Ever wonder why iceberg lettuce can’t be purchased year round in Ukraine at affordable prices, or why a fruit or vegetable prematurely spoils after buying it?
Chances are that these unfortunate realities in Ukraine are linked to the lack of proper refrigeration along the supply chain, as well as handling and packaging.
Industry experts say that an astonishing 60 percent of fruits and vegetables harvested in Ukraine don’t make it to consumers because of poor logistics and temperature control management.
That’s twice what perishes in the Netherlands and above other European Union countries.
To rectify the problem, Ukraine’s Agriculture Minister Mykola Prysyazhnyuk is pledging that Ukraine will within years build a new network of refrigerated warehouses for fruits and vegetables. Earlier this year, he acknowledged the large fruit and vegetable shrinkage rate saying: “Unfortunately, current statistics show that more than 50 percent of harvested fruits and vegetables aren’t making it to consumers.”
As a result, already price-sensitive Ukrainian consumers pay more for fresh goods, especially those that are out of season, have a smaller selection year round and the quality of vegetables and fruits is lower.
So-called shrinkage, has much to do with the nation’s under-developed cold storage logistics network and a sub-par transportation infrastructure that functions without national standards, says Yevhen Holub, president of the Ukrainian Cold Chain Association, a non-profit that advocates for better logistics.
As a result, farmers lose 30-35 percent of their produce because of poor post-harvest handling, another 10 percent is lost along the supply chain, and by the time they reach consumers, an additional 25-30 percent perishes, says Agroinvest, a U.S.-funded project.
Many fresh produce require optimal refrigeration during the whole trip from the field to the grocer’s shelf. And whenever there are ruptures in the cold chain, bacteria and moisture settle and accelerate the spoilage process.
This happens often in Ukraine. Many vehicles aren’t equipped with chillers, and when they have refrigeration, the chilling process is disrupted by drivers who turn the equipment off to save fuel.
Poor roads, sorting and calibration compound the problem, says a 2011 study commissioned by the U.S.-funded Local Investment and Competitiveness Project.
Adequate modern storage capacity is another problem along the chain. The same U.S. study says that only 12 percent of fruits and vegetables in the nation are kept in relatively good conditions at current storage facilities.
The U.S.-funded Agroinvest project estimates that $2 billion is required to replace outdated storage facilities in Ukraine. A handful of newly-constructed warehouses with refrigeration have popped up in recent years, foremost in the vicinity of Ukraine’s capital city. But it is largely a desert in others parts of the nation, UCCA’s Holub said.
The shortage has led large retailers like Metro Cash & Carry, Auchan, the Fozzy Group and others to set up their own modern warehouse and logistics networks. For example, Metro Cash & Carry controls 50 percent of fresh food flows to its stores, says Michal Janikowski, Metro’s supply chain department head.
Still, UCCA’s Holub says it’s difficult for large retailers to find local fruit and vegetable suppliers year round because they and the whole system lacks a cold storage and logistics network.
This also drives up costs that get passed on to consumers – the tradeoff for guaranteed freshness. However, in the end, the picture shows a fragmented network of different distributors that are trying to optimize operations relying on their own volumes.
UCCA’s Holub is working to address this problem by lobbying for nationwide standards and to set up a cold chain network by coordinating the efforts of logistics providers, equipment suppliers, producers and retailers.
But until that happens, farmers will continue getting minimal prices for their products after harvesting seasons since they lack proper storage facilities to wait for higher prices. It also is partially the reason why more than half the population buys fresh produce at outdoor markets where produce is usually cheaper yet where sanitary practices and packaging are questionable, and where the quality isn’t assured.
“In Ukraine it makes no sense to look at the ‘use before date’ because (often times) freshness wasn’t respected,” said Holub.
Kyiv Post staff writer Mark Rachkevych can be reached at [email protected].
