#Integrated Agriculture Supply Chain Management # By SN Panigrahi

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Green Fields Institute of Agriculture

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SN Panigrahi is a Versatile Practitioner, Strategist, Energetic Coach, Learning Enabler & Public Speaker.
He is an International-Corporate Trainer, Mentor & Author
He has diverse experience and expertise in Project Management, Contract
Management, Supply Chain Management, Procurement, Strategic
Sourcing, Global Sourcing, Logistics, Exports & Imports, Indirect Taxes –
GST etc.
He had done more than 150 Workshops on above
Published more than 500 Articles; More than 60 Youtube Presentations
He is an Engineer + MBA +PGD ISO 9000 / TQM with around 29 Yrs of
Experience
He is a certified PMP® from PMI (USA) and become PMI India
Champion
Also a Certified Lean Six Sigma Green Belt from Exemplar Global
Trained in COD for 31/2 Yrs. on Strategy & Leadership
GST Certified – MSME – Tech. Dev. Centre (Govt of India)
ZED Consultant – Certified by QCI – MSME (Govt of India)
Member Board of Studies, IIMM
Co-Chairman, Indirect Tax Committee, FTAPCCI
Empanelled Faculty in NI MSME
He has shared his domain expertise in various forums as a speaker & presented a number of papers in various national and
international public forums and received a number of awards for his writings and contribution to business thoughts.
SN Panigrahi
9652571117
snpanigrahi1963@gmail.com
Hyderabad

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Indian Agriculture : Introduction
Drivers of Agri-supply chain
Contracts management in supply chain & Contract Management
Understanding of Agri supply chain
Case studies
Third Party Logistics and FPL in agri-supply chain
Agri-Logistics:Inventory, Facilities, Transportation and Information
Food Retailing and Food supply chain
Sourcing and Pricing
Warehousing
Discussions – Interactions - Feedback
Supply Chain and Value Chain Management
Cluster Development

SN Panigrahi 5
Agriculture is the primary source of livelihood for about 58 per cent of India’s population.
Gross Value Added by agriculture, forestry and fishing is estimated at Rs 18.53 trillion (US$ 271.00
billion) in FY18.
The Indian food industry is poised for huge growth, increasing its contribution to world food trade
every year due to its immense potential for value addition, particularly within the food processing
industry.
India has the second largest arable land of 161 million hectares and has the highest acreage under
irrigation. Next to China, India ranks second largest food producer in the world and has the potential to
immerge the biggest with its food and agricultural sector. India has diverse agro-climatic conditions and
has a large and diverse raw material base suitable for food processing companies. Its strategic
geographic location (proximity of India to markets in Europe and Far East, South East and West Asia)
provides a lot of inherent advantages to the country.
The Indian food and grocery market is the world’s sixth largest, with retail contributing 70
per cent of the sales. The Indian food processing industry accounts for 32 per cent of the
country’s total food market, one of the largest industries in India and is ranked fifth in terms of
production, consumption, export and expected growth.
It contributes around 8.80 and 8.39 per cent of Gross Value Added (GVA) in Manufacturing
and Agriculture respectively, 13 per cent of India’s exports and six per cent of total
industrial investment.

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Agriculture is the primary source of livelihood for about 58 per cent of India’s
population.
Gross Value Added by agriculture, forestry and fishing is estimated at Rs 18.53 trillion
(US$ 271.00 billion) in FY18.
The Indian food and grocery market is the world’s sixth largest, with retail contributing
70 per cent of the sales.
The Indian food processing industry accounts for 32 per cent of the country’s total food
market, one of the largest industries in India and is ranked fifth in terms of production,
consumption, export and expected growth.
It contributes around 8.80 and 8.39 per cent of Gross Value Added (GVA) in
Manufacturing and Agriculture respectively, 13 per cent of India’s exports and six per
cent of total industrial investment.

