India needs to mobilise large-scale investment into cold storage, refrigerated transport & other modern logistics to modernise its food supply chain.
India grows enough food to meet the needs of its entire population, yet is unable to feed millions of them, especially women and children. India ranks 100 in the Global Hunger Index (GHI) — 2017 of 119 countries, where it has consistently ranked poor. Even as millions of Indians go to sleep on an empty stomach, the country wastes food worth a whopping Rs 58,000 crores in a year — about seven per cent of its total food production. It is lost during production, processing, retailing and consumption.
One of the major ways of addressing food insecurity is controlling wastage. It’s the most obvious place to start. India is the second largest producer of vegetables and fruit but 25 per cent to 30 per cent of it is wasted due to inadequate logistical support, lack of refrigerated storage, supply chain bottlenecks, poor transport and underdeveloped marketing channels. The Food and Agriculture Organisation (FAO) puts this figure at around 40 per cent — worth around $8.3 billion.
Twenty-one million metric tonnes of wheat — almost equal to Australia’s production — rots each year due to improper storage. According to the Associated Chambers of Commerce, the country experiences a post-harvest loss of Rs 2 lakh crores annually due to lack of food processing units and storage facilities. Without improvements to its “cold chain” infrastructure, from farm harvest to table, India’s food problems will remain highly critical.
The World Bank recently warned that 60 per cent of the country’s food subsidies do not reach the poor; they are sponged by middlemen. It is high time the government made some fundamental changes. Reforming the faltering public distribution system or plugging the leaks that sponge precious aid destined for the hungry and malnourished is overdue.
The Food Corporation of India (FCI) was set up in 1964 to offer impetus to price support systems, encourage nationwide distribution and maintain sufficient buffer of staples like wheat and rice but has been woefully inadequate to the needs of the country. Around one per cent of GDP gets shaved off annually in the form of food waste. The FCI has neither the warehouse capacity nor the manpower to manage this humongous stockpile of foodgrains. Every year, the government purchases millions of tonnes of grain from farmers for ensuring they get a good price and for use in food subsidy programmes and to maintain an emergency buffer. The cruel truth is that most of it has to be left out in the open, vulnerable to rain and attacks by rodents, or stored in makeshift spaces, covered by tarpaulin sheets, creating high rates of spoilage. Several countries are now using metal grain silos to guard against fungus ruining grain stock.
According to the agriculture ministry, Rs 50,000 crores worth of food produced is wasted every year in the country. One million tonnes of onions vanish on their way from farms to markets, as do 2.2 million tonnes of tomatoes. Tomatoes get squished if they are packed into jute sacks. Overall, five million eggs crack or go bad due to lack of cold storage. Just three states — Punjab, Madhya Pradesh and Haryana — grow most of India’s grain, and the food has to be transported to far-flung areas.
A study undertaken by the Indian Council of Agricultural Research (2013) highlights that the underlying cause of post-harvest loss in the country is the lack of infrastructure for short-term storage, particularly at the farm level, as well as the lack of intermediate processing in the production catchments. If there are no proper roads linking fields to markets, farmers cannot easily sell their surplus produce, which may then spoil before it can be eaten. Improving road and rail capacity enables farmers to reach buyers — and fertilisers and other agricultural inputs to reach farmers.
The study estimated that around 67 million tones — of the value of around Rs 92,000 crores — are wasted in India every year. That’s more than the national average of Britain, the entire food requirement of all of Bihar for a year. In terms of monetary value it is nearly two-thirds of the amount that the government needs to feed 600 million poor Indians with subsidised ration under the National Food Security programme.
A recent study conducted by the Indian Institute of Management, Kolkata has uncovered that only 10 per cent of perishable produce get cold storage facility in India. These are mostly used for potatoes to meet India’s robust demand for chips. This, along with inappropriate supply chain management, has resulted in India becoming a significant contributor to food wastage both at pre and post-harvest waste in cereals, pulses, fruits and vegetables. The study estimates that India needs storage facilities for another 370 million metric tonnes of perishable produce.
Apart from the wastage of the food produced, the resources lost in the form of inputs during food production are also considerable. According to the United Nations, India is estimated to use more than 230 cubic kilometre of fresh water annually — enough to provide drinking water to 100 million people a year — for producing food items that are ultimately wasted. Besides this, nearly 300 million barrels of oil used in the process is also ultimately wasted. Taking all these into account, the actual worth of money per year in India from food wastage is a whopping Rs 58,000 crore ($9 billion). Meeting the food needs of a growing population in India (1.7 billion by 2050) while reducing food loss and waste poses a serious challenge. Wasting a kilogramme of wheat and rice would mean wasting 1,500 and 3,500 litre of water respectively that is consumed in their production.
The World Economic Forum cautions that food shortages are likely to cause one of the biggest risks to global stability over the next decade following extreme risks posed by climate change.
In recent years, numerous initiatives and interventions have been undertaken by the Indian government, local and international actors to target food losses and waste across the agricultural value chain. For instance, the Indian government is seeking to streamline and modernise agricultural value chains, through reformation of the PDS to reduce waste and loss associated with the distribution and storage of foodgrains. The government is also extending support for the setting up of cold chain projects whereby 138 cold chain projects have been installed.
Studies have also indicated that on-farm interventions can contribute to reducing food losses and waste. For instance, a pilot study sponsored by the Bill & Melinda Gates Foundation has revealed food loss reductions of around 60 per cent during field trials testing low-cost storage techniques and handling practices. Another study undertaken in Punjab that focuses on the harvesting of kinnow (a citrus fruit) demonstrates how on-farm food losses decreased from 10 per cent to only 2 per cent when a combination of harvesting techniques were used.
India has developed some modern supply chains linked to food processing companies, such as Nestlé, Pepsi Unilever and Del Monte. But these handle only a fraction of the country’s perishable food.
India needs to mobilise large-scale investment into cold storage, refrigerated transport and other modern logistics to modernise its food supply chain. That is the prime need if we want to really address the problem in right earnest. More than investment we need a strong will of the political class and imaginative thinking on part of the policy planers. We have the resources but need to summon our determination. Fixing this problem will solve many of our related issues, particularly poverty, hunger and malnutrition, and open the gates to a new and prosperous India.
The writer is a well-known banker, author and Islamic researcher. He can be reached at email@example.com