25 Jan 2021

Visoning the Cold chain in 2021

 Farming can no longer be relegated merely to serfdom functions of cultivation, rearing, harvesting or catching of produce. Production alone cannot be seen as a sufficient condition! The new favoured approach includes ensuring that the production off farms is translated into wholesome delivery at demand side. A long overdue emphasis on post-production activities is coming to fore. 

Production delivered, in-full, in-quality and in-time, is farming fulfilled; naturally demanding that agri-logistics be seen as a secondary agricultural activity. This is why, in case of high value perishables cold-chain is imperative. It is the sole means to safely handle and transfer perishable value in the post-production phase of their marketable life-cycle. Farm production, to varying degrees, is dependent on biological factors but once harvested, the perishable produce must connect with consumption and within a predetermined time-line. By perishables, I include in meaning all fresh produce with an inherent expiry – such as fruits, vegetables, meats, fish and milk. 

A surreal dream becomes a persuasive vision... when it is rooted in some tractable ground realities.

 Some material dimensions on ground have slowly improved over years and a few were accelerated in this year gone by. New pathways for the cold-chain sector have surfaced by way of renewed government support in the form of an agri-infrastructure fund, reforms in agri-marketing and essential commodities acts and fresh focus on organising the farmer-producers such that village communities can interlink clustered and associated activities in an enterprise format. 

The common counter to inherent limitations of perishability and demand, is the narrative that speaks of value added products – to convert the raw fresh produce into longer lasting products using preservative processes. However, the pandemic in 2020 has again brought to fore that the Indian consumer has a deep-rooted preference for fresh produce, which is often seen to be more nutritious and aids the body’s resilience to disease. 

The market for fresh meats, fish, milk, fruits and vegetables already ranks a high 90th percentile. This fact should not be disregarded, as it is to the advantage to associated Indian farmers. When the market is ready to accept food in fresh whole format, the situation is optimal for the farmer-producer; s/he does not need to access consumer demand through any intermediary processor, who essentially create a new product under new ownership and delink farmers from the terminal market value. 

Cold-chain in contrast, can directly connect and supply the farmer’s fresh perishable produce to any demand centre; cold-chain does not add value to the produce but adds value to the farmer-producer. In fact, if an item of value has ready demand, there is no need to push value added processing unnecessarily. Cold-chain is merely a logistics service, and by itself is a value added service, where the basic unit of value (produce) is not tampered with, but is communicated to a time or place where the price is right! If modeled right, it merely counters perishability limitations and serves as a conduit between farmer and consumer, to the immediate advantage of both. 

Farmers produce the food, but it is the truck driver who is the deliverer of food 

However, this enabling premise was not visible in practice, since our farmer-producers did not have recourse to such agri-logistics services. This denied them from direct access to a terminal wholesale market of their choice, and s/he was forced to sell their produce at first instance. Forced to dispose their produce close to farms, they could only capture the price that prevailed in the proximity of farm-gate. That same produce, could otherwise be fetching prices in multiples, at distant out-of-reach markets. 

Even if the perishable produce could be stored for a later date, the market radius remained anchored to the vicinity of farm-gate. When it was time to evacuate such stores, the lack of farm-to-terminal market connectivity remained, and this did not change the seller-buyer ecosystem over time. Instead of a direct delivery service, there arose a series of hand-offs, with unnecessary intermediary custodians and associated food losses. 

However, the reforms propagated in 2020 are aimed to rectify such anomalies. They lay the substructure on which cold-chain services can be built, to empower farmers with logistics connectivity and market choice. Essentially, the farmers should have the capacity to traffic their perishable produce to demand centres of their own volition, and in their own name. 

These options are not foreign in concept, but very common in other trades. Even small artisans and enterprises can avail a logistics service (say a courier) to dispatch their product to demand, invoiced in their name, with buyers paying the delivered price. This is also facilitated by the ‘flipkarts’ and ‘amazons’ of the world, where the small manufacturer pays a fee for the distribution and delivery services, to connect with demand, anywhere. 

Production delivered, is productivity fulfilled 

Thanks to the reforms and schemes last year, circumstances now exist – whence, if pursued and developed rightly – a similar producer-owner model of marketing can flourish for small farmers. This will require organising the fresh produce supply chain at the first-mile, at village level, on priority; so that the entire perishables supply chain gets optimised and across all metrics. This vision for the cold-chain will be on track if in 5 years, 5 per cent of our farmers could sell into 5 different markets in that year. 

Vision 2021 

The vision for 2021 is that many thousands of village level aggregation platforms, not unsimilar to milk pooling points, start getting created in the country. Already included in the national infrastructure pipeline, titled as GrAMs (gramin agricultural markets), there is a target of developing 22,000 of them. Their primary function is to aggregate and package the produce, for subsequent dispatch to any market or store in the country, besides also modernising local retail sales. These platforms will incorporate pre-cooling and short term storage, to stage onwards supply to the national market. The farmers can contract this service from a near farm facility, to initiate a sale at the remote market instead of selling locally at depressed prices. 

Concurrent to these, the porting development of reefer transport is envisioned – on road, rail and waterways. The year 2021 should bring the commencement of a phase of agricultural development which focuses on pack-houses at GrAMs that are dynamically interlinked with various transport modes. 

There can be no industrialised world or smart city, without assured linkages with agricultural regions. 

Much of the industrial world has progressed into a position where they increasingly rely on external supply of food and feedstock from agrarian states. As mankind progresses further, the agricultural sector will define such growth and agricultural logistics will gain more geo-political and geo-strategic importance. 

Cold-chain is the key enabler that links people physically disconnected from agriculture with their nutrition. 

Without cold-chain, surplus production is wasted, and with cold-chain the world is made accessible to the producers. Access means consumers, and that means gainful production. Cold-chain is what will allow for productive growth in livestock, fishery and horticulture. 

As India marches ahead, it demands quality and new markets, and the future of cold-chain in India is inevitably bright; albeit with the pangs of a new birthing and the lack of appropriate domain skills that it currently suffers. I see 2021 as the harbinger of a beginning, of a future dotted with cold-chain networks, modelled in hubs and spokes, extending beyond our shores, communicating the 'Produce of India' to global consumers. 

The vision is a cold-chain that has a delivery bias, to progressively expand the marketing radius of the farmers that encompasses the world and stores only to buffer the trade. In my view, such development will be the foundation of a network that will directly connect the Indian village with the global village. 

Surreal or realistic – time will tell; nevertheless it is possible, if recent reforms are taken-up as triggers to fast-track implementation and to develop of a new value system. A new market architecture, where empowering logistics services are enabled for famers, is already long overdue. 

...published in Agriculture Today, January 2021 

No comments:

Post a Comment

Contribute through suggestions and comments