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.

War Games with COVID19

The vaccine to end all vaccines, or something like that, could start rolling out for the public-at-large in just a matter of months. This could be seen to bring relief ... fingers-crossed …  from becoming an inadvertent host to this coronavirus. 

Yet, it will be more appropriate if the vaccine is not perceived as a personal condom to safeguard selected individuals from COVID19, but is seen as the mainstay of a program to eradicate the virus.

There is a fine distinction between a personal prophylactic against disease and achieving population scale immunity to stop the spread of a disease. Enmasse, entire populations or around 65 to 75 per cent as the scientists tell, must be inoculated (and in quick-time) to rid us of COVID19. 

Prepare to Spread the COVID-19 vaccine

The COVID-19 virus is showing all indications of disrupting every individual’s life habits. While social isolation is largely voluntary so far, the fear of the disease is also coercing some to ostracise others who may show related symptoms. The helplessness factor has also initiated a blame-game of sorts, with a few even allocating this corona virus a nationality. Some people are seen to discover religion anew, and many others have displayed acts of kindness, reported from around the world.

This raging pandemic has left everyone focusing on one hope, to ‘dampen the curve’ of the infected. The idea is, to buy time, so that local healthcare networks can ably cope with the numbers expected. Sadly, that means that a lot of pain also abounds, and it is most unfortunate doctors are had to resort to triage – selective treatment of the ill – due to high load on the medical system in a few regions.

FACE2FACE - Partnerships 'tween private & public sectors can drive excellence

Answers - Capt Pawanexh Kohli, former CEO of NCCD & Chief Advisor to DAC&FW. He was knowledge partner & member of the Committee on Doubling Farmers Income and is conferred the title of Professor (Post-harvest Logistics) by the University of Birmingham.

Questions - Ramesh Kumar, veteran business journalist and author of Naked Banana, 10000 Km on Indian Highways and more. His penmanship is also held at the US Library of Congress and he is a well-known evangelist of India’s logistics & supply chain operators. 

Excerpts from an extended dialogue between Ramesh Kumar and Pawanexh Kohli – about recent developments in cool logistics, his exit from NCCD and more...

Farm Productivity is not an End in Itself!

Heard at a recent lecture, the expert recommendation that India should direct greater resources for raising the field level productivity of crops, to alleviate two core concerns: the food security needs of the nation and to improve incomes for farmers. 

As someone who might have believed in these platitudes till a few years ago, I think it is imperative to set some records straight, and offer a more nuanced picture.

While one cannot ignore the 'general sense', it should be understood that productivity in itself is not a 'silver bullet', and except at individual enterprise level, such focus is in many ways contraindicated.

General Queries on Cold-chain

1. What are the components of well-designed cold-chain system?
Simply explained, a good cold-chain is one that is designed to integrate the entire set of activities needed to transfer the harvested or produced value from source to consumer, while ensuring all climate controls for the value under its care. Such a system would also safeguard the environment, be efficient in managing waste and comply with food safety standards.

Logistics Connectivity is Key to Reduce Food Loss

Food has one end-use, to be consumed...food loss or waste occurs when food left unconsumed - or, when food perishes before it could reach the market within its normal saleable life cycle.

Food loss can be reduced... only by ensuring that all the harvested produce reaches its logical end use. This means that food delivery mechanisms must also aim to counter the perishable nature of food, to extend its saleable life cycle.

Perspective on India's Cold-chain

India has developed an enviable capacity in the cold storage format across the country. As per the 2014 report of IARW (International Association of Refrigerated Warehouses), India had 131 million cubic metres in cold storage capacity, overtaking USA which has 115 million cubic metres. China has the third largest capacity globally with about 76 million cubic metres in cold storage space. The worldwide capacity in refrigerated warehouses was reported as 552 million cubic metres in this report by IARW. Between May 2014 and July of 2015, India added another 200 units or a little more than one million tons to its cold storage space. Though about 5% of the facilities may have become obsolete over the years, India can now lay claim to having created almost 7200 cold stores equivalent to about 33 million tons in holding size, most of these over the past decade.

