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The Food Supply Chain In IndiaUntapped Comparative Advantage

N. ViswanadhamIndian Institute of Science

October 5,2013Workshop at IIT Kharagpur on

Sustainable Food Security through Technological Interventions for Production, Processing and Logistics 

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A Revolution in the Making

• Break through Innovations are possible with booming employment opportunities.

• What is needed is out of the box thinking in terms of product offerings made to various customer segments with appropriate business models with Affordability, Availability and Awareness in mind

.N.Viswanadham

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The India Advantage

In India, 52% of land is cultivable & World average is 11% All 15 major climates of the World are in India

– Snow bound Himalayas to hot humid southern peninsula, – Thar desert to heavy rain areas

Has 20 agro-climatic regions & 46 out of 60 in soil types Sunshine hours and day length ideally suited for year round

crop cultivation. Mega centre for biodiversity in plants, animals, insects,

microorganism and accounts for 17% animal, 12% plants and 10% fish genetic resources of the globe.

Live stock sector: India has 16% of cattle, 57% of buffalos, 17% of goats and 5 % of sheep population of the world.

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The Plough-Plate Food Supply Chain

• The supply chain involves farmers, seed producers, fertilizer factories, financial institutions, millers, government, warehouses, fair price shops, retail shops, railways, truck transport companies, etc.

• The relationship among the actors is adhoc and not planned leading to inefficiencies

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Benchmarking Food ChainInstitutions

Resources &

Managem

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Supply chains

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ervi

ces

and

mec

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Resources

Resources Management

Supply ChainProduct Offering

Logistics

Economic Policies

Information Technology

Trade Tariffs

FOOD SUPPLY CHAIN

No Cold Chain

No Supply Chain Visibility

Packaging Duties High Protectionist

Too many intermediariesFew Processed Products/Labs

Abundant

Inefficient and Fragmented

Planning

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N.Viswanadham

State of Indian Food Sector

Consequences1.Surplus food wasted away2.Low incomes to farmers 3.Inefficient supply chain4.Not meeting the young consumer preferences (processed hygienic food)

Opportunities 1.Cold chain infrastructure builders 2.Processed food manufacturers3.Food packaging & logistics providers4.Food retailers and Exporters 5.IT and data analysts6.Research Institutions

Strengths1.Vast natural resources (cultivable land, water, seasons)2.Established farming system3.Growing economy4.Supporting government policies (FDI, APEDA, subsidies)5. Vital outsourcing hub

Weaknesses 1.Small scale conventional farming 2.Primitive post-harvest methods 3.No channel master & many farmers to consumers intermediaries

4. Hardly any Food processing industry 5. Inadequate storage & transport (logistic )infrastructure

Potential to become a

leading food supplier for th

e

whole world

FOOD SUPPLY CHAIN

ECOSYSTEM

Food Parks, APEDA, Freight Corridors

Sensor networks & supply chain

visibility

Cold Chain Logistics

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Sourcing Hubs, Food Courts, Clusters

HR management Dealing with Kirana shops, FinancialsWater, Power , seeds

Infrastructure: Canals, Roads,

Research: University, Seeds, Testing, Dev, Labs

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CE

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Quality Control &Environmental Issues

APMC, Min price, Essential Commodities, PDS,VAT

INSTITUTIONS

Social (Kirana shops), Financial & Trade issues

FOOD SUPPLY CHAINS

Retail ChainsMandis, Restaurants

DistributionPackaging

Food Manufacturing

SuppliersFarmers, Fisheries,

Meat, Dairy

LICENCES & PERMITS INDUSTRIAL DISPUTE ACT SHOP & ESTABLISHMENT ACT COSUMER PROTECTION ACT WEIGHT & MEASUREMENT ACT PACKAGING ACT PREVENTION OF FOOD ADULTRATION

ACT

PREVENTION OF BLOCK MARKETING ACT ANTI HOARDING & PROFEELING ACT MONEY LENDING ACT PRODEND FUND ACT MINIMUM WAGES ACT ESI ACT GRATUITY ACT BONUS ACT

INEFFICIENT LABOURS

PRESENT CONDITION OF TRADERS

INSPECTOR RAJ

POLITICIAL INTERFERANCE

ANTI SOCAL ELEMENTS

WATER TAX

POWER PROBLEM

HIGH BANK CHARGES

SALES TAX

OCTROI

SERVICE TAX

WELTH TAX

PROFESSIONAL TAX

INCOME TAX

ENTRY TAX

VAT

STAMP DUTY

POOR MARKET CONDITION

PURCHASE TAX

ESSENTIAL COMMODITIES ACT

CENTRALEXCISE

Presented By Mr. B.C.Bhartia,Nagpur.

FDI in Retail Trade

Fringe Benefit Tax

New Naka Complex

Cash Transaction Tax&

Quarterly ‘C’ Form

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What Is Food Security?

The World Food Summit of 1996 defined food security as existing “when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life”.

Thus food security implies both physical and economic access to food that meets their dietary needs, nutritional requirements and food preferences.

Nutritious food providers have three functions: Making it Available at Affordable prices and creating Awareness to the consumers

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Food security: India ranks lower than Rwanda

According to the International Food Policy Research Institute's Global Hunger Index, 2011, India ranks 67 of the 81 countries of the world with the worst food security status.

The GHI is composed of three equally weighted indicators - the proportion of the population that is undernourished, the proportion of children who are underweight and under-five child mortality.

N.Viswanadham

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India needs to Usher the Agri-Service Revolution

A strategic vision for the Agri-service sectorStreamline and upgrade the agri-service

chains using modern technologies: Demand driven agriculture, Processing industry, Visibility

Initiate education, research and entrepreneurial programs in Agri-Service sector innovation

Plan and Build integrated Food -service systems in rural and urban areas

N.Viswanadham

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Specific Five things India Needs

Post Harvest ResearchFood Manufacturing with Added Vitamins

And MineralsDistribute Nutritious Food not GrainsAttention to supply chain and logistics and

minimize wastage Regulations by the State and Centre

Governments : APMC act, Minimum support price act, etc

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141106N.Viswanadham

New to Market Innovation

Food Product Market Estimation

Estimate your market right How many people will buy orange juice packets if it is as cheap as a coffee or tea on a road side stall and costs only Rs 5

Look at the reduction in the disease burden

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onsumers

Vocational Training

Processed Food Products

Meat & Diary Products

PDS Mid Day Meals

Households

Hawkers

Kitchen

Kitchen

Distribution Center

Distribution Center

Distribution Center

Food Security Solution: To Serve 100M Urban Poor

IT Backbone on Cloud

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The IIT Kharagpur Initiative

This initiative fills in the much needed research efforts in the supply chain, logistics and food security areas

The involvement of the IIT faculty and research students would make a much needed contribution to the food security in India and the world.

N.Viswanadham