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 importance 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 optimise 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 increase 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 labour 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 to 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;
High thermal storage capacity in the form of latent heat (200KJ/Kg or above)
Constant temperature maintenance during the release of stored energy.
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.
Value addition – three functions in one product
PCMs 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 and vegetables respectively (Trade, 2013).
The total production of fruits and 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 and transportation at the upstream of the supply chain.
In temperature control transportation 80 to 90% of operating costs can be reduce by reducing the dependability on diesel. PCM based trucks once charged for 8 to10 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 back 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.
