Can cold storage rooms add value to Indian farmers?

May 10, 2016

This article is about farming in Gujarat (India) and how Farmers could benefit from using cold storage rooms.

Talking Farming Numbers (Gujarat)
Gujarat is one of the 29 states of India and has a population of more than 65 million people and a surface of 196.024 km². (Population Gujarat, 2015) Ahmedabad is its central city. Gujarat is divided 26 districts with each their own typical crops. The total yearly production of fruit is more than 8 million Tons and the production of vegetables is more than 11 million Tons a year. (Pandya, 2014) Next to fruits & vegetables flowers and spices are also cultivated.


Current Value Chain for Fruits & Vegetables (Gujarat)


As shown above, there is a complicated value chain for fruits and vegetables in India. Sometimes the crops will be traded more than 6 times before it reaches the end-consumer. The multiply factor between the selling price for the farmers and the end-consumer price can be more 10!

The current supply chain for national trade does not require cold storages. All trading of fruits and vegetables is done within a maximum of three days. Most of the harvesting will be finished during the mornings. Directly after harvesting the crops will be graded and sorted. The best quality products will go to the APMC’s and will be traded to wholesalers. The lower quality products will be traded directly at local markets. The APMC’s and wholesalers trade the harvests on the same day they are harvested. Dependent on the buyer, the harvest load will be transported by night in unrefrigerated trucks. The transport happens always at night because of lower temperatures.

APMC: law
The APMC act is established to ensure that intermediaries do not compel farmers to sell their products at the farm gate against extremely low prices. All food products should first be brought to the market yard and then be sold through auction. (Wikipedia, sd)

‘’ A State is geographically divided and Markets (Mandis) are established at different places within the states. Farmers have to sell their products through the auction in Mandi. To operate in Mandi, a trader has to get a license. Wholesale, retail traders (e.g. shopping mall owners) or food processing companies cannot buy farm output directly from the farmer. They have to buy through the Mandi.’’ (Wikipedia, sd)

Do cold storage rooms have value in the Value Chain?

1. Let’s start with Definitions of Cold storage, cold room and pre-cooling
A cold storage is a space in a building where crops can be stored for a longer time. The main purpose of a cold storage is to store crops for a longer time to fulfill the different demands during the year and to get a better price for the crops. To optimize the performance of cold storage machines that can control the ideal humidity are essential. Because every crop has a different ideal cooling temperature and humidity, cold storages are used for only on crop at the same time.

A cold room is a storage space that is used to keep products cool between trading. Products stay in general for a maximum of three days in the cold rooms. Cold rooms are in general not equipped with humidity control. Cold rooms are used to cool different types of fruits and vegetables at the same time.

Pre-cooling is a technique were the crops within 4 hours after harvesting gets cooled. Several studies showed that when pre-cooling is applied on crops the shelf life will extend significantly.

2. Current cold storage presence Gujarat
Nowadays there are around 450 cold storages present in Gujarat. Mr. Ashish Guru, president of the Gujarat Cold Storage Association explained there are around 216 cold storages for potatoes and another 25 are coming up.
Gujarat is the only state that offers power subsidy for cold storages. (Agriexchange, sd) Potato can be preserved for more than 10 months in a cold storage. The existing cold storages in Gujarat have an average stock capacity of 2000 MT. (business-standard, sd)

3. Potatoes, Onions and Egg-plant (Brinjal)
As explained above, there is already a lot of cold storage present in Gujarat for potato. Onions need to be dried for at least 5 weeks and by that time they will be traded in the market. Brinjal has a too short shelf life in a cold storage with a maximum of 14 days under optimal conditions.

4. How to select other fruits & vegetables for cold rooms?
There are five requirements for the selection of a crop that is suitable for cold rooms:

The shelf life of the crop will be significantly extended when they will be cooled
The production volume of the concerning crop
The average price must be above a certain price per kg per volume If the crop has a low volume/price ratio a cold storage is not economical because of the high power costs.
The price fluctuation during the year
The harvest season of the crop. This in combination with the shelf life is an important parameter.
The cooling temperature.

Selection of vegetables
In the image below the 6 most cultivated vegetables of Gujarat are displayed. The little squares in the left beneath corner show the maximum shelf life when the crop is stored in a cold storage. In the thermometer the best cooling temperature is displayed for each crop. In the beams on the right of every vegetable, the total annual production in metric TON (1000kg) of Gujarat is indicated.

The Shelf life, temperature and production


  1. Onion – 2. Potato – Cabbage –  4. Tomato –  5. Brinjal (eggplant)-  6. Okra

The most cultivated crop in Gujarat is Potato with more than 2294 Tons in 2014. Onion has the longest extendable shelf life and Brinjal requires the highest cooling temperature.

These can deliver better revenues for Farmers. Cabbage has a really long shelf life so it is appropriate for cold storage. The shelf life of tomato can be extended with a month during cold storage. Cabbage is a second possibility.

Selection of fruits
For the selection we focused on the 11 most cultivated fruits in Gujarat. Cashew nut is also mentioned in the statistics notwithstanding it is not considerate as a fruit.


  1. Datepalm – 2. Coconut – 3. Custard apple – 4. Pomegranate –  5. Guava –  6. Papaya –  7. Mango –  8. Lemon – 9 lime –  10. Banana – 11. Chiku – 12. Aonla(indian gooseberry) – 13. Cashew nut

Maximizing Farmer revenue show citrus and pomegranate are most suitable to be used for cold storage. Compared to the other fruits they also have higher shelf life.

Conclusion do Cold Storage rooms add Value?

1. Reduce Fruit en vegetable losses in India
Gujarat, belonging to the top 10 horticulture producing states in India, loses almost Rs 11,400 crore worth of fruits and vegetables after harvest every year due to lack of proper storage facilities. That is more than 1,7 billon euros. (Newsservice, 2013).
The losses experienced by for example Tomato Farmers are caused by damages, sorting, pests and diseases. In the field study our company has conducted, it turned out that only 1-2% of the losses at the farmer’s site are caused by over-ripening.
Farmers bring their crops sometimes directly to the collection centers, bigger farmers bring it for them or they sell it directly to supermarkets or CPC in big cities. Trucks are used to transport the crops. The trucks are not refrigerated and have in general an open trunk. This trunk will be covered with jute to protect the crates or boxes filled with fruits or vegetables.

Losses caused by bad handling during sorting are evident. To reduce these losses cold storages and cold transport should be added to the value chain.

2. Add cold storage capacity and start with Tomato, Pomegranate and Citrus

3. Get better prices for farmers
On an average basis the farmer is only able to receive 1/4th to 1/3rd of the final retail prices. During low season, when end-consumer prices are high, the farmers do not get higher returns on their products.
Farmers can start influencing daily market prices into their benefit when they influence timing of selling and quantities of selling.

Cold storage units are essential for this!