Govt grants Rs 10 cr to develop cold chain infrastructure

The Government will extend a grant of Rs 10 crore for cold chain integration in the country...

The Government will extend a grant of Rs 10 crore for cold chain integration in the country along with subsidies to encourage private players to invest in the cold chain infrastructure. This was announced by minister of state for food processing industries Subodh Kant Sahai at the inaugural session of the two-day conference on supply chain and technology in retail organised by FICCI.

Speaking on the need to create a modern chain for preservation and value addition of perishables, he said, “During the Eleventh Plan, the ministry is launching a revamped cold chain infrastructure scheme to create integrated cold chain infrastructure at different levels — farm-level primary processing centre-cum-cold chain, collection/aggregation centres and strategic distribution centres.” He said his ministry is trying to negotiate with state governments to reduce VAT to between zero and four per cent.

For integration of agri-business facilities, the minister spoke of extending support to 30 mega food parks based on five feasibility studies conducted by his ministry. “These parks will function as sourcing hubs for retail outlets and to link farmers with retail markets while minimising intermediaries,” he said.

Quoting a study conducted by NIAM, the minister pointed out there are 6-7 intermediaries in the fruits and vegetables supply chain in India as against 2-3 in developed countries. “While the consumer pays Rs 11.6 for a kilo of fruit, the price realised by the farmer is only Rs 3.3 a kilo (28 per cent). The trader at the village takes Rs 4.1 (35 per cent), the wholesale dealer takes Rs 1.7 (15 per cent) and the retailer takes Rs 2.5 (220 per cent). All these margins are without any value addition to the product,” he said, adding that this reduces farm gate price and income levels.

On the issue of foreign direct investment (FDI), the minister maintained that the Government might open up its $33 billion retail market after being convinced that kirana stores would not be affected by big retailers. The Department of Industrial Policy & Promotion has engaged an agency to conduct an in-depth study on the impact of FDI in food retail on domestic retails, he said. The study report is expected to be available by March 2008.