)

Observations

• Time taken in chamber loading to first temperaturerecording: 4 days

• Initial recorded chamber temperature: 13.5 degree C

• Initial recorded product temperature: 16.5 and 16.7 degree C

• Date of chamber attaining holding temperature of 1 +/- 10%degree C; 4 April '11

• Date of produce attaining holding temperature of 1+/- 10%degree C; 4 April '11

• No. of days from date of sealing in produce attaining desiredholding temperature: 8 days

• Slope of Time - Temperature curve is indicative of smoothcooling as captured by the probes; there is no rise in producttemperature either, however, material in certain pockets maybe watery causing foul smell during inspection on 27 April'11, low temperature may not have allowed its spread.

National Cold Chain Development Centre

• Center of excellence for cold chaindevelopment in India, and to help in reducingwastage of food products at various levels ofsupply chain and strengthen India’scompetitiveness in handling perishables.

• Autonomous body under the Ministry ofAgriculture

• Governing Council to have private and Govt.members in the ratio of half and half.

Training on cold storage operations and

ripening protocols

HRD- Graduate Engineers Training

Ministry of Food Processing Industries

(MFPI) Initiative

MFPI – Integrated Cold Chain

Infrastructure

• For Integrated Cold Chain, Value added Centers, PackagingCenter and Irradiation Facilities

• Infrastructure facilities without any break, from the farm gateto the consumer.

• Salient Features

a) Minimal Processing Centre at the farm level and this centreis to have facility for weighing, sorting, grading waxing,packing, pre-cooling, Controlled Atmosphere (CA)/Modified Atmosphere (MA) cold storage, normal storage andIQF.

b) Mobile Pre-cooling vans and reefer trucks

c) Distribution hubs with multi product and multi CA/MAchambers cold storage/ variable Humidity chambers, packingfacility, CIP Fog treatment, IQF and blast freezing

d) Irradiation facility

Pattern of release of grant

• 1st installment of 25% after 25% of the promoters contributionand 25% of the term loan spent on the project

• 2nd installment of another 50% after utilization of firstinstallment of grant and 75% of promoter contribution and75% of term loan. Utilization Certificate of the firstinstallment shall be submitted by the promoter at the time ofmaking claim for the second

• 3rd and final installment of remaining 25% after utilization ofthe second installment and 100% of promoter contribution and100% of term loan has been invested. Utilization certificate ofthe second installment shall be submitted by the promoter atthe time of making claim for the 3rd and final installment

• Implementation schedule would be about 18 months from thedate of the approval of each project

Warehousing Development and

Regulatory Authority (WDRA)

Accreditation for Cold Storage

Why Accreditation?

Storage Conditions for Potatoes

Fresh Potato Temperature Storage Period Relative Humidity

Early Crop 4 – 10°C 0 – 3 months * 95%

Seed Potato 3°C @ 5 – 10 months 90 – 95%

Table Potato 4°C 5 – 10 months 90 – 95%

For French Fries 7.2 - 10°C 1 – 10 months ** 90 – 95%

For Chipping 7.2-10°C # 1 – 8 months ** 90 – 95%

Commodity Storage Conditions

Group Storage Conditions F &V

1 0 to 2°C (32 to 36°F), RH

90-95%

Apples, Apricot, Grapes

2 0 to 2°C (32 to 36°F), RH

95-100%

Cherries, broccoli, cabbage, carrots, pears,

cauliflower, mushroom

3 0 to 2°C (32 to 36°F), RH

65-75%

Garlic, onion

4 4.5°C (40°F), RH- 90% -

95%

Tangerines, oranges

5 10°C (50°F), RH-85-90% Tamarind, cucumber, okra

6 13°C to 15°C (55°F to

60°F), RH-85-90%

Banana, papaya, lemon, mangoes, ripe

tomatoes

7 18°C to 21°C (65°F to

70°F), RH- 85-90%

Yams, sweet potatoes, mature green

tomatoes, water melon

Cold Storages Warehouses Manual

(Horticulture Produce and Processed Food Items)

