The agriculture sector in India has undergone significant structural changes indicating a shift from the traditional subsistence towards a market oriented one. The rural economy has moved from exclusive reliance on agriculture to a service dominated one that has a stabilizing influence on rural incomes. The decrease in agriculture’s contribution to GDP has not been accompanied by a matching reduction in the share of agriculture in employment.
However, within the rural economy, the share of income from non-farm activities has increased. Since agriculture forms the resource base for a number of agro-based industries and agro-services, it would be more meaningful to view agriculture not as farming alone but as a holistic value chain, which includes farming, aggregating, processing, warehousing (including logistics) and retailing. The term “value chain” describes the full range of activities that are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), delivery to final consumers, and final disposal after use.
In agriculture, value chains have always been in existence in the sense that farms carried out production and the final consumer accessed the produce, with the produce itself traversing through several channels and players. The degree of organization and governance of the value chain while improving continues to be a challenge. The existence of several middlemen, absence of information about other links in the chain and inability to invest in improving the performance in almost every part of the chain led to inefficiencies and lower incomes especially in the lower end of the chain. The recent initiatives have focused on improving technology of production, processing, quality control, creating processing facilities that add value to raw produce and aggregation near farms to ensure higher share of consumer prices for the producer. Creation of technology based commodity exchanges for price discovery, investments in marketing infrastructure such as warehouses, cold stores, cold chain logistics, innovations in trade finance products such as collateralized warehouse receipts and institutional interventions such as farmer collectives are changing the quality of value chains in agriculture. Agricultural value chains are difficult to organize and stabilize in countries like India with a large number of small farm holdings. The production and aggregation parts of value chains have to be made efficient in order for the small farms to realize higher returns. Building the confidence of farmers to move away from subsistence farming to market oriented farming, and increasing their awareness on application of improved inputs and adoption of higher technology of cultivation are important interventions in creating a sustainable value chain. Aggregation of several small farms pose challenges in terms of highly dispersed collection of produce, transport arrangements, and quality assurance mechanisms at every level. These not only entail costs but also time outlays in the aggregation process. The production effort has to be organized in clusters so that the distances and time are kept within manageable levels. Shri Manoj Rawat, Head, Agribusiness, RBL Bank , Mumbai highlighted the need, means and the importance to the Krishi Jagran Team.
Why do we need a Agri Value Chain?
The first on foremost thought that comes to my mind is to “Make the country free of hunger”.
In simple terms what Agri Value Chain means Capturing the value created along the Agriculture chain from pre sowing to food harvest or in other words capturing value created from “Farm to Fork”.
The Agri Value Chain is needed to-
Unfortunately India remains the Chronic Hunger Capital of World despite the fact that our country
What a paradoxical situation?
We grow more. We waste even more.
We waste more food than that produced by Developed and Rich nations.
India is among the biggest food wasters in the world, reportedly wasting an estimated Rs. 900,000 million worth of fruits, vegetables and grains every year and year on year.
The irony is despite such a wasteful situation, India accounts for the highest estimated number of hunger stricken people, about one in every four such people in the world. On Global Hunger Index (GHI), India ranks 63rd, out of the 78 hungriest countries, significantly worse than neighbouring Sri Lanka (43rd), Nepal (49th), Pakistan (57th), and Bangladesh (58th).
India lacks efficient markets fails to facilitate the “Producer find the best Buyer and Buyer identify the best supplier”.
While there is no dearth of market places, there lack efficient market linkages
Few challenges which the Agri-markets face
To develop efficient Agri Value Chains, there is crying need for Reforms, better market information and use of Information Technology.
It is important understand Agri Supply Chains must remain as “work-in-progress” and continuously evolve
To conclude “Agri value chains” should keep tab with developments in Agriculture segment, policies, global market and consumer needs with the following being centre
The situation in India demands to “needle” the various factors into a single thread that would provide end-to-end solutions for efficient market and better price discovery for producer, processor and consumer and develop efficient “Agri Value Chains”, which may ultimately create a “hunger free & properly nourished” India.
No matter whatever development happens in technologies, mankind will still need Food and Water to “survive” unless we are able to develop smartphone that can be “munched and chewed” when you feel hungry and can also be used for communication and messaging.