supply chain

1. “Supply-chain: Linking
Farmers to Markets”
17th January 2020
Interactive Session with:
Capt. Pawanexh Kohli
Chief Executive Officer, NCCD cum Chief Advisor, DAC&FW
Professor, Post-harvest Logistics, Univ. of Birmingham
Autonomous PPP think-tank on Cold-chain & Agri-
logistics, facilitated by the Ministry of Agriculture
& Farmers Welfare, to guide policy interventions.

2. Supply chain
integrates the
multiple actors,
who link into a
market-led
marketing
system. Each
actor has a value
chain.
Value chain
relates to optimal
operations and
processes to build
efficiency and add
value to a
business unit -
activities internal
to each actor
Supply chain integrates Value chains
2

3. Horticulture (2018-19)
(million
tonnes)
Livestock (2017-18) (million tonnes)
Potato 53.03 Fish 12.60
Onion 23.49 Inland Fish 8.91
Tomato 19.40 Marine Fish 3.69
Mango 20.80 Meat & Poultry 7.02
Citrus 13.20 Egg 95.2 billion pcs
Banana 31.75
Milk 176.5
Brinjal 12.66
Butter & Ghee 5.4
Honey, aromatics,
flowers, cashew, etc.
3.80 Field Crops (2018-19) (million tonnes)
Spices 9.21 Fibre crops 7.52
Fruits 98.58 Wheat & Rice 216.83
Vegetables 185.88 Pulses 23.22
Total Horticulture 313.85 Sugar cane 400.30
Horticulture Trends
28.6
43.0
50.9
65.6
74.9
81.3
91.3 92.9
98.6
58.5
88.6
101.2
128.4
134.1
146.6
162.2 162.9
169.1
178.2
185.9
0
20
40
60
80
100
120
140
160
180
200
Million
Metric Tons
Horticulture Production
Fruits Vegetables Plantation Crops Others
x 3.2
x 3.4
Others: includes Spices, Loose Flowers, Nuts, Mushroom,
Aromatic/medicinal and Honey .
Source: Ministry of Agriculture
Within Horticulture, perishable commodities trends higher &
drives growing demand for perishable handling.
3

4. Making food available
4

5. Producing more is not enough
1971-72 to 1981-
82
1982-83 to 1993-
94
1995-96 to 2004-
05
2005-06 to 2011-
12
All Commodity 10.2 7.9 5.9 6.6
Primary Food 8.5 9.2 5.9 9.9
F & V 9.0 10.6 7.5 9.2
Milk 7.1 9.0 5.7 10.1
Eggs, Meat, Fish 11.0 9.4 6.4 11.8
10.2
7.9
5.9
6.6
8.5
9.2
5.9
9.9
5.5
6.5
7.5
8.5
9.5
10.5
11.5
Inflation
%
Trends - Annual Average WPI Inflation
(from 1970 to 2012)
Continual demand for food distribution and
cold chain is foreseen over coming decade.
Source: RBI, Office of Economic Adviser, MoCI, Govt of India
28.6
43.0
81.0
58.5
88.6
155.0
Production
Fruits
Vegetables
Plantation Crops
Others
WPI Inflation trends (40 years):
• Despite producers showing robust
response by increasing supply, yet
inflationary pressure exists.
• Food, is now the prime driver with
perishables contributing highest.
• On surface, indicates demand
continues to outstrip supply.
• Actually, indicates a lack of
efficient supply systems which
continues to feed inflation in food
items.
Correlation in decadal trend of inflation rate (WPI and
food items) with production of high value foods.
Food inflation fell below WPI, now leads WPI
5

6. The Focus on PHM
All Production is at risk unless market integration - connectivity and links are developed.
PHM and Cold-chain is a thrust area – optimal monetization the primary concern.

7. 7
Logistical Capacities required
Cold-chain needs to integrate capacities basis product and produce type being handled. One size will not fit all,
but multiple synergies exist. Cold-chain is the harbinger of the Income Revolution - doubling farmers income.
Type of Infrastructure
Infrastructure
Requirement (A)
Infrastructure
Created (B)
All India Gap
(A-B)
% share of
Shortfall
Pack-house 70,080 nos. 249 nos. 69,831 nos. 99.6%
Reefer Vehicles 61,826 nos. 9,000 nos. 52,826 nos. 85%
Cold Storage (Bulk) 341,64,411 MT
318,23,700 MT 32,76,962 MT 10%
Cold Storage (Hub) 9,36,251 MT
Ripening Chamber 9,131 nos. 812 nos. 8,319 nos. 91%
-AICIC 2015 Study by NCCD
Currently majority of infrastructure is in form of bulk produce cold
stores. A healthy 75% capacity utilisation is seen.
Produce from one State finds capacity in neighbouring States.
The gap is larger in case of pre-cooling at pack-houses, transport
connectivity and ripening chambers.
Mission is to develop integrated & synergistic infrastructure, so that
farmers and consumers will gain from organized supply chain.

