An average Indian is spending much more on buying fruits, vegetables and
milk products than cereals and pulses. The latest National Sample Survey Office
(NSSO) data shows that spending of an Indian has more than doubled on buying
fruit, vegetables and milk products in the last five years whereas expenditure
on cereals and pulses has increased by only between 33 to 75% (Chauhan,
2013) .
Today’s
food inflation is less about food grain, more about fruit and vegetables, eggs,
fish, meat and dairy products. This article
focuses mainly on these commodities presenting different challenges and
inefficiencies in the present value chain, highlighting the role of phase
change materials in improving the situation.
The largest consumer
segment to focus is the urban areas. This segment is crucial in virtue of its high
population growth rate that has increased many-folds from 79 million in 1961 to
377.1 million in 2011. This has led to putting an increasing pressure on the
agriculture sector to produce more. However, more than the productivity
increment, the development of effective food supply chain is of utmost
important to satisfy the hunger of the growing population. The agriculture
value chain is of central substance to all the farmers, processors, logistics
partners, wholesalers and retailers. The supply-side constraints are
influencing the food prices largely both at local, national and global level.
Market imperfections, like lack of proper infrastructure in rural areas,
shortage of storage and transportation facilities further add to food inflation
(Ministry of Agriculture, 2012). All of these points converge to the point,
that there is urgent need to deal with the inefficiencies in the whole
agriculture value chain.
Need
to optimize consumption of fuel
An increase in fuel prices has both obvious and more
subtle impacts on inflation. One type of impact is straightforward - fuel
prices (along with lighting) have a share of about a tenth in the overall
basket of goods used by the government to calculate consumer inflation. So any
increases in petrol or diesel or LPG prices will automatically result in the
inflation rate inching higher (Celestine, 2013) . In 2011, the RBI, in
a study, assessed that a 10% increase in domestic fuel prices could raise
overall wholesale prices by about one percentage point in the short run. In the
longer-run though, that 10% impact, would cause inflation to rise by about two
percentage points.
Need to counter the effects of long
transportation time
The farmers incur labor costs for loading
and off-loading of agriculture produce and weighing costs also, which increases
their total cost of selling their agricultural produce, reducing their income.
It is estimated that the total cost of transportation of the agriculture
produce from farms to the wholesale markets accounts for nearly 10% of the
total value of agriculture produce in many cases. The total time taken by the
farmer to transport the produce sometimes takes 3-4 hours which is a big pain.
Many times, farmers don’t even negotiate the price of their agriculture produce
with the broker before going to wholesale market. As a result, they are bound
to sell at the given price at that particular time in order to save the costs
of transporting the agriculture produce back to their farms.
The situation gets
worse when these commodities are transported from one state to other through
the network of middlemen and wholesalers again causing high loss in terms of
both quality and quantity of the horticulture commodities. The degradation of
the horticulture commodities caused due to longer transportation time attracts
adulteration in the horticulture commodities. Various types of harmful
chemicals and injections are used to improve the visibility of the commodity so
that it seems to be fresh to local consumers. As most of the wholesale and
retail markets don’t have any effective mechanism to check the quality and
artificial freshness of the horticulture commodities, it has severe harmful
consequences on health and environment.
Passive
cooling Technology
With the above backdrop
to the problem areas resulting in high cost of fruits & vegetables, one solution
that can positively impact the cost of storage and transportation of
temperature sensitive commodities is phase change Materials (PCM) technology.
PCMs are passive cooling materials which have the potential to reduce 80% and
more of the operating cost incurred due to diesel consumption. Phase Change Materials fall under the sub category
of energy exchanging smart materials. Energy exchanging smart materials is
defined as those materials that are able to store latent and sensible energy in
the form of light, heat, electricity or hydrogen and exhibit reversibility. A PCM has the ability to store and release
large amounts of heat/energy while maintaining a constant temperature.
PCMs are engineered to change their phase (solid to liquid or vice
versa) at a specific temperature and one should look at the following three
factors to qualify a PCM;
1) High thermal storage capacity in the form of
latent heat (200KJ/Kg or above)
2) Constant temperature maintenance during the
release of stored energy.
3) Guaranteed repeatability in performance for over
3000 times.
The benefits of the above features are;
·
Precise
temperature control allowing not more than +/- 1°C of error.
·
Longer
duration of retention period – upto 18 hours due to high latent heat.
·
Reduction
in the overall weight of the freezer due to high energy storage to weight ratio
of the PCMs.
PCM’s have tremendous potential to fulfill the growing need
of energy for cooling and heating applications across various industries. The
PCM based transportation application market offers a large potential in developing
countries as these account for 60% of the global exports. India though accounts
for just 1.5% of the total export, the demand is growing at a CAGR of 20.61%
and 7.21% for fruits & vegetables respectively (Trade, 2013) . The total
production of fruits & vegetable accounts for 14% of the world’s production (Trade, 2013) . Passive cooling
technologies can drastically reduce the price to the consumer while reducing
the cost of wastage & transportation at the upstream of the supply chain.
In temperature control transportation
80 – 90% of operating cost can be reduce by reducing the dependability on
diesel. PCM based trucks once charged for 8-10 hours using electricity can
provide refrigeration for about 12 hours during the journey. This puts lesser
pressure on the farmers or sellers to sell the commodity on the same day there
by enabling them negotiate. PCM helps in using the energy when it is cheap and
store it for use during operation. The concept can be used even for cold stores
similarly to save on the diesel cost during power outages by keeping energy
stored in PCM for backup. In the above figure 1 shows a comparison of the
savings in operating cost between a conventional reefer truck and a truck using
phase change materials. This is achieved at a little or no difference in the
capital cost which is paid pack within a year.
The phase
change material market is estimated to grow from $460 million in 2013 to $1,150
million by 2018, growing with a CAGR of 20.1% during the same period (Markets,
2013)
. Factors such as government policies, unpredictable climatic changes and lack
of infrastructures will continue to contribute to rising inflation. It is the
need of the hour to adopt and implement innovative technologies such as phase
change materials to prevent further losses.
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