UPSC Relevance-GS Paper 3: Agriculture, Infrastructure, Food Processing, Inclusive Growth
Why in News
The Union Cabinet, in July 2025, approved an additional ₹1,920 crore outlay for the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), taking its total allocation to ₹6,520 crore for the 15th Finance Commission cycle (up to March 2026).
A major portion of this funding—₹1,000 crore—is earmarked for setting up 50 multi-product food irradiation units under the Integrated Cold Chain and Value Addition Infrastructure (ICCVAI) component.
This move highlights India’s renewed focus on strengthening cold chain infrastructure, reducing post-harvest losses, and enhancing farmer incomes.
Background
India loses nearly 30–35% of its perishable produce—such as fruits, vegetables, milk, and fish—due to inadequate cold storage and processing infrastructure.
Recognizing this challenge, the Ministry of Food Processing Industries (MoFPI) launched the Integrated Cold Chain and Value Addition Infrastructure (ICCVAI) scheme in 2008 under the PMKSY umbrella to ensure seamless storage, processing, and distribution from farm gate to consumer.
Over the years, the scheme has evolved into a comprehensive initiative to modernize India’s food logistics ecosystem and boost agricultural value chains.
What is the ICCVAI Scheme?
The ICCVAI Scheme is a Central Sector Scheme implemented by the MoFPI to support the creation of integrated cold chain and preservation infrastructure without any break in the supply chain—from the production site (farm) to the consumer market.
It is demand-driven, allowing entrepreneurs, farmers, cooperatives, and companies to propose and implement projects suited to regional agricultural needs.
Its aim is to reduce post-harvest losses, enhance value addition, and ensure remunerative prices for farmers while maintaining quality and safety standards for consumers.
Objectives of the ICCVAI Scheme
The founding objectives were designed for holistic cold chain development:
- Seamless Cold Chain:Establish an integrated system that maintains the optimal temperature throughout the value chain—from farm to consumer.
- Reduce Post-Harvest Losses:Minimize wastage of perishable goods through scientific preservation and timely transportation.
- Preserve Quality:Maintain freshness, nutrition, and quality of produce using advanced storage and processing methods.
- Value Addition:Enhance shelf life and marketability through primary and secondary processing.
- Enhance Farmer Income:Enable farmers to avoid distress sales by storing produce during surplus periods and selling later at better prices.
- Steady Food Availability:Ensure year-round supply of food products at stable prices, benefiting both producers and consumers.
(Source: Ministry of Food Processing Industries)
Key Components of ICCVAI
Under the May 2025 Guidelines, an applicant seeking financial assistance must develop Farm Level Infrastructure (FLI) and connect it with either a Distribution Hub (DH) or refrigerated transport facilities.
Main Components:
- Farm Level Infrastructure (FLI):Includes pre-cooling units, primary storage, and handling facilities at the farm level to preserve freshness immediately after harvest.
- Processing Centres:A mandatory component that covers sorting, grading, and primary processing of produce to add value and maintain uniform quality.
- Distribution Hubs (DH):Centralized storage and dispatch centers for efficient aggregation and supply management.
- Refrigerated Transportation:Deployment of refrigerated trucks, insulated vans, and mobile insulated tankers to ensure cold chain integrity throughout transit.
(Source: MoFPI, 2025 Guidelines)
Eligibility of Project Implementing Agencies (PIAs)
The ICCVAI scheme is demand-driven, open to a wide range of eligible entities who can set up food processing or cold chain units.
Eligible PIAs include:
- Individuals (including farmers)
- Farmer Producer Organisations (FPOs) and Farmer Producer Companies (FPCs)
- Non-Governmental Organisations (NGOs)
- Public Sector Undertakings (PSUs)
- Firms, Companies, Cooperatives, and Self-Help Groups (SHGs)
The Ministry of Food Processing Industries (MoFPI) invites proposals through Expressions of Interest (EOIs) based on fund availability.While State consent is not mandatory, their assistance is encouraged for on-ground implementation.
Key Government Initiatives Complementing ICCVAI
Several other government programmes work in synergy with ICCVAI to create a robust post-harvest ecosystem.
1. Mission for Integrated Development of Horticulture (MIDH)
Provides credit-linked back-ended subsidies for cold storage (up to 5,000 MT) —
- 35% subsidy in general areas,
- 50% subsidy in NE, hilly, and scheduled areas.This mission supports cold chain infrastructure for fruits, vegetables, and horticultural produce.
2. Operation Greens Scheme
Launched under PMKSY (2018–19) to stabilize prices and promote the Tomato, Onion, and Potato (TOP) value chain—later extended to other fruits, vegetables, and shrimp.
It aims to enhance value realization for farmers and reduce post-harvest losses.
3. National Horticulture Board (NHB)
Implements a Capital Investment Subsidy Scheme for cold storages and Controlled Atmosphere (CA) storages (5,000–20,000 MT).
- Offers 35–50% subsidy, depending on region.
- Promotes scientific storage and loss reduction.
4. Agriculture Infrastructure Fund (AIF)
A ₹1 lakh crore corpus to finance post-harvest and community farming assets, including cold storages and processing units.
- Provides collateral-free loans up to ₹2 crore with 3% interest subvention.
Together, these initiatives complement ICCVAI by creating an integrated infrastructure ecosystem from production to processing to marketing.
Financial Assistance under ICCVAI
In July 2025, the Union Cabinet increased the PMKSY outlay to ₹6,520 crore, including ₹1,000 crore for food irradiation units under ICCVAI.
This reflects the government’s strong commitment to expand cold chain reach and efficiency.
Funding Pattern:
● 35% grant of eligible project cost in general areas
● 50% grant in difficult areas, and for FPOs, SHGs, and SC/ST beneficiaries
● Maximum assistance: ₹10 crore per project
Difficult areas include:Northeastern States (including Sikkim), Uttarakhand, Himachal Pradesh, J&K, Ladakh, ITDP regions, and islands.
Achievements and Progress
As of June 2025:
● Total projects approved: 395
● Operational projects: 291
● Preservation capacity created: 25.52 LMT/year
● Processing capacity created: 114.66 LMT/year
● Employment generated: 1.74 lakh jobs
After 2016–17, progress accelerated with ₹1535.63 crore released for 269 approved projects, out of which 169 have been completed.This surge reflects stronger institutional focus, streamlined funding, and private sector participation.
Major Revisions and Policy Updates
The ICCVAI scheme has evolved through continuous policy refinements:
- June 2022 Revision:
● Cold chain projects for fruits and vegetables shifted to Operation Greens for specialized management.
● Promoted sectoral focus and better resource utilization. - August 2024 Guidelines:
● Introduced support for multi-product food irradiation units — a modern technology using ionizing radiation to preserve food, extend shelf life, and ensure food safety. - May 2025 Revision:
● Latest guidelines strengthened infrastructure from farm gate to consumer.
● Focused on non-horticultural produce and farmer price realization while ensuring year-round food availability.
Conclusion
The evolution of the ICCVAI Scheme reflects adaptive governance and modernization in India’s food processing sector. The 2022 realignment under Operation Greens and the 2025 budget boost highlight the government’s commitment to expanding cold chain infrastructure.
By integrating modern preservation technologies, irradiation facilities, and digital tools like IoT and AI, the scheme aims to reduce post-harvest losses and enhance farmer incomes. Its inclusive financial framework empowers farmers, cooperatives, and private players, paving the way for a sustainable and farmer-centric cold chain ecosystem in India.
UPSC Mains Practice Question:
Q“Evaluate the role of the ICCVAI Scheme in strengthening India’s agri-value chain and minimizing post-harvest losses.”(150 WORDS)