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.
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.
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.”
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:
|Total No of cold rooms||5||15||19||30|
|Total crate inventory||750||2,250||2,850||4,500|
|% of crates used||70%||70%||80%||80%|
|Rental rates per crate||US$0.32||US$0.50||US$0.50||US$0.50|
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.
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.
Sources, references and links:
- Featured image: Farmers of the Nueva Ecija agricultural region of the Philippines. Photo by Levi Nicodemus on Unsplash.
- “DA installs first solar-powered storage system”, June 26, 2021, The Manila Times
- “Post Harvest Losses Can Be Reduced By Solar-Powered Cooling”, November 10, 2020, Ecozen
- “Good practice in the design, management and operation of a fresh produce packing-house”, 2012, Food and Agriculture Organization of the United Nations, Regional Office for Asia and the Pacific, Bangkok
- “DA, DOTr, DOE MOA Signing for the ‘Palamigan ng Bayan’ Program”, March, 12, 2021, Philippines Department of Agriculture
- Webinar (Full): Policy Forum | Creating a Sustainable Cold Chain in the Philippines, June 29, 2021, Philippine Ports Authority, CCI-Hub
- Webinar (Full): Technical Training Workshop | Advanced Technologies for Transport Refrigeration, June 25, 2021, Carrier Transicold, CCI-Hub
- “Meet the Global CaaS Prize Winner: ColdHubs”, August 17, 2020, Basel Agency for Sustainable Energy (BASE)
- “Nnaemeka C. Ikegwuonu, Founder and CEO, ColdHubs – Presenter”, October 4, 2018, International Food Policy Research Institute
- Webinar (Full): Solar Cooling for the Food Cold Chain, December 10, 2020, CCI-Hub
Cold Chain Innovation Hub