SPV for cold chain set-up

FARMERS can now rub shoulders with corporate biggies like Reliance, the Tatas and ITC. Farmer associations and co-operatives can pick up equity in the proposed special purpose vehicle (SPV) for setting up cold chain infrastructure in the country. The government as well as corporates will also have equity stakes in the SPV.

The government plans to float an SPV under the new mega food park scheme to build cold chain infrastructure in rural India. Created with an initial corpus of Rs 50 crore, the SPV is expected to attract investment of Rs 400 crore from the private sector. “The new mega food park scheme aims at encouraging supply chain infrastructure and greater level of processing. The SPV would set up packing facilities, processing units and collection centres near the farm land,” food processing secretary PI Suvrathan said. The ministry has already started negotiations with corporates like ITC, Reliance, FieldFresh and Adanis. While the government would set up packing facilities and provide assured power supply to the corporates, the processing companies and retailers would be required to provide technical knowhow to farmers and set up the processing units and collection centres.

The ministry had set up 40-50 food parks earlier under the previous scheme. “It was a supply-driven model and it didn’t work. The new scheme is a demand-driven model which will have greater involvement of corporates and farmers,” Mr Suvrathan said. The food processing ministry is also in talks with Indian Railways for starting cold storage container service in order to accommodate 4,00,000 metric tonnes of farm produce. Container Corporation (Concor) is preparing the blueprint for setting up cold chain container depots in Mumbai, Delhi and Kolkata.

The government envisages an investment of Rs 50,000 crore in the food processing sector during the Eleventh Five-Year Plan, food processing minister Subodh Kant Sahai had earlier announced. The lack of cold chains in the country leads to wastage of about 40% of the farm produce, causing a loss of about Rs 50,000 crore annually. India accounts for over 10% of the world’s production of fruits and vegetables but only a little over 1% share of the global fruits and vegetable export market, estimated at Rs 1,80,000 crore.