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April 11, 2014 12:18 am

By Amy Kazmin

Tonnes of fruit and vegetables rot each year before reaching consumers due to poor handling and storage facilities

Delhi’s Azadpur Subzi Mandi is one of Asia’s biggest produce wholesale hubs, a massivedistribution centre for fresh fruit and vegetables cultivated across India to be dispatched toconsumers in all directions.

Each day, huge truckloads of produce arrive, are unloaded and then auctioned by traders toother middlemen, who repack the food in other trucks to be hauled away to far-flung places foreventual sale to consumers.

The fresh produce carried on these long journeys is rarely cooledor shaded, but rather subjected – especially in summers – to the blistering sun, creating highrates of spoilage.

The conditions at this major wholesale market, which has changed little in decades, reflect one

India tackles supply chain to cut food waste

©Getty

of the biggest threats to food security in India, especially as the pace of urbanisation requiresmore food to be brought to cities.

With India’s farm-to-fork networks still dominated by politically influential traditional tradersand small shops, the country has struggled to modernise its food supply chain and attractlarge-scale investment into cold-storage, refrigerated trucks and other modern logistics.

As a result, much of India’s agricultural output rots – or seriously degrades – before reachingconsumers, even as hunger and malnutrition remain.

“The issues we have with food security are traceable to issues we have around supply chainbottlenecks, transport and storage,” says Sanjeevan Bajaj, chief executive of the Quality Forumof the Federation of Indian Chambers of Commerce and Industry.

According to estimates by the UN’s Food and Agriculture Organization (FAO), about 40 percent of India’s fresh fruit and vegetables – worth an annual $8.3bn or so – perishes beforereaching consumers. Each year, some 21m metric tonnes of wheat, especially grain – anamount almost equal to Australia’s total annual production – rots in India because of improperstorage in the custody of the government-controlled Food Corporation of India.

India is not unique in the level of its losses. According to the FAO, 42 per cent of fruit andvegetables grown in the Asia-Pacific region, and up to 20 per cent of the grain, never reachesconsumers because of poor post-harvest handling.

But the magnitude of food losses in India dwarfs those in other countries, given the country’ssize and the scale of its farm output, while the context in which this food goes to waste is alsofar more serious.

According to official figures, about half of Indian children under the age of five are chronicallymalnourished, resulting in stunted growth, while 20 per cent suffer from acute malnutrition,with visible wasting.

In recent years, Indian food prices have risen at double-digit levels, pinching the budgets ofmany working-class urban families in a country where food still accounts for an average of 31per cent of monthly household expenditure.

India’s Congress-led government has acknowledged the importance of attracting more privateinvestment to modernise the country’s food-supply chain to reduce wastage.

In 2012, Delhi decided to permit up to 51 per cent foreign direct investment in supermarketsand other modern food shops – which many say is the necessary front-end to make a modernfood-supply chain work.

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“If you can aggregate demand, you can aggregate supply, build scale and make sureinvestments in the middle pay off,” says Bijou Kurien, former president and chief executive ofReliance Retail, one of India’s largest modern retailers.

Yet foreign retail giants remain wary of India, because of numerous conditions, including arequirement to source 30 per cent of their goods from small enterprises, and invest at least halftheir capital in back-end infrastructure. Many Indian states have also said they would barforeign-owned stores, closing off large parts of the potential market.

The Hindu nationalist Bharatiya Janata Party, which is widely expected to lead a newgovernment after the upcoming parliamentary elections, is firmly opposed to foreigninvestment in supermarkets.

Currently, just 3 per cent of India’s food and groceries are purchased through modern retailstores – including Indian owned – inhibiting investment in back-end logistics.

India has developed some modern supply chains linked to food processing companies, such asNestlé, Unilever, Pepsi and Del Monte. But these still handle a fraction of the country’sperishable food.

According to a recent study by the Indian Institute of Management in Kolkata, cold storagefacilities are available for just 10 per cent of India’s perishable produce – and are mostly usedfor potatoes – to meet India’s robust demand for chips. The study estimates that India needsstorage facilities for another 370m metric tons of perishable produce.

But with so many obstacles confronting private groups – including a fragmented, tightlycontrolled market, and various government restrictions – such investments are unlikely tomaterialise rapidly.

“We have a modern system of food supply, but it is only addressing those who are at the higherlevel of income,” says Rosa Rolle, a senior agro-industry and post-harvest officer at the FAO’sregional office.

“The mass of people are dependent on traditional food systems for subsistence and livelihood.Policies have to be working on both systems in parallel.”

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