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Cold storage financial impact model

Produced with support from
Shell Foundation UKaid

What this model does: Compares three cold storage facility types to find which best matches a cooperative's size and economics. It calculates whether each facility is financially sustainable from usage fees alone, and the net income change for individual farmers after they pay storage fees.

How to use it: Set the cooperative size, facility costs, subsidy levels, farmer production characteristics, and expected impact factors to test different investment scenarios.

This is the total number of farmers, traders, or other users who will store produce in the facility and pay usage fees. More users means more revenue to cover costs, but also more demand on limited storage capacity.
Total storage demand: farmers × crates each = crates/month ( kg)
Small group
10-50 farmers
Medium cooperative
50-120 farmers
Large federation
120+ farmers

Facility equipment costs

The upfront capital cost of purchasing and installing each facility type. Costs vary by region, technology, and whether grid connection is available.

Subsidy and financing

How the facility purchase is funded. Most cold storage projects require significant grant funding (40-60%) to be financially viable.

Farmer production characteristics

The baseline economic situation of a typical farmer using the facility. These parameters determine how much each farmer benefits from cold storage.

Subsistence
$50-100/mo
Smallholder
$100-250/mo
Commercial
$250+/mo

Storage usage and expected impact

How farmers use the facility and what benefits they can expect. Impact estimates are based on peer-reviewed studies from Nigeria and China.

Expected impact (evidence-based defaults)

Facility comparison for farmers

⚠ No well-matched sustainable option found. Consider: increasing the subsidy percentage, adding more users, raising usage fees, or selecting farmers with higher production volumes.
How this model works: Farmer benefits compare two scenarios for stored produce: (1) baseline without cold storage at regular prices with high spoilage, vs (2) cold storage with reduced spoilage at premium prices. Cold storage reduces losses proportionally (e.g., 90% reduction means 40% baseline → 4% final). All surviving produce gets premium prices. Benefits are multiplied by system reliability and profit margin. Farmer costs are usage fees: crates stored × days × fee rate. A facility is considered sustainable when total fees from all users cover operating costs and loan repayments. Under-utilized facilities spread fixed costs across too few users; over-capacity facilities reduce individual storage access due to crowding.

Evidence base: Li et al. (2025) China cold storage study: 13.2pp average loss reduction (range 5-20pp), $5.84B total economic benefit across 6.6Mt of produce; Takeshima et al. (2023) Nigeria solar cold storage: 85-95% loss reduction, 15-20% price premium, 69% increase in sales volume; ColdHubs Nigeria: $28,500-40,000 per 3-ton unit serving 50-200 users at $0.25-0.50/crate/day; UNEP Kenya cold chain: 50% farmer income increase.
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