Spoilt produce blights Indian food chain
Amid the chaos and torrential monsoon rains in the Dadar vegetable market in Mumbai, piles of spoilt produce lie festering at the side of the road, while hundreds of green chillies strewn across the floor are trampled by the morning’s passers-by.
This scene is typical in India, where as much as 40 per cent of fresh produce is wasted each year before reaching the country’s households.
Sagar Agrahari, a vegetable seller in the Dadar market, estimates that he loses up to 20 per cent of his orders from farms around the country because of spoilage.
“We just have to throw away the spoilt food – it’s of no use,” he says. “It’s because of transporting and handling. If you look around, there’s no refrigeration in any of the trucks. We should have better facilities.”
India urgently needs to tackle its excessive wastage of fresh food amid high inflation in the country and growing concerns about food security, analysts say.
Challenges with transporting and storing food are the main factors which lead to spoilage and loss of food in India, home to one in three of the world’s poorest people, according to the World Bank.
“India, the world’s largest producer of milk and the second-largest producer of fruits and vegetables, is also one of the biggest food wasters in the world – wasting 440 billion rupees (Dh26.74bn) worth of fruits, vegetables, and grains every year,” according to Emerson Climate Technologies India, part of Emerson, a US-based manufacturing and technology company.
Inflation in India has been stubbornly high, with food prices playing a major role in its rise. Poor rains have played a role in food inflation, but factors including a lack of refrigerated storage, resulting in less produce, and a convoluted supply chain where fresh food is passed through a number of middlemen, also drives up prices.
India’s consumer price inflation increased to 7.96 per cent last month compared to 7.46 per cent in June because of higher food costs. Vegetable prices rose 16.88 per cent in July compared to a year ago, while fruit prices were up 22.48 per cent, according to official data. Tomato prices have skyrocketed recently and last year there was a problem with soaring onion rates, with these foods considered essential products for many Indian households. Such price surges hit the poor particularly hard and the resulting reduced consumer spending on non-food goods is negative for the country’s economy, which grew at near decade-low levels in the past financial year.
Food security has come into sharp focus with India this month blocking a WTO global agreement because it is demanding freedom to stockpile food.
The agriculture minister Sharad Pawar in September said that 40 per cent of agricultural produce was wasted each year in India. About a third of food produced globally goes to waste, according to the UN Food and Agriculture Organization.
“Food processing is not a big industry in India yet,” says Sharad P Kale, the head of the nuclear agriculture and biotechnology division at Bhabha Atomic Research Centre in Mumbai, a government venture which is developing ways of preserving food through radiation. “The concept which has become very common in western countries, that concept is still not here because Indians want fresh food and there are not enough facilities to make processed food. Farmers can suffer because the price is low one year or customers suffer because the prices are very high. If we had a facility for, say, onion processing, then we could preserve it. Right now the losses are about 25 to 30 per cent because of the insects and pests because India is a tropical country.”
The Indian government, which came into power under the prime minister Narendra Modi in May, is under enormous pressure to alleviate food price issues in the country. It is taking steps to crack down on hoarding and curb exports in a effort to contain prices. On Wednesday it announced plans to set up a panel to look at overhauling the Food Corporation of India, a government agency which procures food grains from farmers.
But there is is much more to be done. Analysts point out that investment into infrastructure and attracting more foreign funds into the retail sector could help. Under the previous government, foreign supermarkets were allowed to invest up to 51 per cent for the first time in 2012. This was regarded as a move that could help improve the situation as overseas companies would be likely to set up their own supply logistics. However, the British supermarket chain Tesco has been the only investor so far to announce plans to take advantage of the policy change and it has yet to open its first stores in India. In addition, Mr Modi’s government has expressed opposition to the policy relaxation for foreign supermarkets that took place under the previous regime.
Cold storage solutions, which are severely lacking in India, are needed to reduce spoilage, experts say.
“We currently produce enough food, but the tragedy is that too much of it is lost unnecessarily through spoilage in developing countries, where it is most needed, due to inadequate infrastructure and in particular a lack of cold and frozen supply chains,” says Tim Fox, the head of energy and environment at the Institution of Mechanical Engineers.
Kamal Sen, the president and chief executive of Cogitaas, says that demand for vegetables, fruits, fish and meat are only going to grow in India as incomes rise, adding to inflationary pressures.
“Due to fixed support prices from the government for food grains, other sectors like growing fruits, vegetables, fish, meat, poultry are at a disadvantage and higher risk,” Mr Sen says.
“Therefore India tends to produce too much food grain, which then lead to bulging and decaying surpluses which are then stored at a very high cost. However, not enough investment is made into other types of non-grain food production. Storage, marketing, processing, insurance, for horticulture, fish and poultry are underinvested and inadequate.”
He says that more investment into the sector is desperately needed.
“India’s agricultural policies have to move beyond food grains and set up fast-growing and flexible supply chains for non-grain food items; domestic and foreign private investment will be required in a large scale, but government also needs to invest and ensure that restrictions on markets, transportation, are removed. This will enable higher employment, higher returns for those working in these products, and lower the overall index for food inflation.”
India Ratings, formerly called Fitch Ratings India, explains there are a number of factors beyond seasonal ones which are driving up food prices.
“Stagnation in productivity, rise in cost of cultivation, changes in food consumption pattern, exploitation of supply shock by intermediaries are some the causes that are structural in nature,” it says. “There is no quick fix solution for structural issues. The government will have to come up with a new agricultural policy which will address the emerging food consumption requirements, preferences of the Indian households and reduce the intermediaries between the farm gate and the ultimate consumers.”
Mr Agrahari says he is doubtful of the situation improving in the near term and he has come to accept wastage of his vegetables through spoilage as something that is to be expected.
“It happens,” he says. “We don’t really see it as a problem because it’s normal for us.”
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Updated: August 23, 2014 04:00 AM