Supply chain management

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Definition : Supply chain is a system that links a company with its supplier & customer. It is about getting right things done at right time & place in cost - effective manner.

Input -> production -> procurement -> storage -> primary processing -> secondary processing -> retailing


  • Share in GDP: 14% (Service > Industries > Agriculture)
  • Share in employment: ~49% (Agri > Services > Industries)
  • 1st rank in Milk (17% of world production)
  • 1st rank in Mango, banana, coconut, cashew, papaya,peas, cassava and pomegranate
  • Largest producer and exporter of spices
  • Overall, second largest producer of vegetable, fruits and fishes
  • Weather permits multiple crops throughout year.

Challenges in Supply Chain

  • Lack of infrastructure like cold storage facilities, last mile linkage, lack of private investment.
  • India has small size farms, thus poor are unable to take advantage of forward and backward linkage.

Contract Farming

  • Agreement between farmer & food processor
  • Contracted to plant specific crop on pre-agreed price
  • Training , input, technology is provided by food processor
  • It increases private investment in agriculture
  • It is win-win situation for both parties as it increases production and quality.
  • Example - Pepsi has done contract farming for growing tamato in Hoshiarpur. Pepsi has also partnered for growing newer variety of oranges.

Terminal Market

  • Often in metropolitian cities
  • It is assembly and trading place for agriculture commodities.
  • It operates on hub and spoke model, where terminal market act as hub.

Issues in Export

  • Improper connectivity
  • More tax on air cargo
  • India has more than 1500 varieties of mangoes , however only 3-4 are exported.
  • India has old varieties of Potato - irregular shape and size which are not suitable for industrial processing, Oranges have high bitterness level hence jucie concentrates are imported for making jucie., Apple have cardboard like texture & thus taste odd.
  • Japan requires vapour treatment, Australia have banned indian produce due to fruit fly, stone weevil.
  • India is not apple to fullfill CODEX and HACCP standards

Initiatives taken by Government

  • Encouraging cold storage to reduce spoilage , distress sale, transportation problem in peak season, maintain quality and increase shelf life.
  • Introduction of Horticulture train having good ventilation, high speed that can accept small quantity. This will help reduce spoilage and enable small farmers to transport their produce at lower cost.
  • Kishan Vision Project - wherein CONCOR (Container corporation of India Ltd ) , CWC (Central warehousing corporation) and CRWC (Central Railside warehousing compnay) have come together for transportation of agriculture produce.
  • Six perishable cargo centre - Azadpur, Singur, Nasik, Dankuni, Jalpaigudi (NJP) and Mursidabad have been created for rapid transportation of agriculture commodities.

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