#59: GS3 | Storage, Marketing & Transport of agri produce, related issues & constraints

GS3 Free notes for all aspirants to learn from!

This blog post is a guest contribution by my brother @Conquerias24 who’s a Post Graduate in Economics from Madras School of Economics.

Storage & Warehousing

Significance

1. Stores produce from harvest till needed for the consumption

2. Ensures continuous flow of goods in the markets

3. Prevents quality of perishable and semi-perishable items from deterioration

4. Wastage & rotting of food grains

5. Helps in stabilization of prices

6. Provides income and employment

Warehouses: They are scientifically constructed storage structures for protection of stored items.

Warehousing in India:

• Central Warehousing Corporation: Provides safe & reliable storage facilities for more than 120 items

• State Warehousing Corporation: Focus of ops are the districts

• Food Corporation of India: Has largest storage facilities in India with capacity of more than 26 million ton.

Issues

1. Price volatility

2. Poor storage infra

3. Low private investments

4. Inefficient capacity utilization

5. Finance, Education & Training

6. Lack of scientific methods of storage

7. Insufficient funding for FCI, CWC etc.

8. Lack of good quality storage conditions

9. Regional imbalances in storage capacities

10. Poor governance - High levels of corruption in govt bodies like FCI

Steps Taken by Govt

1. Geo-tagging of warehouses

2. Negotiable Warehouse Receipt System

3. Storage & Cold Chain Facilities under PMKSY

4. Agri infra Fund for post-harvest infra management

5. Village Storage Scheme (Budget 2020) to be run by SHGs

6. Decentralized procurement scheme - to avoid transit loss

7. Amendment of ECA to relax stock limits & encourage private participation

Significance

1. Enables greater agriculture exports

2. Maintenance of agriculture value chain

3. Enables production to meet consumption

4. Minimizes the unit cost of production, storage & transportation

5. Provides employment opportunities in rural areas and raises income level

Issues

1. Poor road & rail connectivity

2. Lack of dedicated freight corridors

3. Lack of all-weather roads in rural areas

4. Limited regional connectivity especially in NE India

5. Lack of good quality transport vehicles - Leads to spoilage of perishable items

Steps Taken

1. Kisan Rath Mobile App

2. PMGSY for better road infra

3. Transport & Marketing Assistance Scheme

4. Kisan Rails - First ever multi-commodity trains

5. Krishi Udan Scheme - Transport of agriculture commodities by air

• Primarily includes buying and selling of products

• Major functions include:

  1. Exchange Functions: Buying, Selling, Storage,

  2. Physical Functions: Transportation, Processing, Standardization

  3. Facilitating Functions: Financing, Risk Bearing, Market Intelligence.

Significance

1. Protection from price fluctuation

2. Ensure better quality of products for end consumers

3. Better marketing lead to better price realization for farmers

4. Efficient marketing mechanism will reduce need for MSP and thus lower government’s subsidy burden

Issues

1. Cartelization

2. Higher user fees

3. Poor marketing infra

4. Fragmented supply chain

5. Inadequate credit facilities

6. Presence of large no. of middlemen

7. Malpractices in unregulated markets

8. Presence of APMC mandis and their monopoly

9. Lack of grading and standardization of products

Steps Taken

1. E-governance portal AGMARKNET 

2. eNAM portal for electronic trading of  wholesale agri produce

3. Market Intelligence and Early Warning System(MIEWS) Portal

4. Kisan Credit Card scheme: to provide term loans for agricultural needs.

5. Formation and Promotion of FPOs(Farmer Producer Organizations): FPOs to be promoted under ODOP cluster - Promotes specialization and better processing, marketing, branding & export by FPOs.

Way Forward

Storage

1. Reforms in FCI

2. Scientific & technical training

3. Better storage capacity utilization

4. Greater investment by private sector

5. Upgradation of bulk-grain handling infra

Transportation

1. Dedicated freight corridors for agriculture products

2. Shift from Road to Rail networks for quicker transport

   • 1.9% of the perishable fruits and vegetables are transported through rail, while 97.4% of the produce is transported through roads

Marketing

1. Encouraging PPP

2. Promotion of exports

3. Reforms of present agri legislations

4. Promote cluster-based organizations

5. Use of technology for better marketing

6. Direct Farmgate selling model should be promoted

7. Encourage private players in agri marketing for efficiency

8. Promote AgTech startups for better price discovery mechanism

   

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