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• During 2017-18* crop year, food grain production is estimated at record 284.83 million tonnes.
In 2018-19, Government of India is targeting food grain production of 285.2 million tonnes.
Food Grain
Production
• Milk production was estimated at 165.4 million tonnes during FY17, while meat production was
7.4 million tonnes. As of September 2018, total area sown with kharif crops in India reached
105.78 million hectares.
Milk Production
• India is the second largest fruit producer in the world. Production of horticulture crops is
estimated at record 314.7 million tonnes (mt) in 2018-19 as per third advance estimates.
Cultivation of Fruit
& Horticulture
• Total agricultural exports from India grew at a CAGR of 16.45 per cent over FY10-18 to reach
US$ 38.21 billion in FY18. In FY2019 agriculture exports were US$ 38.54 billion. India is also
the largest producer, consumer and exporter of spices and spice products.
Agricultural
Exports
• Spice exports from India reached US$ 3.1 billion in 2017-18. Tea exports from India reached a
36 year high of 240.68 million kgs in CY 2017 while coffee exports reached record 395,000
tonnes in 2017-18.
Spice Exports
• Food & Grocery retail market in India was worth US$ 380 billion in 2017.
Food & Grocery
Retail Market

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According to the Department for Promotion of Industry and Internal Trade (DPIIT), the Indian
food processing industry has cumulatively attracted Foreign Direct Investment (FDI)
equity inflow of about US$ 9.08 billion between April 2000 and March 2019.
Some major investments and developments in agriculture are as follows:
 Investments worth Rs 8,500 crore (US$ 1.19 billion) have been announced in India for
ethanol production.
 In early 2019, India will start exporting sugar to China.
 The first mega food park in Rajasthan was inaugurated in March 2018.
 Agrifood start-ups in India received funding of US$ 1.66 billion between 2013-17 in 558
deals.
 In 2017, agriculture sector in India witnessed 18 M&A deals worth US$ 251 million.

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Some of the recent major government initiatives in the sector are as follows:
 Prime Minister of India, launched the Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan) and
transferred Rs 2,021 crore (US$ 284.48 million) to the bank accounts of more than 10 million
beneficiaries on February 24, 2019.
 The Government of India has come out with the Transport and Marketing Assistance (TMA) scheme to
provide financial assistance for transport and marketing of agriculture products in order to boost
agriculture exports.
 The Agriculture Export Policy, 2018 was approved by Government of India in December 2018. The new
policy aims to increase India’s agricultural exports to US$ 60 billion by 2022 and US$ 100 billion in the
next few years with a stable trade policy regime.
 In September 2018, the Government of India announced Rs 15,053 crore (US$ 2.25 billion)
procurement policy named ‘Pradhan Mantri Annadata Aay SanraksHan Abhiyan' (PM-AASHA), under
which states can decide the compensation scheme and can also partner with private agencies to
ensure fair prices for farmers in the country.
 In September 2018, the Cabinet Committee on Economic Affairs (CCEA) approved a Rs 5,500 crore
(US$ 820.41 million) assistance package for the sugar industry in India.

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 The Government of India is going to provide Rs 2,000 crore (US$ 306.29 million) for computerization
of Primary Agricultural Credit Society (PACS) to ensure cooperatives are benefitted through digital
technology.
 With an aim to boost innovation and entrepreneurship in agriculture, the Government of India is
introducing a new AGRI-UDAAN program to mentor start-ups and to enable them to connect with
potential investors.
 The Government of India has launched the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) with an
investment of Rs 50,000 crore (US$ 7.7 billion) aimed at development of irrigation sources for
providing a permanent solution from drought.
 The Government of India plans to triple the capacity of food processing sector in India from the
current 10 per cent of agriculture produce and has also committed Rs 6,000 crore (US$ 936.38 billion)
as investments for mega food parks in the country, as a part of the Scheme for Agro-Marine
Processing and Development of Agro-Processing Clusters (SAMPADA).
 The Government of India has allowed 100 per cent FDI in marketing of food products and in food
product e-commerce under the automatic route.

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 Sugar production in India has reached 27.35 million tonnes (MT) in 2018-19 sugar season, as of
March 15 2019, according to the Indian Sugar Mills Association (ISMA).
 The Electronic National Agriculture Market (eNAM) was launched in April 2016 to create a unified
national market for agricultural commodities by networking existing APMCs. Up to May 2018, 9.87
million farmers, 109,725 traders were registered on the e-NAM platform. 585 mandis in India have
been linked while 415 additional mandis will be linked in 2018-19 and 2019-20.
 Agriculture storage capacity in India increased at 4 per cent CAGR between 2014-17 to reach 131.8
million metric tonnes.
 Coffee exports reached record 395,000 tonnes in 2017-18.
 Between 2014-18, 10,000 clusters were approved under the Paramparagat Krishi Vikas Yojana (PKVY).
 Between 2014-15 and 2017-18 (up to December 2017), capacity of 2.3 million metric tonnes was added
in godowns while steel silos with a capacity of 625,000 were also created during the same period.
 Around 100 million Soil Health Cards (SHCs) have been distributed in the country during 2015-17 and
a soil health mobile app has been launched to help Indian farmers.

