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Transforming Farm Fresh Supply Chains

Dr. Rakesh Singh
2nd April, 2020

Why India needs to invest in technology in its farm to fork supply chain urgently to reduce wastage.

The farm fresh supply chain in India requires multifold redressal. Fruits and vegetables, fish, bread, packaged salad and other consumer goods need supply chains that will bring it to retailer shelves quickly and in the best possible condition. There is an abject lack of understanding about the drivers of farm fresh supply chains – including infrastructure challenges. With the result, we waste 40% of our produce. In this article, Dr. Rakesh P. Singh focuses on farm fresh supply chains –the major supply chain constraints and ways to overcome them.

Sourcing of fresh farm products needs speed and efficiency and thus requires infrastructure ecosystem. Time distance and support system in India makes supply chains difficult. The risk of sourcing is amazingly high. In subsistence agriculture dominated by APMC regulations getting the right product of right quality and at the right price is the biggest challenge.

Let us start from economics of the source and move to destination. Farmers in India do not know the market demand and the direction in which it is moving. The produce never reaches the market in time, there are too many intermediaries in the process, and efficient aggregators are absent. The net result is a poor agricultural ecosystem neither beneficial to farmers nor corporates. This is the primary change we need. This requires a concerted effort to bring structural shift in agriculture through removal of APMC act and encouragement of capital investment in agriculture by corporates and helping shift production in response to demand.

How should logistics and supply chain develop to support fresh produce transportation and storing? Fresh produce wastage is almost to the tune of 40 to 50 percent. We do not have cold chain or cold transportation. The cold chain industry is in infancy and fragmented. This is not in tune with growth potential we have in the domain of perishables. India can be a leader in fresh produce if we fix the above two problems.

India has a huge competitive advantage in Agri and farm produce exports. Fresh produce can only reach their destinations if we have well designed multi modal logistics, with airports playing a significant role by creating Farm zones and connecting them with both inward and outward logistics -seamlessly integrating with the storage facility and aircraft belly. The 3PLs can play a great role by collaborating with all the players.

If we focus on the above three and integrate AI, Drones and Cold chain technology appropriately and effectively, we can reduce losses and bring in visibility in farm fresh supply chain. This will transform the economics both for farmers and processors. ♦♦♦♦♦

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