Food Production & market opportunity

From a talk at Thaifex 2013 - World of Cold-chain Conference

No one can deny that India’s food industry is undergoing massive transition and its intention of being a major player in the global supply of food.  In order to achieve this goal, policy makers are looking across the board at the daunting task at hand whilst recognising the need to also bring the agriculture sector in to the 21st century.

Yet it does not matter how good a product is, or how sophisticated or productive an agricultural area is, if a farmer or manufacturer cannot get their product to market or on the retail shelf… all their efforts turn out in vain.

Currently the progress in the food industry is quite uneven. The ever growing middle class with their specific demands, local and international food companies all wishing to meet those aspirational needs, the regulatory agencies making massive strides towards a complete overhaul of the food industry is all inextricably coupled to the struggling logistics infrastructure already pushed to the limits.

Budget & Infrastructure: Questions

1.  As this is a well known fact that this sector leads to wastage in agricultural produce due to lack of cold storage infrastructure, what infrastructural framework is required to boost the growth of this sector? 

Infrastructure that is developed should complement the concept of cold-chain. The query itself reflects the nascency in understanding and the prevalent misconceptions by limiting the concerns to the storage aspect alone. A cold storage warehouse is merely the middle link in the chain. If the initiators of cold chain are missing, the storage will automatically function only for select products and those that happen to originate in the cold chain (ie. imports). Our cold-chain, as it has developed, serves well for imported produce and for processed foods. For similar benefits to accrue to our domestic agricultural produce, cold chain originators and other complementary links should be the first priority.

2.  FM has taken an initiative to make Rs 5000 crore available to NABARD to finance construction of warehouses, godowns, silos and cold storage units designed to store agricultural produce, both in the public and the private sectors this year. What is your take on this? Is this figure is sufficient for the warehousing sector?