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Configurations of Agriculture Supply Chain


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agriculture supply chain Configurations and cost related to

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Configurations of Agriculture Supply Chain

  1. 1. Major players in Agriculture Supply Chain 1 • Farmers 2 • Traders 3 • Commission agents 4 • Wholesalers 5 • Retailers 6 • Consumers BITS Pilani, Pilani Campus
  2. 2. Agriculture Supply Chain Configurations Agriculture Supply Chain Cooperative supply chain model Collaborative supply chain model Contract farming BITS Pilani, Pilani Campus
  3. 3. 1. Cooperative supply chain model BITS Pilani, Pilani Campus
  4. 4. 1. Cooperative supply chain model Example: In some parts of India milk is collected and sold by cooperatives. The cooperative movement for milk was initiated by the National Dairy Development Board (NDDB) (Chakravarty, 2000). Outcomes of milk cooperatives: • The efficiency, transparency and fairness of the system have improved ( • The government’s attitude towards the cooperative system is positive, especially after the success of the milk sector. BITS Pilani, Pilani Campus
  5. 5. 2. Collaborative supply chain model Example: Consumer durables and FMCG supply Chain BITS Pilani, Pilani Campus
  6. 6. 3. Contract farming commitment from The purchaser commitment from The farmers BITS Pilani, Pilani Campus
  7. 7. 3. Contract farming Advantages: • This is helpful for farmers, since they get access to the inputs and the market at a fair price. • Also, the processor gets an assured supply of raw material. BITS Pilani, Pilani Campus
  8. 8. Total Supply Chain Cost BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
  9. 9. Estimated cost escalation in the Indian grain chain Figure clearly reflects the end consumer on average pays more than three times the farm gate price for grain. BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
  10. 10. Intermediaries in the grain supply chain and their margins and value additions BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
  11. 11. Reasons for the existence of intermediaries • Age-old historical loyalty of farmers to their agents, because these agents provide debt to the farmer; • Local understanding and relationships with transporters • Lack of guidelines and rules in the development • Organised cartels between commission agents, wholesalers and transporters; • Lack of scale in terms of what each farmer produces, sheer numbers of small farmers drive down bargaining power • Lack of effort in development from front-end players (retailers) BITS Pilani, Pilani Campus