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India is expected to achieve the ambitious goal of doubling farm income by 2022.
The agriculture sector in India is expected to generate better momentum in the next few years due to
increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold
storage.
Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian
farmers. India is expected to be self-sufficient in pulses in the coming few years due to concerted efforts
of scientists to get early-maturing varieties of pulses and the increase in minimum support price.
The government of India targets to increase the average income of a farmer household at current prices
to Rs 219,724 (US$ 3,420.21) by 2022-23 from Rs 96,703 (US$ 1,505.27) in 2015-16.
Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality
Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP),
Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by the food processing
industry will offer several benefits.
References: Agricultural and Processed Food Products Export Development Authority (APEDA),
Department of Commerce and Industry, Union Budget 2018–19, Press Information Bureau, Ministry of
Statistics and Programme Implementation, Press Releases, Media Reports, Ministry of Agriculture and
Farmers Welfare, Crisil

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In a land where roughly 70% of the population resides in rural areas and half of the nation’s population
farms for a living, the importance of India’s agricultural sector cannot be overstated. Despite these
massive numbers, the country’s agricultural output has been unable to keep pace with growing demands
and global competition.
According to the World Bank, “India’s rice yields are one-third of China’s and about half of those in
Vietnam and Indonesia. With the exception of sugarcane, potato and tea, the same is true for most other
agricultural commodities.
”There are multiple reasons for this productivity gap, but one significant one is glaring inefficiencies in
India’s agricultural supply chains. Logistics play a critical role in any economic sector, but when goods are
perishable the supply chain becomes that much more important.
Much of the blame for these inefficiencies has been placed on the government. The NY Times reports that
critics accuse policymakers of focusing on “more glamorous, urban industries like information technology,
financial services and construction” [emphasis added] at the expense of the rural economy.
Another factor is the overal lack of consolidation that has occurred in the agricultural sector, with the
majority of production still operating at the single farmer level.

SN Panigrahi 16
https://www.youtube.com/watch?v=lZPO5RclZEo
Click

SN Panigrahi 17
Supply chains are principally concerned with the Flow of Materials and
Information between supply chain member organizations—procurement of
materials, transformation of materials into finished products, and distribution of
those products to end customers in return for Financial Considerations.
Today’s information-driven, integrated supply chains are enabling organizations to
reduce inventory and costs, add product value, extend resources, accelerate time
to market, and retain customers.
The real measure of supply chain success is how well activities coordinate across
the supply chain to create Value for Consumers, while increasing the profitability
of every link in the supply chain and Minimize Associated Risks. In other words,
supply chain management is the integrated process of producing value for the end
user or ultimate consumer. Therefore, generally Supply Chain is super-imposed
with Value Chain.

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Supply Chain Basics
Supply Chain Management (SCM) can be defined as management of the supply chain as an
integrated process of acquisition and management of flow of supply of from point of origin
to point of consumption and delivering further value added output to the next level point of
consumption (like from supplier to manufacturer to wholesaler to retailer and to final
consumer) by balancing supply and demand with optimal management of resources with
the objective of establishing relationships for maximising value for mutual benefits on
economically, socially and environmentally sustainable basis.

Supplier
Sources:
Plants
Vendors
Ports (Import)
Manufacturer Stock Points Distributors Retailers Consumers
Manufacturing
Assembling
Processing
Treatment
Fabrication
Warehousing
Storing
Stocking
Stock Yards
Wholesalers
Distributors
Agents
Stockiests
Retailers
Traders
Merchants
Shops
Dealers
Consumers
End Users
Buyers
Clients
Transport & Logistics

Customer
Enquiry
Sourcing
Supplier
Credential
Verification &
Inspection
Price
Negotiations
& Sampling
Order
Placement
Pre-
Production
Sample
Approval &
Lab Testing
Production
Pre-Dispatch
Inspection
Customs &
Logistics
Goods
Delivered
Feedback
from
Customers
Improvement

SN Panigrahi 21
SCM
Supply Chain
Strategy & Planning
Demand – Supply &
Lead Time
Management
Logistics
Management
ProcurementAsset Management
Information
Management
Product Life Cycle
Management

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LogisticFunctions
Order Processing
Order Receipt, Verification, Planning & Scheduling for
Execution & Order Fulfilment
Inventory Control Enough Inventories to meet Customer Requirements, and at
the same time Keep the Inventory Holding Cost Low
Warehousing Warehousing is the Storing of Finished Goods until they are
sold.
Transportation Movement of goods from the supplier to the buyer
Material Handling &
Storage
Material handling system should support the storage
system for speedy & Safe movement
Logistical Packaging For damage protection; Ease of Handling; Storage Space
Economy
Information Processing &
Customer Service
Information Sharing is Central to Smooth Operations &
Customer Satisfaction

