Financing of cold chains should be viable to attract private investors

Cold chain financing should be viable, bankable as well as profitable in order to attract private investors. This was stated by Dr Saumitra Chaudhuri, member, Planning Commission, in the inaugural address at the national conference on cold chain financing, organised by PHD Chamber in New Delhi.

“There is a need for institutional changes in order to facilitate cold chain financing. There is a need for amending the Agricultural Produce Marketing Committee (APMC) Act. Cold chain storage is essential not only for high-value commodities, but also for other perishable food items, such as meat, fish and green vegetables, which need to come up in a big way,” he stated.

“The model APMC Act is very rigid. There is a need to figure out a way where there is institutional space for modern businesses in cold chain financing. A substantive business model needs to be developed, along with huge value addition,” Dr Chaudhuri added.

Sanjeev Chopra, joint secretary and mission director, National Horticulture Mission, Ministry of Agriculture, delivered a special address, in which he stated that cold chain financing was needed for high-value products, such as fruit and vegetables, as these show greater demand.”

“The Indian cold chain infrastructure is helping fresh produce of other countries. The cold chain infrastructure should be devised in a way that it is helpful for Indian farmers. There is a need to identify six or seven products, identify investors, and work with the banks in order to facilitate cold chain financing in India. The cold chain system needs fiscal incentives to make it commercially viable for investors,” he added.

Suman Jyoti Khaitan, president, PHD Chamber, delivered the welcome address at the conference. He emphasised on proper financing by banks in order to promote the cold chains in the country. “Many financial models are available, which need to be promoted to finance cold chains in the country. These steps might boost the confidence and encourage private investors to invest into the cold chain business,” he added.

R S Bedi, in his presentation of the industry perspective, said, “Cold chain projects are perceived by investors to be high on capital and low on volumes. The financial viability of cold chain projects is a serious issue that needs to be addressed.”

Source: FnBnews.com, Thursday, December 12, 2013