• Application Form for Warehouse Accreditation

• Description of Cold Storage Warehouse

• Identity of Warehouseman and Capacity to DischargeLiability

• Goods to be Stored, Storage Conditions and InsuranceCover

• Managerial Competence

• Storage Worthiness of Warehouse

• Check List for Accreditation Agency

• Guidelines for Grading, Packaging, Marking andLabeling, Stacking and Storage

Commodities for issuance of NWRs

1. Table Potatoes (with or

without CIPC application)

10. Red Chilies 19. Pomegranate

2. Seed Potatoes 11. Almond 20. Onion (Fresh or

dehydrated)

3. Processing (Potatoes

With CIPC application)

12. Tamarind 21. Carrots

4. Apples 13. Date Palm 22. Garlic (Fresh or

dehydrated)

5. Grapes 14. Lemon 23. Dried Edible

Mushrooms

6. Raisins 15. Nagpur Mandarin 24. Ginger (Fresh

dehydrated)

7. Turmeric 16. Kinnow 25. Frozen Processed

horticulture Items in IQF

or Blast Freezing.

8. Cinnamon 17. Khasi/Darjeeling

/NE Oranges

26. Seeds & Bulbs

9. Coriander (Dry) 18. Sweet Lime

Concessions in duties

and FDI

Concessions in duties & taxes• Central Excise Duty: Full exemption for specified equipments

for storages or transport, self loading/unloading trailers/semi-trailers.

• Customs Duty: Full exemption for manufacture of refrigeratedvans/trucks; bio-polymer/bio-plastics; and concessional duty of5% for initial setting up or substantial expansion of a cold storage,cold room, processing

• Service Tax: Exemption for ‘Erection, Commissioning orInstallation’ of Mechanized Handling Systems; Cold Storageequipment; transport; Technical Testing; Analysis Service and‘Technical Inspection and Certification Service’ provided byCentral and State seed testing and certificationlaboratories/agencies.

• Foreign Direct Investment Cold Chain: Establishments alreadyin place

Trial

Multimodal Transport System

• Ground Truth: Bulk Transport of Banana, Onion, Mangoes,Potatoes taking place by BCN wagons

• Banana: Bhusawal - Azadpur/Kanpur

• Onion: Nashik - Kolkata /Fatuha /Guwahati

• Mangoes: AP - Azadpur

• Chikoo: Amalsad - Azadpur

• Potato: Agra/ Azadpur - Guwahati / Kolkata

Railway Presently Provides

a. 50% freight discount on parcel rate

b. Applies carrying capacity formula

c. Provides Assured Transit Time Facility

d. More than 5 hours loading time

Test Case for SPV – Multimodal Transport System

Fruit Movement

Inner side View- Insulation, Ventilation and

Doors

Ventilation Holes

Surface Insulation

3 Doors

Features of Specially Fabricated Freight Containers

for Long Distance Transport Solution for Fresh F & V

• Proper Thermal Insulation

• Proper ventilation

• Preference for Multi-modal Transport System

• Facility for Loading & Unloading at Railway

Sidings and at Warehouse Loading Platform

• Easy Switchover to Refrigerated System

• ISO Standard for Engineering Design

Loading in Bunches, Plastic Crates and CFB Boxes (Left Top, 3th August 2011) Azadpur Market Delhi (19 August 2011)

Horticulture Train

Prospect for cold chain development in

the next decade

Availability of Cold Storages

• India has 6,488 cold storage with a cumulative installed capacity of approximately 30

million Metric Tons

• More than 30% of the cold storage units (~10 mill tons) have been built in the previous

10 years and reports states another 30+ million tons capacity is to be built

• 12th Five year plan target 40 lakh MT for cold chain infrastructure & reefer transport

The gap in cold storage capacity in

various states

• Cold Storage Requirement: 611.30 lakh MT

• Present Capacity: 242.98 lakh MT

• Gap: 368.32 Lakh MT

Source: DMI & NSE study 2010

• 12th Five year plan target 40 lakh MT for cold chain

infrastructure & reefer transport

PHM-Cold Store Integration

(Value Chain)

Most of the cold stores are stand alone units (84%), only 16%being part of a network (value chain). Transport services were notprovided by 80% of the cold storage units. Of the 20% thatprovided transportation, 52% had an outsourced asset base.

