India is one of the largest producers of over 80% of agricultural products, including cash crops like coffee and cotton. But largely due to storage, logistic and financing infrastructure inadequacies, harvest and post-harvest losses of major agricultural produce is estimated at Rs 92,651 crore ($13 billion), according food processing ministry data of August 2016. If these were prevented, over 5 crore people could be fed, for a year, at the rate of Rs 50 per day.
While post-harvest losses vary depending on crops, agricultural practices, climate, etc, storage is usually the primary reason in most cases. Most harvested grains, fruits and vegetables are stored in traditional structures, made of grass, wood or mud, without any scientific design, and cannot protect crops against pests and decay. As a result, a bulk of stored commodities is lost to insect infestation, rotting and mould growth. It is reported that only 10-11% of fruits and vegetables cultivated in India use cold storage due to the expense involved and lack of suitable facilities.
Finance is another setback. To avert storage woes, due to the lack of finance and liquidity, farmers are compelled to sell their produce immediately, within days of harvest, at any prevailing rate. Due to supply glut in the market immediately after harvest, farmers do not realise the best price.
Transferring goods from cultivation centres to processing centres or markets is an impediment. Due to inadequate transportation infrastructure, commodities get damaged through bruising and bad roads, spillage due to repeated loading, unloading and contamination, and heat and humidity in the absence of cold chain transportation.
Tech intervention through improved storage structures and logistics can reduce post-harvest losses and increase farmers’ revenues. Use of hermetic structures and cold chain transport facilities can reduce post-harvest losses, maintain freshness of fruits and vegetables and seed viability, and retain the quality, according to the National Center for Biotechnology Information.
Using scientific storage facilities is the panacea. It prevents storage losses and facilitates funding of post-harvest activities. Warehousing receipts, from certified warehouses, can be used as collateral for funding from banks and lending institutions. Thanks to the Warehousing (Development and Regulation) Act of 2007, which came into force from 2010, banks are advancing over `40,000 crore against warehousing receipts; it was just `5,000 crore a decade ago.
These loans enable farmers to access the funds they require, and meet consumption needs and working capital requirements, like purchasing inputs for next season and transporting goods. They can also monitor market prices and sell their produce, wholly or partly, when prices reach suitable levels.
Even the issue of transportation is ameliorated by securitising warehouse receipts, as the funds enable farmers to finance and manage logistic chains better. Eventually, the cost of better transport systems is more than compensated for by considerable reduction in losses during transportation.
Sudip Bandyopadhyay, Group Chairman, Inditrade. Views are personal