Farmers in India incur nearly USD 12,520 million in post-harvest losses annually due to inadequate cold storage facilities. BASE and Empa’s ‘Your Virtual Cold Chain Assistant’ project is making sustainable cooling accessible, affordable, and an indispensable part of post-harvest management for the Indian farmers.
India is the world’s largest producer of milk, pulses, and jute, and ranks as the second largest producer of rice, wheat, sugarcane, groundnut, vegetables, fruit, and cotton. Despite high levels of food production, the country ranks 94 out of 107 countries on the 2020 Global Hunger Index. A large chunk of food grown by the Indian farmers fails to reach the consumers due to post-harvest losses. And figures for these losses vary. The Food and Agriculture Organization of the United Nations (FAO) has reported an annual loss of 40 per cent of fresh fruits and vegetables worth USD 8.3 billion in India. The central government’s Food Corporation of India pegs these losses at 15 per cent. While the figures for the losses vary, they are still alarming enough to demand urgent action to decrease hunger and malnutrition in the country. Post-harvest losses translate into huge financial losses to the farmers. According to the Cool Coalition, every year, farmers in India incur nearly USD 12,520 million in post-harvest losses due to inadequate storage facilities and a lack of energy infrastructure. This is worrisome as almost 82 per cent of farmers in the country are small and marginal farmers with land holding of less than two hectares.
NITI Aayog’s Policy Paper – Doubling Farmers’ Income – published in March 2017, notes that an increase in farm output has not always resulted in a commensurate increase in farm incomes. “The experience (in reference to agricultural policy over the years that has focused more on increasing farm output and not as much on improving farmers’ livelihoods) shows that in cases, growth in output brings a similar increase in farmers’ income, but in many cases, farmers’ income did not grow much with an increase in output. The net result has been that farmers’ income remained low, which is evident from the incidence of poverty among farm households,” the report reads.
At the heart of improving farmers’ welfare lies improving their terms of trade – a goal (noted in the March 2017, NITI Aayog report as well) that can be achieved by increasing the country’s cold chain infrastructure as it gives farmers more latitude to bargain and hold back their crops until they are able to secure appropriate prices for it. At present, between 25 per cent and 35 per cent of cultivated food is wasted due to a lack of proper refrigeration and other supply chain bottlenecks, and only six percent of the food produced in India currently moves through the cold chain. At the beginning of 2020, there was a shortfall of 12.6 million tonnes of cold storage capacity in the country, as noted by the National Centre for Cold Chain Development (NCCD), an autonomous body set up by the Indian government to establish cold chains for perishable agriculture and horticulture produce. To reduce post-harvest losses in the country, the Basel Agency for Sustainable Energy (BASE) and Empa (The Swiss Federal Laboratories for Materials Science and Technology), are implementing a project – Your Virtual Cold Chain Assistant (Your VCCA). By using data science, digitalisation, and business model innovation, Your VCCA aims to provide smallholder farmers with access to clean, decentralised cold storage facilities as well as post-harvest intelligence.
“Globally, a third of the fresh produce is lost due to gaps in the cold chain infrastructure. Climate friendly cooling technologies are available, but their deployment is limited due to the lack of reliable access to energy, high-upfront costs, unavailability of proper maintenance, and limited financing options and know-how. Innovative business models can help to overcome these barriers,” Thomas Motmans, senior sustainable energy finance specialist at BASE, told Gaon Connection.
BASE and Empa first identify local partners who are willing to offer ‘cooling as a pay-per use model’. Currently, the Your VCCA project is being rolled out at three locations in India – Muzaffarpur in Bihar, Rourkela in Odisha, and Shiladesh (Shimla district) in Himachal Pradesh. These pilots are being implemented in partnership with local clean technology companies with the aim to cut down post-harvest food losses and increase farmers’ income. These include Cool Crop Technologies Private Limited (Himachal Pradesh), Koel Fresh Private Limited (Odisha), and Oorja Development Solutions Limited (Bihar).
Your VCCA project: Minimising post-harvest losses
Your VCCA project was launched in India in January 2021. The aim of the project is to contribute to food security in the country, reduce post-harvest loss, and increase the incomes of smallholder farmers. The Your VCCA project includes two components: an innovative pay-per-use business model, called Cooling as Service (CaaS) to overcome the market barriers hindering the adoption of cold storage among farmers, and a data-science-based mobile application, called Coldivate, that facilitates the CaaS’ implementation. Unlike the traditional selling model, in which farmers purchase a cooling unit from a company, own and maintain it till the end of its life cycle, the servitisation approach on which the Cooling as Service model is based keeps the ownership of the cold room (typically solar-powered and decentralised) in the hands of a local provider. In other words, the operator pays for the cold room’s operations and upkeep in exchange for a nominal fee from the end-users, such as marginal farmers and small-time traders. The servitisation model spares customers the upfront investment of installing expensive equipment, minimises operation and technology risks, and reduces the overall utility costs. By leaving the responsibility of equipment maintenance, repairs and updates to the technology providers, end-users can pay undivided attention to their core business. The use of servitisation to facilitate access to energy-efficient and sustainable technologies helps countries to address the need for cooling while contributing towards their climate targets.
The other component of the Your VCCA project – the Coldtivate app – ensures that once farmers have access to cooling units, they are able to maximise the benefits reaped from its usage. Coldtivate serves this aim by predicting the extended shelf-life of the crops (from cold storage vis-a-vis storing it at ambient temperatures) based on real-time sensor data (temperature and humidity in the cold room) and the initial quality of the produce. By leveraging this information, farmers have an alternative to distress-selling at the end of the day and can store their crops for longer to secure better off-season prices, while still being mindful of selling their produce before its quality deteriorates.
“The app is designed keeping the needs of three audiences in mind – the local entrepreneurs offering cold storage facilities, community members operating these rooms and, most importantly, the smallholder farmers and petty traders using the rooms. The app is currently used by the companies offering the cooling services, and it will be made available for the farmers by the end of the year,” informed Simran Singh, capacity building officer at BASE. “The current version of the app helps accelerate the deployment of the business model through two key features: digitalising the check-in and check-out of crates in the cold room, and predicting the remaining shelf-life of the crops,” explained Roberta Evangelista, data science and digitalisation specialist at BASE.
In addition to predicting the shelf life of the stored crops, the newer versions of the app will include market price forecasting. The app will forecast the price of commodities across different markets in the vicinity of the cold rooms. This information, combined with the remaining time left for pick up, will provide insights to cold room users on when and where to sell the crops in storage.
“In the absence of an app, the room operations are conducted manually by the technology providers, are more prone to error, and cannot be easily monitored by the users. Digitalising the cold room transactions is a very important step to make the business model seamless and generate trust among farmers to use the cold rooms,” Evangelista added. The Knowledge Hub integrated in Coldtivate contains information about the optimal storage temperature and average storage time for each commodity, and will be regularly expanded and enriched to reflect the best practices in post-harvest management as per latest research. To ensure that cold storage users and operators always have access to this crucial information, the Knowledge Hub will be made available offline as well. The Knowledge Hub contains information that facilitates the operations and use of cold rooms, allowing operators to ensure that all crops are handled with care and maintain high quality (so that farmers can get fair prices).
12.6 million tonnes shortfall of cold storage capacity