High Operating Expenditure will see change

• About 28% of the total expenses for cold storages in India is

accounted for by energy expenses compared to only 10% in

the West

• About 30-35% of the losses can be reduced by transporting the

freshly harvested fruits and vegetables in refrigerated

containers or in suitable containers, crates etc.

• investment costs in the back-up systems of cold storages

further makes the setting up of cold storage difficult, unviable

and uneconomical

• Alternate sources of non-conventional energy to be tapped

Difference in reefer exports between peak

month and slack month per country

Role of Govt. in development process

Govt. policy interventions to develop

integrated Cold Chain

• No Clear cut policy on cold chain development, presently

• Need for Adoption of modern Technology in WarehousingBusiness Model of Cold Chain Infrastructure

• Enforcement of Technical Standards for Specialized / ReeferTransport System as regulatory tools for claiming subsidies

• Generating minimum critical mass of Skilled Man-Power

• Creating synergy for Indian produce and institutions

• Specialized Purpose Vehicle (SPV) for Cold Chain LogisticsInitiative

• National Centre for Cold Chain Development (NCCD)activation

Compliance cost and benefit to economy

- Pack house, Ropeways, Conveyor belts etc: 400

-Cold storage with mezzanine floors: 2,400

-Advance Cold storages: 640

-CA Storages: 1,440

-Onion storage: 750

-Refrigerated vans: 500

-Multi-modal transport system for horticulture produce: 100

-Fruit Ripening Chambers: 800

• Total: 7,030 (Rs. Crores in 12th Plan Working Group Report)

• Investment of about Rs 7,000 crore to go upto Rs 18,000crores, on the conservative estimates

• Sectors such as meat, fish, poultry, dairy products,confectionery and pharmaceuticals to double to Rs 40,000crores

Socio - Economic Impact of Cold Chain

• Farming Community getting better price encouragedtheir bargaining power

• Availability of large period of fruit like Apple 9months, Carrot & Lemon 5-6 months in onionthrough out of the year

• Diversification and improved quality of processedpotato and seed potato

• Wide verities of F&V imported through cold chain

• Enhancement of processing industry raw material andLCC

Synergy with other Institutions

• Indian Research Centers: CPRI (Potato Storage), CISH

(Mango Protocols) helped. ISHRAE, ASHRE can

provide inputs for critical areas

• International: GCCA for basic concepts & conditions

through WFLO, IARW, IART. India member to IIR,

Paris. GeorgiaTech Cold Chain Management & logistics

Courses; Cold chain management, Assessment and Audit,

Strategies for Successful handling of Fresh Produce,

Integration.

• Integration through Knowledge sharing and awareness by

CII, FICCI etc.

Possibility for generating synergy• Firming up critical storage condition for fresh Fruits &

Vegetables for Indian conditions taking for to accountlocally produced varieties of F&V and agro-climaticcondition; so far we have been adopting WFLO standardswithout fine tuning them for Indian conditions.

• Economically viable technology solutions in terms ofintegrated cold chain for tropical fruits like mangoes,banana and mandarin; so far cold chain technologysolutions are, generally, not fitting into economics of trade

• HRD for all levels of industry – may be with help ofexisting institutions.

• Bring cold stores under Warehousing RegulatoryAuthority system for credit receipts (initially apple, potato,spices etc)

Thank Youdirectornhb@yahoo.com , sharmark54@yahoo.com