Using Cold Storage to Reduce Postharvest Loss

Farmers of the Nueva Ecija agricultural region of the Philippines. Photo by Levi Nicodemus on Unsplash.
by Devin Yoshimotoin Cold Storage

In June 2021, William Dar, Secretary of the Philippines Department of Agriculture, attended a demonstration of a solar-powered on-farm cold storage system that the government is planning to deploy in rural farms throughout the country. The goal is to deploy these cold storage units throughout remote areas of the Philippines to help reduce postharvest losses and increase income for farmers and their surrounding communities.

In this article, we look more generally at how on-farm cold storage units benefit farmers, how they deal with extreme weather, and provide an example of how they can be operated as a self-sustaining business.

The Ecofrost Solar Cold Storage by ecoZen
The Philippines is working with Next Agri Corp Philippines and India-based Ecozen, makers of the Ecofrost solar-powered cold room (pictured above), to launch cold storage units in remote areas throughout the Philippines.

Cold storage reduces postharvest loss by increasing flexibility

In our June 2020 research report on “Evaluating the Philippines’ Food Cold Chain, Energy Efficiency and Environmental Impact”, we found that near the farm cold storage equipment was a key missing element in the Philippines’ food cold chain.

On-farm cold storage equipment can also be thought of as a walk-in cold room that is cooled by a refrigeration system. Using a refrigerated cold room provides three key benefits for farmers (from the Food and Agriculture Organization of the United Nations in 2012):

  • Refrigeration allows farmers to wait for a better price for their produce. The FAO explains that “without refrigerated storage, many farmers have no choice but to dispose of their produce as quickly as possible before ripening and/or deterioration sets in. This puts them at a disadvantage when negotiating prices with a potential buyer.”
  • Refrigeration evens out the supply of a commodity during the year. The FAO explains that “an oversupply of many commodities is common during the harvesting season, resulting in very low farm-gate prices that discourage farmers from harvesting their crop.”
  • Refrigeration increases the volume of sales and income by reducing spoilage. The FAO explains that “the reduction in temperature slows down deterioration and ripening, reducing the number of rejects and increasing selling prices.”

Refrigeration generally extends the shelf life of produce from two days to around 21 days. This increased flexibility in timing creates a buffer to better match supply and demand, minimizing postharvest loss and eliminating the waste in labor, energy and greenhouse gas emissions that result from over production and spoilage.

Slide from the Philippine Ports Authority presentation on the "Palamigan ng Bayan" program during the CCI-Hub Policy Forum on June 28, 2021
The Philippines also began implementing the “Palamigan ng Bayan” program in March 2021 to provide refrigerated containers to farming and fishing communities in the Philippines (slide from the Philippine Ports Authority presentation during the CCI-Hub Policy Forum on June 28, 2021).

Cold storage containers are designed for durability

One of the main issues with on-farm cold storage equipment is that they must be extremely durable in order to survive extreme weather like typhoons, floods and high heat.

Carrier Transicold makes refrigerated containers that are used for international freight shipping. In our June 2021 webinar on Advanced Technologies for Transport Refrigeration, Suresh Duraisamy, Associate Director for Global Container Refrigeration at Carrier Transicold, spoke about how their refrigerated containers can be also used as on-farm cold storage and how they would deal with extreme weather.

Suresh explained that their refrigerated containers “are designed for marine use where the units are installed on the deck of a ship,” so that means they can withstand sea water splashing on them.

“The compressors are mounted a little higher and even if you have up to a foot of water, it can sustain [operation] without any problems,” Suresh said. “So, rain should not be a problem at all. They are also tested and designed to work in up to 50°C (122°F) ambient temperatures.”

Slide from Carrier Transicold's presentation during the CCI-Hub Technical Training Workshop on June 9, 2021
Carrier Transicold’s 20-foot NaturaLINE® Refrigerated Container Unit (slide from Carrier Transicold’s presentation during the CCI-Hub Technical Training Workshop on June 9, 2021)

Cold storage can be operated as a pay-as-you-go business

Even though these benefits may be clear, cold storage equipment is still too expensive for most farmers. But some entrepreneurs are demonstrating that there is a viable business model that can justify the investment.

Nnaemeka Ikegwuonu is the founder of ColdHubs, a company in Nigeria that is providing solar-powered and natural refrigerant-based walk-in cold rooms to farmers at their farms and local markets.

In a presentation he gave in 2018, he outlined his revenue model as well as his financial figures and projections (see the full video here).

ColdHubs charges its customers $0.50 USD to store one 20kg plastic crate of produce per night in the cold room. Each cold room holds 150 crates. 100% utilization is equal to $75 USD per day or $27,375 USD per year. The financials that Nnaemeka presented in one of his slides are shown below:

2017201820192020
Total No of cold rooms5151930
Total crate inventory7502,2502,8504,500
% of crates used70%70%80%80%
Rental rates per crateUS$0.32US$0.50US$0.50US$0.50
RevenueUS$32,130US$173,250US$369,000US$527,400
SalariesUS$20,150US$37,800US$51,700US$60,500
Operational costsUS$4,800US$12,250US$9,600US$23,900
Total ExpensesUS$24,950US$50,050US$61,300US$84,400
Net IncomeUS$7,180US$123,200US$307,700US$443,000
From Nnaemeka Ikegwuonu’s ColdHubs presentation on October 2, 2018 on Youtube

In addition, the equipment is solar-powered and uses natural refrigerants. This reduces the risk and exposure that the business would have to high electricity costs or the environmental regulation of HFC refrigerants.

For those who have the funds and can invest, Nnaemeka’s ColdHubs operation shows that there can be a clear path to making a return on the investment while at the same time reducing postharvest loss and increasing income for farmers and their surrounding communities.

Solar-powered walk-in cold room business ColdHubs was featured in this video as a prize-winning implementer of the Cooling as a Service business model for smallholder farmers in Nigeria.

More training and components will be needed

The Department of Agriculture pointed out, however, that there will still be need for a local network of supporting technicians and equipment components in order to make sure the cold storage equipment can be properly serviced and maintained after it is installed.

The Cold Chain Innovation Hub project aims to help fill this gap by providing training and certification on cold storage refrigeration technologies. Our physical training and exhibition space is set to open soon at the TESDA Regional Training Center NCR in Metro Manila. The space will have actual equipment on-site with technical experts available for training later this year.

To stay updated on the latest updates, make sure to sign up for our newsletter. You can also check out our “Solar Cooling for the Food Cold Chain” webinar, where we go into detail about how solar energy can be used to power a cold storage equipment for the food cold chain in the Philippines.