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Elaborate the scope and significance of supply chain management of agricultural commodities in India.

GS 3
Economy
2025
10 Marks

India loses $18.5 billion annually to post-harvest inefficiencies (FAO 2024), making robust agricultural Supply Chain Management (SCM) critically important for the agrarian economy.

Agricultural Food Supply Chain Stages

Agricultural Food Supply Chain Stages

Scope of Agricultural Supply Chain Management

  1. Infrastructure: Encompasses rural warehouses and cold chains, currently expanding via ₹59,943 crore sanctioned under the Agriculture Infrastructure Fund (AIF).
  2. Digital Markets: Covers transparent price discovery platforms like e-NAM (now spanning 247 commodities) and ONDC, decentralizing market access for farmers.
  3. Logistics: Involves farm-to-factory transport networks, supported by the National Logistics Policy aiming to cut overall logistics costs to 8% of GDP.
  4. Agri-Tech Traceability: Includes modernization using IoT sensors for temperature-controlled transit and blockchain for end-to-end export traceability.
  5. Post-Harvest Finance: Extends to electronic Negotiable Warehouse Receipts (e-NWRs), providing institutional liquidity against stored produce to prevent farmer distress sales.

Significance of Agricultural Supply Chain Management

  1. Minimizing Wastage: Efficient cold chains directly curb the steep 6-15% post-harvest loss in perishable fruits and vegetables (NABCONS).
  2. Income Augmentation: Direct market linkages via Farmer Producer Organizations eliminate intermediaries, securing a higher share of the consumer rupee for farmers.
  3. Food Security: A seamless SCM guarantees the uninterrupted flow of essential commodities through the PDS network to vulnerable households.
  4. Export Competitiveness: Improved multi-modal logistics (reflecting India's 38th rank in the World Bank LPI) facilitates record agricultural exports touching $51.86 billion.
  5. Sustainability: Integrating solar-powered storage via PM-KUSUM builds the climate-resilient "green supply chain" recently recommended by NITI Aayog.

A modernized, tech-driven SCM will transform Indian agriculture from a subsistence activity into a globally competitive enterprise, securing rural prosperity and national food security.

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