Cold storage facilities, reliant on government-regulated rents for preservation, have amassed a significant loss of Rs 21.35/quintal until 2021.
According to the members of the Cold Storage Association, the approved government rent consistently falls short of the Expert Committee’s recommendations, rendering the industry financially unsustainable.
“Despite appeals and a committee recommendation in January 2023 for rent revision, the government has not adjusted cold storage rent since 2021,” said the WBCSA.
The expert committee notes a persistent disparity between their recommendations and the government-approved rent, exacerbating over the years. This widening gap has rendered cold storages economically unviable, ultimately leading to their classification as non-performing assets (NPAs) by banks.
“The inability to modernize storage units due to a lack of surplus funds further compounds the challenges, preventing us from offering up-to-date services to hirers,” said members of the cold storage association.
The committee had also recommended a revision in January 2023, suggesting rents of Rs 190/quintal and Rs 194/quintal for south Bengal and north Bengal, respectively. Consequently, there has been an under-recovery of Rs 9.95/quintal for the period from 2021 to 2022.
WBCSA president Sunil Kumar Rana, while addressing a press conference, expressed dissatisfaction stating, “Despite awareness that cold storage rent in other states range from Rs 230 to Rs 270 per quintal, we are compelled by government orders to operate for Rs 168 to Rs 172 per quintal. This has resulted in a monetary loss of Rs 31.30/quintal over the past two years, preventing us from modernizing our units.
As a consequence, farmers and hirer consumers are denied access to modern preservation techniques. Many members are succumbing to a debt trap, leading to closures or the classification of units as NPAs. The imminent impact on the rural economy necessitates urgent intervention to mitigate the financial losses in the cold storage industry.”
The total count of cold storage units is 560, with 470 dedicated to potatoes, and only 470 currently operational. Most government-owned cold storages have ceased operations, and North Bengal reports a total of 60 active units.
As part of the licensing domain, 250-270 licenses were submitted to the state government.
(Taniya Acherjee is an intern at the Kolkata office of The Indian Express)