Elaborate the scope and significance of supply chain management of agricultural commodities in India.
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.
Scope of Agricultural Supply Chain Management
- Infrastructure: Encompasses rural warehouses and cold chains, currently expanding via ₹59,943 crore sanctioned under the Agriculture Infrastructure Fund (AIF).
- Digital Markets: Covers transparent price discovery platforms like e-NAM (now spanning 247 commodities) and ONDC, decentralizing market access for farmers.
- Logistics: Involves farm-to-factory transport networks, supported by the National Logistics Policy aiming to cut overall logistics costs to 8% of GDP.
- Agri-Tech Traceability: Includes modernization using IoT sensors for temperature-controlled transit and blockchain for end-to-end export traceability.
- 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
- Minimizing Wastage: Efficient cold chains directly curb the steep 6-15% post-harvest loss in perishable fruits and vegetables (NABCONS).
- Income Augmentation: Direct market linkages via Farmer Producer Organizations eliminate intermediaries, securing a higher share of the consumer rupee for farmers.
- Food Security: A seamless SCM guarantees the uninterrupted flow of essential commodities through the PDS network to vulnerable households.
- Export Competitiveness: Improved multi-modal logistics (reflecting India's 38th rank in the World Bank LPI) facilitates record agricultural exports touching $51.86 billion.
- 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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