#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
Stores produce from harvest till needed for the consumption
Ensures continuous flow of goods in the markets
Prevents quality of perishable and semi-perishable items from deterioration
Wastage & rotting of food grains
Helps in stabilization of prices
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
Price volatility
Poor storage infra
Low private investments
Inefficient capacity utilization
Finance, Education & Training
Lack of scientific methods of storage
Insufficient funding for FCI, CWC etc.
Lack of good quality storage conditions
Regional imbalances in storage capacities
Poor governance - High levels of corruption in govt bodies like FCI
Steps Taken by Govt
Geo-tagging of warehouses
Negotiable Warehouse Receipt System
Storage & Cold Chain Facilities under PMKSY
Agri infra Fund for post-harvest infra management
Village Storage Scheme (Budget 2020) to be run by SHGs
Decentralized procurement scheme - to avoid transit loss
Amendment of ECA to relax stock limits & encourage private participation
Transport
Significance
Enables greater agriculture exports
Maintenance of agriculture value chain
Enables production to meet consumption
Minimizes the unit cost of production, storage & transportation
Provides employment opportunities in rural areas and raises income level
Issues
Poor road & rail connectivity
Lack of dedicated freight corridors
Lack of all-weather roads in rural areas
Limited regional connectivity especially in NE India
Lack of good quality transport vehicles - Leads to spoilage of perishable items
Steps Taken
Kisan Rath Mobile App
PMGSY for better road infra
Transport & Marketing Assistance Scheme
Kisan Rails - First ever multi-commodity trains
Krishi Udan Scheme - Transport of agriculture commodities by air
Marketing
Primarily includes buying and selling of products
Major functions include:
Exchange Functions: Buying, Selling, Storage,
Physical Functions: Transportation, Processing, Standardization
Facilitating Functions: Financing, Risk Bearing, Market Intelligence.
Significance
Protection from price fluctuation
Ensure better quality of products for end consumers
Better marketing lead to better price realization for farmers
Efficient marketing mechanism will reduce need for MSP and thus lower government’s subsidy burden
Issues
Cartelization
Higher user fees
Poor marketing infra
Fragmented supply chain
Inadequate credit facilities
Presence of large no. of middlemen
Malpractices in unregulated markets
Presence of APMC mandis and their monopoly
Lack of grading and standardization of products
Steps Taken
E-governance portal AGMARKNET
eNAM portal for electronic trading of wholesale agri produce
Market Intelligence and Early Warning System(MIEWS) Portal
Kisan Credit Card scheme: to provide term loans for agricultural needs.
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
Reforms in FCI
Scientific & technical training
Better storage capacity utilization
Greater investment by private sector
Upgradation of bulk-grain handling infra
Transportation
Dedicated freight corridors for agriculture products
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
Encouraging PPP
Promotion of exports
Reforms of present agri legislations
Promote cluster-based organizations
Use of technology for better marketing
Direct Farmgate selling model should be promoted
Encourage private players in agri marketing for efficiency
Promote AgTech startups for better price discovery mechanism
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