8. Integrated ?!?
• 15 MT per day
• Supplies cold & normal chain
Modern Pack
House
• 10-15 MT loads
• 2-3 days TAT
Long Haul
Transport
• 1000 MT capacity
• 10% or 100 MT for Horti
Distribution Hub
(Cold store)
• 2-4 MT loads
• Daily Delivery
Retail
distribution
• Temperature controlled outlets
• Vending carts, cabinets
Retail /
Merchandising
• 1000 MT capacity
• 10% or 100 MT for Horti
At Rs. 10,000 per ton = 100 lakhs
• 10-15 MT loads
• 2-3 days TAT
20 units at Rs. 30 lakh each =
600 lakhs
• 15 MT per day
• Supplies cold & normal chain
7 units at Rs. 90 lakh each =
630 lakhs
Component Units Cost % of cost
Pack-houses 7 630 47%
Reefers units 20 600 45%
Cold Store (MT) 1000 100 8%
TOTAL COST 1330 lakhs

9. Gainful Productivity
“All Food must be handled with one end-use in aim – for Consumption”
Redefine productivity to include market access and market reach.
Supply chain a prime objective – to expand reach, open markets

10. 1st step to organise the supply chain
GrAMs- New Market Architecture
Suppliers Market - Hub Small resellers Buyers
FORWARD AGGREGATION MODEL
10

11. Relook at India’s Market Architecture
 Mandatory to transact at regulated yard.
 Each market (APMC) designated its zone,
gets captive footfall.
 Sets up a chain of wholesale transactions.
Wholesale markets
(6,615 APMC yards)
Regulated auction
Rural Periodic Markets
22,800 Unorganised retail
Market yards,
sub-market
yards
Informal retail,
small lot sales
Farmers / Agents/ Intermediary
New Market
Architecture
Market Density:
• Concept of a market every 80 sq.kms (5 km radius) based on assembling
people.
• Market density evaluated on travel time, distanced about 1 to 2 hours from
farms.
• Source markets as platforms need not only execute a local exchange but also
facilitate transactions that connect with demand at markets farther afield.
• Also allow existing warehouse or cold store to function as markets.
Export Markets
Terminal
wholesale
Primary / Secondary
wholesale
Gramin Agri-Markets
Logistics hubs to pool & prepare into viable
unit loads for wholesale and local retail
Market
Intel
Aggregate - Dispatch - Retail - Wholesale
11

12. Export
Gateway
Post Harvest supply
Pack-house is the Nerve Centre
Food
Processing
Preserves
Juices
Mixes
Jams
Jellies
IQF
5 ton / day
Non-Food
Compost
Farm Feed
Bio-gas
Dyes
<1 ton / day
25 ton / day
Existing
Multi-layered chain
Local Mandi / Consumers
Cold Store for Market access
15 ton / day Ready to retail produce - cold-chain
Reefer
Retail
Distant Consumer
Ripening Unit
Harvest Catchment
50 ton / day harvest
Cold-chain
Modern Pack-house
Each end-point is economically gainful end-use
12

13. Natural Price Dispersion
Agricultural Fresh Produce Marketing
Consumption
Break-bulk
& Retail
Produce
Wholesale
Long haul
Transport
Bulking & Pre-
conditioning
Agricultural
Production
Farm
Inputs
Agricultural Processed Product
Marketing
Produce as
feedstock
Warehousing Processing Transport
Product
Distribution
Pawanexh
Kohli
Natural price dispersion = Cost of production (1) +
cost of logistics (2) + risk (3) + marketing margins (4)
13

15. Supply chain has a Digitalised Future
15
• BMS, PMS, Spares, Upkeep,
telemeasures, People Safety
Assets
• Smart Picking (FEFO), Quality,
shrinkage, forecasts, packaging
Inventory
• Climate control, water, insulation,
machines, utilities, alerts
Energy
• HACCP, tainting, contamination,
EOP, labelling, compliance
Food
Safety
• Traceability, recalls, feedback,
tracking
Traceability
• Reuse, dispose, disease, lower
ecological footprint
Waste
• Documentation, Regulations,
Compliance, CSR
Trade
Processes
• Route planning, FMS, Distribution,
remote management
Transport
Service
Life
Cycle
Energy efficiency
Operational efficiency
Internet of Things
Robotics
Monitoring
Safety

16. Integrated Cold-chain Availability
Platform (ICAP)
See full concept in NCCD’s AICIC Study
16

17. Impact of a proper Supply-chain
In the region, 16 pack-houses and pre-coolers have been set-up
over 40 months.
About 1600 reefer vehicles deployed in 2019 and more markets
brought under reach, with access opened to more consumers.
Abohar area farmers have since connected with London, Dubai, and
Bangladesh.
Aggregators have reported 4 fold sales with earnings multiplied.
Farm productivity has been rejuvenated and increasing.
17

18. • By consolidating demand, simplifying supply.
• By extending market footprint for farmers.
• By infusing ownership in the total value chain.
• By creating brands versus commodity selling.
• By diverting would be loss into processing.
• By laying onus on better handling practices.
• By adding to existing private participation.
• By perforce infusing capital into rural India.
• By linking producer owners to consumer buyers.
Organised Supply-chain:
Advantages for Value-gain
By consolidating demand, simplifies supply.
By extending market cachement of farmers.
By infusing ownership in the total supply chain.
By diverting would be loss into processing.
By creating brands versus commodity selling.
By laying onus on better handling practices.
By promoting produce owner participation.
By adding infrastructure capital into rural India.
By linking producer owners to consumer buyers.

19. राष्ट्र ीय कोल्ड-चेन विकास क
ें द्र
Defining - Rationalising - Harmonising
Making Cold-chains Smarter
www.NCCD.gov.in
Contact-NCCD@gov.in
www.facebook.com/NCCD.India