India has been facing numerous challenges over the decades when it comes to the agricultural sector. One of the prominent ones out of many pertains to the distribution of food grains from storage facilities, distribution networks, and retailers. Even during seasons where there is a surplus due to better yield, it is often the case that supply chain hindrances undo the advantage.
Reports suggest that there is approximately 30 percent wastage of food post-harvest at every stage. It is a huge number for a country like India, which struggles to feed a population of its size, as it is home to millions of malnourished and underfed children who have less than 2 meals a day.
Moreover, the losses are occurring both at storage locations, as well as during transportation. Keeping track of the inventory without the assistance of technology and computers can be a daunting task. India now requires a stronger supply chain ecosystem that is integrated with blockchain enabled platforms and other technologies.
Ways to Counter Food Grain Losses
With the advent of technology, things have surely begun to change in terms of better warehousing solutions for food grains. With a few changes, warehouses can adhere to some basic scientific practices, which can ensure better storage. Through these warehousing measures, about 10-15 percent of the losses could be saved, which could then have a great impact on the population in terms of pricing, as well as supply.
However, the misconception for many has been that fixing warehouse management and storage operations of agricultural produce can resolve all supply chain-related issues. This cannot be further from the truth, as sound supply chain practices enable an environment to monetize agri-supplies in regions with external shortcomings as well.
In the absence of requisite warehousing facilities in remote areas, efficient supply chains help farmers monetize their produce through facilitation of markets and purchasing agri-commodities at the appropriate time. In addition to this, several tech-enabled solutions are being launched of late, which provide agri-supply chain solutions in a bid to ease out the procedures for all stakeholders, including investors, retailers, and warehouses, etc.
New-Age Solutions, Their Enablers, And Supply Chain Effectiveness
Emerging agri-commodities and trade finance companies have created an ecosystem wherein the complete supply chain is captured, from the producer to the processor and with impact at ground level through disintermediation and price discovery. Trade finance companies have also been launching blockchain enabled mobile applications, which provide better transparency and clarity in the procedures. They ensure that all transactions, commodity prices, purchasing and selling operations are performed through a transparent, efficient, and trustworthy, thereby allowing all stakeholders a skin in the game. Beyond such platforms and services start-ups are also catering to other requirements, through agri-commodity instruments such as pass through certificates (PTCs) to institutional investors, who are keen on making financial gains from the agri-commodities market. The national government on its part is encouraging more agri-based initiatives from entrepreneurs to eradicate abject poverty and food grain loss.
As compared to other commodity markets, agri-commodities trade generates a lot more liquidity due to the sheer size and nature of localized operations. However, for the reasons of efficiency, the establishment of robust supply chain procedures is a requirement. It ensures that the liquidity in the ecosystem leads to seamless buying and selling. When there is a lack of liquidity at any stage of the process, it brings limitations to the trade. This in return affects the movement of goods, transparency and other restrictions, which further leads to unnecessary delays, pilferage, loss of food grains, and quality issues such as spoilage of agri-produce.
Taking a Holistic Approach
All elements of the supply chain have to fall into place for a smooth running of a system that operates both at the local and national levels. Location-wise efficiencies can be achieved only if the complete ecosystem functions to certain standards, and the harmonization of these basic practices. Like any other industry which depends on the smooth running of end-to-end operations for its success, supply chain management is far too comprehensive to be confined to silos such as just storage, trade, or financing.
All the above aspects need to be addressed, like in the case of the emerging agri-tech companies that are bringing tech-enabled solutions coupled with a 360-degree understanding of the agricultural ecosystem for all stakeholders. Through the elimination of middlemen who affect pricing, food grain pilferage, and untrustworthy transactions, the investors and retailers will be able to pay the right price for the commodity. They will not need to consult with local operators and waste precious time every time they have to take a financial decision.