A study conducted by Central Institute of Post-Harvest Engineering and Technology (CIPHET), Ludhiana has estimated that annual value of harvest and post-harvest losses of major agricultural produces at national level was of the order of Rs. 92,651 crore (14.8 billion USD) based on production data of 2012-13 at 2014 wholesale prices.

The Ministry of Food Processing Industries is implementing a Central Sector Scheme, namely the Scheme for Infrastructure Development for Food Processing having components of Mega Food Parks, Integrated Cold Chain, Value Addition and Preservation Infrastructure and Modernization of Abattoirs.

Under the Scheme, 135 Integrated Cold Chain Projects have been sanctioned by the Ministry with the cold chain capacity of 475,000 MT of Cold Storage/Controlled Atmosphere/Modified Atmosphere storage, Deep Freezer, 114.75 MT/Hour of Individual Quick Freezer(IQF), 12,005,000 Litres Per Day of Milk Storage/Processing and 787 number of Reefer vehicles.

The Government is also providing various incentives to promote creation of cold chain infrastructure to reduce loss of agricultural produce. The details of such incentives are as follows:

  • Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables have been exempted from Service Tax in Budget 2015-16.
  • Loans to food & agro-based processing units and Cold Chain have been classified under Agriculture activities for Priority Sector Lending (PSL) as per the revised RBI Guidelines issued on 23/04/2015.
  • Under Section 35-AD of the Income tax Act 1961, deduction to the extent of 150% is allowed for expenditure incurred on investment for (i) setting up and operating a cold chain facility; and (ii) setting up and operating warehousing facility for storage of agricultural produce.
  • Government has extended Project Imports benefits to cold storage, cold room (including for farm level pre-cooling) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat. Consequently, all goods related to Food Processing, imported as part of the project, irrespective of their tariff classification, would be entitled to uniform assessment at concessional basic customs duty of 5%.
  • Refrigeration machineries and parts used for installation of cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat under Tariff Head: Chapter 84 are exempted from Excise Duty.
  • Construction, erection, commissioning or installation of original works pertaining to post-harvest storage infrastructure for agricultural produce including cold storages for such purposes are exempted from Service tax.
  • Capital investment in the creation of modern storage capacity has been made eligible for Viability Gap Funding scheme of the Finance Ministry. Cold chain and post-harvest storage has been recognized as an infrastructure sub-sector.

Source: Ministry of Food Processing Industries, India

Illustration Photo: Arctic's Cold Chain Refrigeration

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