Post harvest losses may cross Rs. 2.50 lac crore by 2013-14

Though India has attained the second highest position after China in producing vegetables and fruits in world, the post harvest losses touched an alarming amount of Rs. 2.13 lac crore in 2011-12 and may cross Rs. 2.50 lac crore in 2013-14 according to the ASSOCHAM study.

The research team engaged by ASSOCHAM found that 30% of fruits and vegetables were rendered unfit for consumption due to spoilage after harvesting, virtually negligent attitude towards post harvest losses, absence of food processing units and unavailability of modern cold storages.

The post harvest losses were calculated on the basis of production and wholesale market price among the states. The research-team found that among the major producing states, West Bengal incurred highest loss of Rs. 13,657 crores followed by Gujarat Rs. 11,398 cr, Bihar Rs. 10,744 cr and Uttar Pradesh Rs, 10,312 cr.

The other states were Maharashtra Rs. 10,100 Cr., Andhra Pradesh Rs. 5,633 cr., Tamil Nadu Rs. 8,170 cr., Karnataka Rs. 7,415 cr., and Madhya Pradesh Rs. 5,332 cr.
Mr. Rana Kapoor, President ASSOCHAM commented that, “India’s current levels of food processing continue to be low in perishables categories like Fruits and Vegetables (2-3%), Poultry (6-8%), Fisheries (10-12%). This can be turned around by adopting innovative institutional mechanisms to upscale both our warehousing and logistics infrastructure with the objective of harnessing the efficiency of both public and private sectors including effective collaborations under principles of PPP. The “Vision 2015” plan put forth by the Ministry of Food Processing Industries (MoFPI) envisages tripling the size of the processed food sector by increasing the overall level of processing of perishables to 20 percent. This shall entail significant capacity creation in the food processing sector- with the twin objective of enhancing shelf life of produce as well as reducing wastages. I see this as a case for turning ‘adversity’ into ‘opportunity’.”

The study observed, that towards the end of 2012, the total cold storage capacity is 301.1 lacs mt which is only 12.9 percent of fruits and vegetable production. The additional requirement of cold storage in India is 368.32 lac tonnes which is 151.6 percent of existing capacity. The existing cold storage capacity is available only in the wholesale markets or closer to the wholesale market. Whereas the majority of fruits and vegetable are sold at the local market or regional markets thus these markets does not have facility of cold storage. Therefore, the shortage cold storage also generates huge wastage of fruits and vegetable.

Similarly, wholesale market development is very important factor for reducing the post harvest losses. Wholesale markets improve efficiency in food distribution by encouraging competion through creating conditions for transparent price discovery at relatively low costs and by enhancing access to market information for various actors. Where multiple equilibrium prices occur for a single commodity because there are no wholesale markets, price transparency is undermined and transaction costs rise.

The increasing trend of fruits production has brought in its wake being new challenges in terms of marketing of produced goods as soon as possible because perishable in nature. At present only 22.3 percent only 22.3 percent of produced fruits and vegetable reached to the wholesale market in India.

The wholesale markets of fruits at all India level increased by 10.9 percent during 2008-09 to 2011-12 (number of markets increased from 685 in 2008-09 to 760 in 2011-12). However inspite of market development, market reach of the fruits has declined by 44.1 percent during the same period.

The market arrival of fruits among the top the five producing states shows, Andhra Pradesh registered highest compound annual growth rate (CAGR) of 85.0 percent during 2008-09 to 2011-12 followed by Karnataka with 23.4 percent growth rate. Whereas other top producing states such as Tamil Nadu, Gujarat and Maharashtra (Maharashtra is the largest producer of Fruits in India) have registered negative compounded annual growth rates of 81.5 percent, 27.5 percent 10.4 percent respectively.

Maharashtra is the largest producer of fruits but the cold storage capacity available is very low i.e. 5.47 lac tonnes which is less then 25 percent of market arrival of fruits alone and the additional required cold storage facility is 57.26 lac tonnes.

The numbers of wholesale markets for vegetable sector in India increased from 1002 in 2008-09 to 1087 in 2011-12. At the same time, market arrival has registered nominal growth of 2.17 percent period whereas production has registered very high growth rate (47.0 percent). At present only 17.8 percent of produced vegetable reached to the wholesale markets. The lower reach of market arrival has many implications such as producer cannot realised actual market value & price, puts pressure on price of product at the consumer end etc.

The market arrival of vegetable among the top five producers reveals, Madhya Pradesh registered highest growth (Compound Annual Growth Rate) of 57.3 percent from 2008-09 to 2011-12 followed by Uttar Pradesh (15.6 percent), Andhra Pradesh (8.6 percent) and West Bengal (6.8 percent).