Wednesday 25 May 2022
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Govt promoting cold chains to fight agro product losses

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New Delhi: A study conducted by the Central Institute of Post-Harvest and Technology (CIPHET), Ludhiana, has estimated that the annual value of harvest and post-harvest losses of major agricultural produces at the national level was of the order of Rs 92,651 crore, based on production of 2012-13 at 2014 wholesale prices.

The Ministry of Food Processing Industries is implementing a central sector scheme, namely the for Infrastructure Development for Food Processing, having components of mega food parks, integrated cold chain, value addition and preservation infrastructure and modernization of abattoirs, to address the issue.

A cold storage facility

Under the scheme, 135 integrated cold chain projects have been sanctioned by the ministry with the cold chain capacity of 4.75 lakh metric tonnes of cold storage/controlled atmosphere/modified atmosphere storage, deep freezer, 114.75 MT/h of individual quick freezer, 120.05 lakh litre per day of milk storage/processing and 787 number of reefer vehicles.

The government is also providing various incentives to promote creation of cold chain infrastructure to reduce the loss of agricultural produce.

The services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables have been exempted from service tax in Budget 2015-16.

Loans to food and agro-based processing units and cold chain have been classified under activities for priority sector lending as per the revised guidelines issued on 23 April 2015.

Under Section 35-AD of the Income Tax Act, 1961, deduction to the extent of 150% is allowed for expenditure incurred on investment for setting up and operating a cold chain facility and setting up and operating warehousing facility for storage of agricultural produce.

cold chainThe government has extended project import benefits to cold storage, cold room (including for farm-level pre-cooling) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat. Consequently, all goods related to food processing, imported as part of the project, irrespective of their tariff classification, are now entitled to uniform assessment at concessional basic customs duty of 5%.

Refrigeration machineries and parts used for installation of cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat under Tariff Head: Chapter 84 are exempted from excise duty.

Construction, erection, commissioning or installation of original works pertaining to post-harvest storage infrastructure for agricultural produce, including cold storages for such purposes, are exempted from service tax.

Capital investment in the creation of modern storage capacity has been made eligible for the Viability Gap Funding of the Finance Ministry. Cold chain and post-harvest storage has been recognized as an infrastructure sub-sector.

Under the of Cold Chain, Value Addition and Preservation Infrastructure of the Ministry of Food Processing Industries, stand-alone cold storages are not assisted. The financial assistance is provided for creating an integrated cold chain having components of cold storage, minimal processing and reefer vehicles etc.

The National Centre for Cold Chain Development under the Department of Agriculture, Cooperation & Farmers Welfare has conducted a study: All India Cold Chain Infrastructure Capacity (Assessment of Status & Gap). According to the study, the cold chain requirement in the country stands as follows:

Type of infrastructure Infrastructure requirement (A) Infrastructure created (B) All India gap


Cold storage* 35.10 million tonnes 31.82 million tonnes 3.28 million tonnes
Pack-house 70,080 units 249 units 69,831 units
Reefer vehicles 61,826 units 9,000 units 52,826 units
Ripening chambers 9,131 units 812 units   8,319 units

*The gap may be 8.25 million tonnes considering the operational capacity of 26.85 million tonnes.

The study has not covered perishable produces like milk and other milk products like cheese, yogurt, paneer, marine products, fish and meat etc. However, ice cream is included under the frozen category. Only fruits and vegetables currently consumed and capable of being handled in cold chain have been considered.

The Ministry of and Farmers Welfare has accepted the report and it has been circulated to State governments for reference and future development of cold chains.

To accelerate the availability of cold storage and to improve the efficiency of cold chain management, a task force under the chairmanship of Secretary, Ministry of Food Processing Industries, was set up by the Prime Minister’s Office in 2014 with a view to re-visiting the strategies, financial incentives to all cold storage and cold chain related schemes and recommend institutional mechanism for enhancing capacity of cold chain in the country.

The task force has, among other things, recommended that the government aim at creating an additional capacity of 7.5 million tonnes over the next 5 years with fund allocation of Rs 6,100 crore. Out of this, 5 million tonnes may be created together by the National Horticulture Mission and National Horticulture Board (2.5 million tonnes each) under the Mission for Integrated Development of Horticulture of Department of Agriculture, Cooperation and Farmers Welfare and 2.5 million tonnes under the scheme of the Ministry of Food Processing Industries. The government has accepted the report.

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