Supply Chain Management is
the design and management of processes
across organizational boundaries
with the goal of matching supply and demand
in the most cost effective way.
Supply Demand
Mission impossible: Matching Supply and Demand

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Supply is Wasted unless Linked with Demand
Source : Doubling Farmers’ Income – Volume III

SN Panigrahi 25
Uncertainty in Demand and/or Supply
Changing Customer Requirements / Buying Behavior's / Changing
Tastes
Decreasing Product Life Cycles
Fragmentation of Supply Chain Ownership
Conflicting Objectives in the Supply Chain

• Marketing/Sales wants: more FG inventory, fast
delivery, many package types, special
Wishes/Promotions
• Production wants: bigger batch size, depots at
factory, latest ship date, decrease changeovers, stable
production plan
• Distribution wants: full truckload, low depot costs,
low distribution costs, small # of SKUs, stable
distribution plan

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Integrated supply chain management refers to an enterprise resource planning approach to
supply chain management. A business facilitates relationships with all of its suppliers and
manages all distribution and logistics activities through a centralized system rather than having
multiple systems within the organization. Concentrated professional expertise and cost
efficiency are core benefits of the integrated supply chain process, but developing collaboration
is an obstacle.
• Implementing integrated SCM requires:
• Analyzing the whole supply chain
• Starting by integrating internal functions first
• Integrating external Stakeholders through partnerships
• Supply Chain Objectives
• Reduce costs, improve quality
• Reduce lead time and inventory
• Reduce time to market
• Increase sales
• Improve demand data/forecasting

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Planning
and
control
Research, Product
Development,
Work &
Organization
structure &
Culture
Product flow facility
structure
Information flow
structure
Managemen
t Methods
Power and
leadership
structure
Risk and
Reward
Structure
Procurement,
Logistics &
Warehousing
Manufacturing
Marketing,
sales &
Distribution
Starting by
Integrating
Internal
Functions First
Integrating External
Stakeholders through
Partnerships
Compliance Requirements
of Govt. & Other
Regulating / Promoting &
Influencing Authorities
Suppliers
Customers
Logistic Providers
Service Providers
Local Community
Other Stakeholders
Govt.
Regulatory Bodies
Banks
Industry Associations
Interested Groups
Media
Analyzing the whole supply chain

SN Panigrahi 29
What Must a Partner Bring?
Reliability
Excellence
Expertise
Problem-
solvingskills
Continuous
improvement
Support
Value
Positive
Attitude
GlobalReach
Strong
Leadership

SN Panigrahi 30
Consumer
Expectations and
Competition –
power has shifted to
the consumer
Globalization –
Capitalize on
Emerging markets
Information
Technology –
e-commerce, Internet,
EDI, scanning data,
intranets
Government
Regulations –
like trade barriers
Environment Issues
– e.g. waste
minimization
• SCM must consider the following trends, improved capabilities,
& realities

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Competitive Strategy
Supply Chain Strategy Strategy
Supply Chain Efficiency and
Responsiveness are a Balancing Act
Efficiency:
Efficient Production means making products
without wasting materials, natural resources
or man hours.
Efficient Supply means manage orders and
processing, and meet a stable, predictable
demand at a lower cost.
Efficient facility management means running
your business while reducing your energy
and other resource costs and minimizing its
carbon footprint.
Responsiveness
Responsiveness allows businesses to act
and react swiftly to change—both internally
and in the marketplace.
Responsive supply chain works
collaboratively among stakeholders to
produce enough of a product to satisfy
uncertain demand.
Efficiency Vs Responsiveness
Efficiency and
Responsiveness are polar
opposites. Supply chain
efficiency requires speed, and
large, uniform orders.
Responsive demands a
slower pace, and, sometimes,
customized orders. But they
both serve the same end
goal, and both are equally
important.

