Few takers in Karnataka for upgrading of cold storages

Karnataka government's proposal to modernise the cold storage network in the state has failed to enthuse the private sector.

The state had invited proposals from the private sector to make use of the funds available under the National Horticulture Mission (NHM). However, till now, only two proposals have come for modernisation.

The state government has announced modernisation of cold storages as the focus are under the NHM programme and aims to build a modern network with multi-commodity cold storages for the better handling of various fruit and vegetable crops.

However, the response from the private sector is unsatisfactory and till now only two entrepreneurs have come forward, sources in the state horticulture department said.

Presently, there are 68 cold storages with a combined capacity of 210,000 metric tonnes in the state, of which four are under the state government control and four are operated by the cooperatives, while the remaining are with the private sector.

However, only 70,000 metric tonnes of cold storage capacity is currently utilised, mainly because the existing cold storages are built for single commodity usage. Lack of different temperature levels in these cold storages is the biggest hurdle for the effective utilisation, the sources told Business Standard.

The existing cold storages are used to store commodities like chilli in Haveri district, potato in Hassan district, grape and pomegranate in Bijapur, Bagalkot and banana, mango and apple in Bangalore districts.

In an effort to modernise the cold storage network in the state, the horticulture department has announced several schemes under the NHM project.

The project provides 25 per cent capital subsidy for setting up new unit or modernisation of existing units. However, till now only two firms from Bellary and Chennai have shown interest for either modernisation or setting up of new multi-commodity cold storages.

Chennai-based Western Farmfresh Pvt Ltd, which operates several cold storages across the country, has taken on lease the state owned cold storages at Lalbagh in Bangalore and Kolar and has modernised the Lal Bagh unit at a cost of Rs 1.5 crore.

Barring these two proposals the horticulture department has not received any other application from the private sector, the sources said. In addition to these, the department has also sanctioned funds for purchase of refrigerated vans by two firms.

Said N Pattabhi Reddy, Director, Western Farmfresh Pvt Ltd, "It is not just enough to set up a cold storage. Actually, there needs to be a greater participation by the farmers at the village level to make any cold storage successful. We need to set up pack houses, grading and washing units at the farm level to achieve desired results and our country is lacking these initiatives."

The NHM project has enabled the state department to undertake many infrastructure development activities such as establishment of processing units, hi-tech green houses, production of planting material and post harvest management systems like pack houses, pre-cooling and cold storage units, refrigerated vans among others.

Meanwhile, higher operational costs, particularly exhorbitant power charges and transportation costs have left the private sector to neglect the maintenance of these cold storages. Power costs are higher by at least 50 paise to Re 1 per unit in Karnataka compared to Tamil Nadu, adds Reddy. He said the power situation is worse in the rural areas which makes it economically unviable to operate the cold storages.