Due to COVID-19 lockdown, most farmers in Assam failed to sell their agricultural produce due to lack of cold storage facilities within easy reach. EastMojo takes stock of the situation
Guwahati: The poor procurement price for the horticulture crops during the off season is always a matter of concern for the farming community. However, the outbreak of COVID-19 this year has impacted even the harvesting season.
Raham Ali, a farmer in Kharupetia in Darrang district of Assam, had cultivated brinjals, luffa and tomatoes in around 8 bighas of land but could neither cut nor sell any of his produce due to lockdown. Harvest was left to rot in the field.
“All the brinjals I had planted have rotten since I could not spray pesticides. I borrowed a loan of Rs 3 lakh for the harvest season thinking that I will be able to return the money after selling the vegetables but instead incurred a huge loss. I tried to sell some of the brinjals in small quantities for Rs 1 to 2 per kilogram in nearby villages but could not get any buyer,” Ali told to EastMojo.
The lockdown did not just restrict thousands of farmers like Ali from cutting the crops but also halted traders from buying vegetables resulting in an irregularity in the supply chain. Farmers across the country had to incur huge loss. Assam, is the top producer of vegetables and supplies to the entire Northeastern region. This harvest season heaps of vegetables were either dumped or fed to animals in the past few weeks because there were no takers.
The state’s agriculture minister Atul Bora said that due to lockdown, the farmers of the state have been facing huge losses. "The cost of loss could be around Rs 40 crore. This year's vegetable production in the state is much more compared to the previous years. But due to lockdown, most of the farmers have failed to sell their produced vegetables in the markets,” he said.
This situation could have been avoided if there was proper planning and also the availability of cold storage facilities within easy reach of farmers. The agriculture minister has admitted that the state has a shortage of cold storage facilities.
Current status of facilities
According to a report prepared by North Eastern Development Finance Corporation Limited (NEDFi), different figures were produced for the existing number of cold storages in Assam. As per the National Horticulture Board (NHB), Assam has a total on 36 cold storages with a total capacity of about 1,57,906 metric tons (MT). Whereas as per the combined data provided by the Department of Horticulture, Assam State Agricultural Marketing Board and APEDA, the figure comes at 48. This includes the facilities provided by the public, private and co-operative sectors taken together. Of the 48 cold storages across the state, 33, with a capacity of 1,96,185 MT, are operationally available while 12 cold storages with a capacity of 25,500 MT are non-operational.
Meanwhile, three cold storages with a capacity of 15,000 MT are under construction. Of this, only 4 functioning cold storages are facilitating agricultural commodities leaving no designated cold storage for vegetables for a state that produces over 50 lakh MT vegetables annually.
Kamrup district alone has 12 cold storages whereas, there are three each in Barpeta and Cachar, one each in Biswanath, Sonitpur, Baksa, Nagaon, Darrang, Udalguri, Karimganj, Dhubri, Goalpara, Dhubri Dhemaji and Chirang, two each in Hojai, Golaghat, Nagaon, Jorhat, Hailakandi and Kokrajhar and six in Tinsukia.
Of these 3 in Kamrup, one each in Barpeta, Kokrajhar, Dhubri, Goalpara, Nagaon, Dhemaji and Udalguri and two in Golaghat are non-operational which either belong to various government departments such as Assam State Agriculture Marketing Board, Department of Agriculture, District Rural Development Agencies, ASWHB or are constructed through Members of Parliament Local Area Development schemes. Meanwhile, cold storages owned by Assam State Agricultural Marketing Board, Bodoland Territorial Council and District Rural Development Agencies are again leased out to private organisations. This leaves the farmers at the mercy of private-run cold storages in the state.
Pranjal Baruah, co-founder, Mushroom Development Foundation
Pranjal Baruah, a pioneer in commercial mushroom cultivation in Assam and co-founder of Mushroom Development Foundation, is critical of the process and said that the storage facilities should be there to help the farmers and not exploit them.
“One perspective of the process is that farmers will not be able to afford to put his produce in a cold storage. So, we have to first of all understand the dynamics of the module. If one is starting a cold storage, there should be a business plan involved including the area covered by the cold storage, infrastructure and allocations for farmers. The aspect of different temperature for different kind of goods and separate chambers should also be taken into consideration,” Baruah said.
Baruah also stressed that a farmers’ integration process should be put in place where the focus should be on helping them out.
“Usually, cold storage facilities are run by entrepreneurs and they usually have to borrow the amount from banks or other financial institutions in order to put a facility in place. Although the venture starts as a social enterprise, it ends up turning into a business since the entrepreneur also has bills to pay and farmers are the ones who are at the receiving end. So measures should be taken to avoid such obstacles keeping the focus on the welfare of farmers,” Baruah added.