Shelf life is not storage life

Holding period in a warehouse is opportunity lost.

Keeping food secure for long is not always a worthwhile achievement... making sure it arrives for gainful end-use is the real target. Aim to make sure you reach the consumer - get on the shelf!

Segregation is good… sometimes

Cold chain operators are usually counselled that they must segregate goods in the cold-chain.

The need to segregate stems from the fact that fresh farm produce is frequently incompatible with one another, and is good practice to mitigate risk of damage & food loss.

Segregation is important in the cold-chain

Cold-chain is not only about cooling alone but must look at various compatibility aspects between different species of the goods involved. This is in particular the case when handling fresh fruits and vegetables. Unlike aseptically sealed foods, the packaging of fresh produce has to allow access to the surrounding air and therefore makes it susceptible to tainting, moisture loss and biological triggers.

Cold-chain is about Speed!

Frequently cold-supply-chain strategists are asked to help develop models for a laudable vision, one that envisions a revenue multiplier for farmers-producers. This Vision is typically presented alongside tactical options, those that focus on enabling small farmers to offset their sales by storing their weekly or seasonal produce, thus avoiding peak season price drops. This is also expected to avoid distress sales due to low shelf life of the perishable produce.

Ergo the cold-store, which is viewed as a buffer space that can extend the trade opportunity, conceivably offering safe, risk free storage and defer the sale to a more favourable future date. This tactic lends itself to the core premise that the buying markets will pay a higher value at a later date, when supply patterns are low.

El Niño story

In December 2014, the Japan Metreological Agency had declared the onset of El Niño, on the basis of a rise in the ocean temperature alone, though other atmospheric conditions had yet to manifest. In March 2015, the Climate Prediction Center of USA confirmed the arrival of the El Niño conditions. Though these conditions are weaker than expected, and have manifested much later than was foretold, scientists have predicted that 2015 will be the hottest year in recorded history.

The El Niño effect results in not just a momentary peak in air temperatures, but higher than expected temperatures that can last for weeks! At the last major El Niño in 1998, the Indian Ocean temperatures rose by 3°C with associated weather impact. We shall have to wait and see how the 2015 predictions fructify, for a final measure of the extent of increase in temperatures. The eventual impact to India, of a 'minor El Niño' event, is not always correctly predictable due to various factors. Nevertheless, cold-chain users are advised not to take lightly any preliminary forecast of hotter than normal temperatures. 

Preparing for hot temperature operations:

The Chain, Interrupted or unInterrupted

Cold-chain value systems and options to be considered by planners. (also see Visions and Value chains)

1. The strategic business interest & capability of any concerned enterprise will define the scope and extent of the value chain of each such enterprise. Frankly, the involved models are easily differentiated and would extend across the following two basic categories-

 

a. Uninterrupted farm-to-fork sourcing and distribution of agricultural produce, especially perishables, wherein the fresh whole food does not undergo any change to its primary and natural characteristics. This value chain system is empowered with the agri-logistics intervention that services an out-reach into multiple markets through connectivity. This market link is key to generate a revenue stream that is volume based, and in turn feeds improved post-harvest handling, resultant growth in produce quality & productivity and also offers scope to stabilise demand-supply fluctuations.

Visions and Value chains

Cold-chain development is commonly debated over round table discussions, mostly by business researchers and prospective financiers. The non-inclusion of practical domain experts can tend to make these discussions academic about value chains and the result is a wizardry of numbers. This happens frequently, largely because there are merely a handful of strategic experts who have partaken across the wide range of functions that make the cold chain - it truly is a niche sector! However, the cold-chain is increasingly taking importance as the heart and centre of food security in our future, and such discussions need to move from the rhetoric into the realm of reality.

[There is real need to include operative considerations – after all, even the original round table of King Arthur had a functional head with fighting knights on board, and only one wizard]

Pre-conditioning fresh farm produce

What the budget proposal means for cold-chain. 

