Why is there so much food waste?

India’s agricultural infrastructure gap is staggering. We lose an estimated 35% of crops and 15-20% of fruits and vegetables to spoilage every year. Food worth billions that never reaches consumers. There are multiple reasons for this. India’s cold chain coverage remains thin, warehousing capacity is far below demand, and food processing remains underdeveloped relative to our agricultural output. Why hasn’t private investment filled this gap? After all, building cold storage or processing facilities should be profitable if they reduce waste and add value. The problem isn’t a lack of opportunity but legal risk.

Consider a straightforward business model. You invest INR 10 lakh in cold storage for onions and potatoes. You plan to buy when supply is high and prices are low, store the produce, then release it when supply tightens and prices recover. Your profit comes from this seasonal arbitrage. Now, alarmed by consumer inflation, the government imposes stock limits under the Essential Commodities Act, bans exports under the Foreign Trade Act to keep domestic supplies high, and then cuts import duties to introduce competing supplies from abroad.

Overnight, your carefully modelled business becomes unviable. You’re stuck with stored produce you can’t sell profitably, and you might even face penalties for exceeding stock limits. This isn’t hypothetical. It happens repeatedly with onions, potatoes, pulses, and edible oils. In 2019, the government imposed stock limits on onions. In 2020, export bans were imposed on onions. In 2022, export restrictions were imposed on wheat and rice.

Each intervention can seem justified in isolation: controlling consumer prices is a legitimate policy goal. But the cumulative effect is to make agri-infrastructure investment extraordinarily risky. Build cold storage for pharmaceuticals, and no policy change will make your entire investment obsolete overnight. In agriculture, it happens regularly, and investors have learnt to price that risk in, or to avoid the sector entirely. Until policy unpredictability becomes manageable through clear, rules-based thresholds for export restrictions and stock interventions, private capital will not solve India’s infrastructure deficit. The waste is not a market failure. It is a policy failure.