The potato factor
Twenty-nine of the total number of cold storages with a capacity of 1,81,785 MT are used to store potato. The same facilities are also used to store frozen food, dry food, dry fruits and other agricultural commodities.
The estimated demand for potato in Assam ins 40 to 45 lakh MT every year whereas the total production of the vegetable in the state is approximately 11 lakh MT. Storage capacity in the state is 1.81 lakh MT or 16.5 per cent of the total production and less than 5 per cent of the total demand in the state. Out of the total storage capacity, less than 10 per cent is available for the local growers as the cold storages are designed to stock imported from other states.
The NEDFi report says that lack of proper cold storage facility within easy reach of farmers is one of the prime factors behind malady at farmer’s level. The report further reads that there is linkage between potato produced in the state and its storage in the existing cold storage facilities which are maintained to create demand and take advantage of the same in order to sell the produce at a higher rate.
“90% of the spaces in the cold storages are utilized for storing potato. Few agencies procure potato at a very low price during peak harvesting seasons and then a channel is maintained which streamline the flow of potato into the cold storages – where it is kept for a different duration and are released to the market in a phased manner when the prices go up,” the report reads.
The lack of cold storages has also given rise to another dimension in terms of operation and unorganised sector where around 30 lakh MT of potato is sold.
“The price prevailing in neighbouring procuring states and transportation cost with marked-up profit margin decided by the wholesalers routing the produce in the market after temporary storing in local godowns finally determine the market price. The potato wholesalers use both the routes of direct selling and selling after storing in cold storages for a limited period. In many cases, the cold storage owners are also the wholesalers themselves,” the report by NEDFi states.
Creation of cold-chain infrastructure is promoted under various schemes by several government agencies. But, when it comes to building it there many hurdles stand in the way.
In Assam, electricity accounts for 30% of the operational cost of a cold chain business. There is no rebate. The power supply is erratic and most chains have to opt for generators which is expensive and adds to the costs.
The use of jute bags reduces the lifeline of produce. Moreover, other important factors such as accessibility to a highway, railway head, connectivity to the markets including those in the neighbouring states play an important role in the smooth functioning of the cold storages.
In Assam, most cold storages are located far away from the producing belt. The farmers keep away because they incur an additional cost of transportation. Setting up of new cold storages will have to be aligned with Sonitpur, Barpeta and Kokrajhar as these are the potential districts that require more cold storages for facilitating the growers.
Benefit for farmers
Vegetables usually fetch good returns for farmers when the market demand peaks. However, when the demand dips, farmers either sell their produce at a very cheap price or simply dump them due to the lack of storage facilities for perishable commodities.
A cold storage which is a warehouse space with a controlled environment and multiple chambers for bulk and long storage of perishable produce. The facility provides long-duration storage of a specific produce and help in building an inventory buffer which will serve to smoothen the episodic production by stabilising and sustaining the supply lines.
In the cold-chain, the essential characteristics of agricultural produce remains unaltered as prime activity of preconditioning at a pack-house does not transform the produce but safe-guards the value and makes it more marketable. The key benefit derived from cold-chain is in fact, empowering the direct linkage of farm-gate value with consumers by enhancing the holding life and transportability of the produce. Cold-chain allows the scope to reach and capture more markets.
Although such facilities are designed close to production areas, the same has been lacking in Assam resulting the farmers having to bear the transport expenses. Thus, along with providing such facilities, the farmers need to be provided with adequate financial capability to transport their produce and pay the rent for the cold storages. Taking such measures can inflow of working capital for the farmers for the next cropping season rather than borrowing money at high-interest rates. Meanwhile, monitoring and ensuring of maintenance of the stored produce, quality control and price regulation is the need of the hour given the current situation.
A ray of hope came with the Union finance minister Nirmala Sitharaman’s announcement on May 15 where she mentioned that the centre will create a Rs 1 lakh crore Agricultural Infrastructure Fund for the farm- gate infrastructure for small and medium farmers, most of whom are marginalised. The impetus for development of farm-gate and aggregation point, affordable and financially viable post-harvest management infrastructure to be put in place.
“The lack of adequate cold chain and post-harvest management in the vicinity of farm-gate is causing gaps in value chains. The government’s focus has been on short-term crop loans while investment in long-term agriculture infrastructure has often not been enough,” the minister said.
She also informed that 50% subsidy on storage, including cold storage, will be provided to farmers and distress sale of perishables needs to be prevented including the reduction of price.