(Union Budget of India 2015-16)

It is amply clear that to properly utilise the cold-chain, and to initiate a supply of fresh farm produce to consumers, the supply chain operator, at the source end (farm gate), needs to prepare the harvested produce for travel from farm gate to market. This involves pre-conditioning procedures (e.g. washing, waxing, de-sapping), retail packaging and labelling, pre-cooling, before undergoing climate controlled storage and transportation and ripening. None of these measures alter the essential characteristics of agricultural produce as no food processing is involved – the farm produce is delivered fresh and whole, from farm to market. These preconditioning procedures make it possible for agricultural produce to be marketed more efficiently and help to reduce losses in supply chain and to prolong the freshness of produce. 

Under the provisions in India’s Finance Act, in regards to service tax (see Section 66D (d) (iii) of Chapter 5 of Finance Act 1994 and Chapter VA of Finance Act 2003), processes carried out at an agricultural farm which do not alter the essential characteristics of agricultural produce but only make it marketable for the primary market do not fall under the Negative List. However, elsewhere (Section 65B(5) of the Act), “agricultural produce” is defined to mean any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer.

Indian agriculture and G20

This February, the Group of 20 (G20) Development Working Group (DWG) holds its first meeting in Turkey. The meeting is the start of many, to prepare for the G20 leadership summit in December 2015. Agriculture and an understanding of next steps in this sphere, is an important matter for discussions. Under the framework of the Food Security Network (FSN), some of the items to be discussed – responsible investment in food systems, enhancing quality employment and incomes in agriculture, expanding food supply and sustainability are key topics.

In all these subjects, the Indian development records important examples, in terms of best practises followed, and the experiences and learnings that resulted. The G20 will do well to take cognisance of the India story, especially in the for agriculture area including cold-chain sector.  Let us touch on what Indian agriculture brings to the G20 table-

Brazil's diet guidelines & impact

On 5th October 2014, the Government of Brazil published the new Dietary Guidelines for the Brazilian Population replacing the previous Guidelines issued in 2006. The formulation of these guidelines included multiple meetings involving researchers, health professionals, educators, and representatives of civil society organisations from all regions of Brazil. Earlier the draft Guidelines were subjected to public consultation, which resulted in thousands of responses, including from universities, public bodies, professional representative organisations, the private sector, and from health professionals and individual citizens.

The recommendations issued in the Guidelines are based on evidence from different sources, including experimental, clinical and population studies, and also on natural experiments implied in the selection and adaptation of dietary patterns evolved over many generations.

Definitions are for convenience

At a recent formal discussion of a PPP proposal, the attending resource persons (consultants from one of big 5), rather categorically reasoned that food processing is not a part of cold-chain business and hence such units were not considered in the project under debate. Hearing such blanket statements is a very distressing experience, particularly when long term plans are being developed with the overarching aim of public good. Such single-minded differentiation between cold-chain and processing units stems from an academic or research bent of mind, inexperienced in matters of business. 

Yet, if the aim is optimal utilisation of resources, with profitability and success in mind, then these narrow interpretations need to be shed and put aside, firmly. In the world of commerce, reason relates to align opportunities, maximise revenue, increase profitability options - common business sense.

Decisions, decisions...Pack-house play

A modern pack-house is the initiator of the cold-chain for fruits and vegetables, and a cold store the midway platform. A pack-house is effectively the intelligent nerve centre of cold-chain, and it inherently sets off multiple logistics or supply lines catering to various demand centres. At such a pack-house, after the harvest is sorted into marketable or value based lots, they are then directed into different elemental value chains, some to continue within the cold-chain and some without.

©Pawanexh Kohli

Cold-chain in relation to Food losses

Cold-chain does not directly reduce food loss - it is incongruous to proceed with that as the key premise. Cold-chain can only help take food to intended uses, preferably directly from farm-to-fork.

Food has one use, to be consumed, and food is lost when not consumed. Food loss can be reduced by facilitating that the produce reaches all logical and feasible end uses.

The idea of cold-chain is not to preserve endlessly, it only applies technology to extend the marketable life of a perishable product, for a finite duration.