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Chitra Phadnis

BANGALORE, Feb. 19

LIKE everything else connected to agriculture, the cold storage business is also vulnerable to weather conditions. Cold storages were seen as an answer to the problem of post-harvest losses. During boom times, farmers could store their produce instead of being forced to destroying it, was the reasoning. Today, the cold storage industry itself is in dire straits.

With a poor apple crop in Himachal Pradesh and Kashmir, cold storages down South have found business sinking. ``This year, I managed to get only 60 per cent of apples that I usually get," says Ms Shailaja Somanath of Sneha Cold Storage.

Cold storages used to depend on chillies for business but the chilli crop was hit by drought last year. Only 30 per cent of the crop has come into cold storage, says Mr Balakrishnan of SLP Cold Storage.

It is not always shortages, even good crops can cause problems for the cold storage industry. This year, the potato crop has been good in the North and South India expects it to be dumped in its markets. In anticipation of flooding of markets by northern potatoes, southern farmers (who usually store their produce in cold stores and wait for better prices in June-July) are hesitant to store their crop. Rather than spend money on storing potatoes and drive up prices further, they prefer to sell them immediately.

Together with under-utilisation, heavy interest burdens, high capital investments and low returns, the current problems have cascaded to cripple the industry. In Karnataka, for instance, 80 per cent of the 55 cold storages in existence are in trouble, according to the Cold Storage Owners' Association (CSOA).

When Business Line tried to contact G.K. Cold Storage, one of the oldest and largest cold stores for chillies in Bangalore, it found that the unit had closed down. Another cold store, SLP Cold Storage, admitted that it was on the verge of closure. The CSOA President, Ms Shailaja Somnath, says she has had very little business this year. ``A number of units have been up for sale for the past 2-3 years, but there have been no takers,'' she said.

Eighty per cent of the installed cold storage capacity in Karnataka remains unused. The utilisation rate is around 30-40 per cent and the units are idle for 6-7 months a year. Private companies, encouraged by the Government claims of giving a thrust to the sector, had borrowed at high rates of 17-19.5 per cent and are now unable to service their debts. In addition, the industry is also upset that the much-advertised Government subsidies are not coming easily.

Power is a huge expense for the industry, which has been asking for cold storages to be treated as `agricultural operations' and for charges to be on par with levies on IP sets. The CSOA has been repeatedly asking for concessions, but nothing has come out of it yet, laments Ms Somnath.

Govt aid for farmers sought

COLD storage units were encouraged as a means to bring down post-harvest losses and give farmers better returns. However, farmers in general are not aware of the benefits of cold storage and the Government needs to educate them, says the Cold Storage Owners' Association.

The users of the existing facilities are not farmers, but traders. ``Growers rarely have the financial resources or the holding capacity to use the cold storages and sell when prices go up,'' said Mr Balakrishnan of SLP Cold Storage.

The CSOA has requested the Government to provide financial support to farmers to be able to use the facility. ``We have proposed to the Government that farmers who are not in a position to wait for better prices can be paid a certain amount immediately. The produce can be sold later and profits from it can shared between the cold store and the growers,'' Ms Somnath said. ``This will benefit the farmers as well as the cold storage owners.''

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