From Meghalaya to Jharkhand, how India is ensuring agri supply chains are not disrupted
Jan 14 2022
In a world living with Covid-19, it is clear that supply chains and logistics should be simple and easy to manage. And that’s what several Indian states are doing.
When India initiated the world’s largest lockdown in March, it was difficult to predict its impact on essential supply chains and logistics. These supply chains form the backbone of the agriculture economy, which 58 per cent of Indians depend on for their livelihoods. In many parts of India, April and May are primary harvest months for winter crops and many summer fruits and vegetables. Uncertainty gripped both farmers and consumers in the immediate aftermath of the lockdown. But two months on, we can see an emerging ‘new normal’ in agri-supply chains.
In a world living with Covid-19, it is clear that supply chains and logistics should be simple and easy to manage. The hygiene and sanitation standards along supply chains should be such that consumers can be confident of their safety, and health risks for all supply chain actors must be minimised. These imperatives present an opportunity to improve agri marketing, move from fragmented value chains, especially for perishables, to shorter and more integrated ones. It is also a chance to revamp supply chain logistics and management to incorporate critical hygiene and safety measures.
Some models that worked in India feature shorter farm-to-fork supply chains that connect farmers to urban, semi-urban and institutional markets. This has helped reduce waste and prevent distress sales by farmers. It has also ensured an adequate supply of fresh produce through this unprecedented emergency.
Here are some early lessons that could be applied in other constrained environments.
Shorter supply chains using digital platforms are efficient
When the lockdown was imposed, farmers worried that their fresh fruit and vegetables would rot while city-based consumers were concerned that they wouldn’t get regular supplies. But both the government and the private sector, including ag-tech companies, rose to the occasion.
Farmers were linked to consumers through revamped value chains that followed the shortest possible route. Field-level packaging and home deliveries started incorporating Covid-19 compliant practices. Same-day packaging and supply ensure freshness without extra effort. In many parts of Uttarakhand, Maharashtra and Haryana, farmers supplied fresh vegetables direct from their fields to consumers in Mumbai, Dehradun, Gurgaon and other smaller towns. Consumers are more confident, because they have some idea about the source of their produce.
The central government recently launched Kisan Rath app to connect farmers and traders to more than 500,000 trucks and 20,000 tractors through transport aggregators.
Several programmes supported by the International Fund for Agricultural Development (IFAD, the UN’s rural development agency) have embraced new and existing digital platforms to link farmers directly with consumers. In Jharkhand, for example, farmers are selling vegetables and fruits through the Aajeevika Farm Fresh app, developed by the Jharkhand State Livelihood Promotion Society. In Maharashtra, self-help groups (SHGs) are selling fresh produce through WhatsApp groups.
Institutional markets as source of sustainable income
Institutional markets play an essential role in aggregating produce at the local level and ensuring structured demand, especially for smallholder farmers. For instance, in Madhya Pradesh, women SHGs and federations are active intermediaries in aggregating and supplying millet (kodo/ kutki) products, vegetables and spices to primary health centres, guesthouses, hotels and government hostels.
Livelihood collectives in Uttarakhand have been supplying poultry to the Central Armed Police Forces in the state by participating in their tender process. In the past, only a few such cases achieved scale, but today there is an opportunity and a need to ensure that they become viable long-term solutions. This could be done by ensuring that institutions such as hospitals, canteens, prisons and offices are directly linked to farmers’ groups. Aggregators, local ag-tech companies and private sector partners could be involved to ensure seamless on-time end-to-end supply of desired quality and quantity.
Mini mandis, atomised warehouses, and contract farming
Wholesale markets, or mandis, have emerged as major risk spots during the coronavirus pandemic. They are often crowded because farmers have few alternatives and lack information. To address this challenge, alternative local models are emerging all over India.
These include mini/online mandis, farmer-consumer direct marketing outlets, and using different sites to auction produce. In Jhalawar, Rajasthan, for instance, an agri start-up opened alternative collection centres to help farmers safely sell their crops to institutional off-takers. It redrafted standard operating procedures to comply with Covid-19 precautionary norms, deploying staff, testing and handling equipment and conducting quality checks at farm gates. Meghalaya also tried a risk-proofed alternative delivery system that could serve as a sustainable supply chain in the long term. It is a three-tier supply chain network that includes producers (farmers), government agencies and consumers.
The Meghalaya government is mapping demand, facilitating logistics, maintaining a database and undertaking monitoring and quality assurance. Contract farming is also a tried and tested way to reduce the burden on farmers to use mandis or other market places to sell produce. While the Centre has been promoting this extensively, farmers and the private sector need more confidence in the practice. Covid-19 may have well provided that impetus.
The central government’s recent economic package of Rs 21 lakh crore for a self-reliant India includes a stimulus of around Rs 500 crore for perishable commodities, through the existing Operation Greens, which, incidentally, embraces some of the models outlined above while aiming to improve transport and storage (including cold storage), reduce waste, and provide better price realisation to farmers.
India also plans to invest Rs 1.5 lakh crore in farm-gate infrastructure, among other agriculture marketing reforms. At the heart of these models and the success of the new schemes of the government lies the need for strong farmers’ organisations. The future of agriculture transformation in India, and perhaps the world, will depend significantly on these building blocks. Covid-19 has given us the opportunity to prioritise it. •