Agro-produce supply chain in India (focus Bengaluru)

Abstract

India has traditionally been an agrarian society with over 50% of the population still working in farms and allied industries. Although the Indian economy is going through several structural changes, India ranks second in farm output and agriculture contributes about 16.6% of our GDP. The Government has promoted agriculture actively through minimum support prices, farm input subsidies, preferential credit schemes and import quotas ever since independence and India is self-sufficient in several food crops today. Yet, the distribution of agro-produce continues to be a daunting challenge and thousands of people die of hunger even today. Emerson Climate Technologies has estimated that about INR 440 billion worth of fresh produce is wasted in India every year only due to lack of technology solutions and cold storage facilities. The economic contribution of agriculture to India’s GDP is declining steadily but it continues to play a significant role in the socio-economic fabric of the country. A major chunk of the agricultural produce is distributed through unorganized channels or consumed locally. These traditional supply chains are dominated largely by politically affiliated groups and direct access to farms is strongly resisted through political and social movements. Hence, farmers in rural areas do not appropriate fair returns on their agricultural output even today. In 2011, 14,207 farmers committed suicide, mostly due to their inability to repay the petty loans they had taken to sustain their small farms. The focus of this contemporary concerns study (CCS) has been on this traditional supply chain as well as evolving supply chains used by some modern trade formats. Specifically, we have mapped the various players that are responsible for bringing the fruits and vegetables we get in Bengaluru from farm to fork. By understanding how the supply chain works, we aimed to discover inefficiencies in the operations and how modern retail has mitigated through these problems. In doing so, we have explored the unstated underlying contracts that govern the relationships between these players and farmers and how it can be expanded over a large scale. While political delinking of the aggregator agents seems to be the most crucial element in truly improving the supply chain efficiency for small farmers, further advances in supply chain development may be realized through adoption of various technological solutions to aid in farm preparation, demand estimation, logistics and last mile distribution.