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Efficient Responsiveness
An efficient supply chain gets your products to their
destinations in the most cost-effective way : Saves
Money and Increases Profits & Improves Bottom Line.
A responsive supply chain has to do two things: it has to
be responsive to your needs, and it has to be responsive
to the needs of your customers.
Hallmarks of an efficient supply chain:
Optimization. This can include optimized shipping routes,
warehouse locations, personnel and even your computer
network to get the best and fullest use out of your existing
infrastructure. Half empty trucks, unused warehouses and
redundant computer systems are simply a waste of your
assets.
High quality partners. Your third party logistics partners need
to be the best of class. Your 3PL should have state-of-the-art
technologies at their disposal, have a policy of transparency,
and have a proven track record.
Inventory management. Too much inventory is costly to
purchase, handle, store and track. Too little inventory can be
costly, as well. It can mean lost production time, expensive last
minute orders and even angry customers. An efficient supply
chain finds the right balance when it comes to inventory.
Customer satisfaction. Supply chain efficiency is directly
linked to customer satisfaction. It gets your products into the
hands of the people who need them quickly and at the best
price.
Order-fill accuracy. In today's highly competitive market, a
guarantee of quick deliver is a real selling point. If that order
arrives quickly but is inaccurate or incomplete, then you've
wasted time and money and may have lost a customer as well.
Scalable fulfillment. All businesses experience ups and
downs. Sales can be affected by the season, the weather and
the economy. A responsive supply chain is one that can
accommodate changing sales volumes.
Communication. When you— or your customers— have
questions, problems or concerns, it's vital that there be open
lines of communication.
Customer satisfaction. People can sometimes throw a
monkey wrench into to the best supply chain. They order the
wrong thing. They change their minds. They need something
sooner, not later. This is when a responsive supply chain really
shines. It is flexible enough to handle returns, for instance, and
offers high-quality customer service. Customers who feel that
their specific needs are being met, and who can reach out for
help when there is a problem to be solved, are satisfied
customers.
Supply Chain Efficiency and Responsiveness

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SupplyChain
KeyDrivers Logistic Drivers
Cross-Functional Drivers
Location (Where Best to Do & How Much) – Capacity – Flexibility
Factory Sites –Storage Points (Warehouses / Stores)Facilities
Raw Materials – Semi-Finished Goods – Finished Goods
C Cycle Inventory – Seasonal Inventory – Safety Inventory;
. How much to Produce & How much to Stock
Inventory
Movement from one Place to other. Minimum & Faster is
. Advisable. Modes : Road – Rail – Water Ways - Air - Pipeline
Transportation
Important Link to coordinate with all the Activities.
. Required for Accurate Demand & Supply Forecasting and
. Planning. Enabling Technologies:ERP/IMS, RFID, Internet
Information
Functions a Firm Performs & Functions Outsourced;
l Single Vs Multiple Sourcing; Competitive Strategy
Sourcing
Competitive Strategy Matching Demand – Supply & .
. Competition; Differential Pricing - Globalization
Pricing

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SupplyChain
KeyDrivers Supply-Side Drivers
Demand-Side Drivers
Changing Requirements – Delivery Efficiencies - Supply
Disruptions – RisksInward Supply
What – How – Where & When to Produce
Mass Production – Customized; Push Vs Pull
Production
Suppliers / Vendors Performance, Capabilities; Agility &
R Responsiveness
Supplier
Accurate Demand & Supply Forecasting and .
Planning; Forecasting Errors; Abrupt Changes
Forecast
Demand Fluctuations – Changes in Customer
Preferences; Entry of Competition; Competitors Offerings
Demand
Shifts in Consumer Behavior;Customer

Driver Efficiency Responsiveness
Production
Optimal Production:
- Little Excess Capacity
- Narrow Focuss
- Few Central Plants
Additional Capacity &Variety
- Excess Capacity
- Flexible Manufacturing
- Many Smaller Plants
Inventory
Cost of Holding :
- Low Inventory Levels
- Fewer Items
Availability :
- High Inventory Level
- Wide Range of Items
Transportation
Consolidation :
- Few Large Shipments
- Slow Cheaper Modes
Speed :
- Frequent Shipments
- Fast & Flexible Modes
Facilities
Consolidation / Dedicated:
- Few Central Locations,
- Serve Wide Areas
Proximity / Flexibility :
- Many Locations Close to Customers
Information
Low cost/slow/no duplication:
- Minimize / Rationalize Cost of Collecting
Information
- Cost of Information Drops while other
Costs Rise
High cost/ streamlined/reliable:
- Collect & Share Timely & Accurate Data
Sourcing
Low cost sources:
- Assigning Tasks based on Economies of
Scale;
- Cost Competitiveness
Responsive sources
- Assigning Tasks based on Agility & Uncertainty Handling
Pricing
Constant price:
- Fixed Pricing Strategy
Low-High price:
- Differential Pricing Model

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Collaboration
Optimization
Visibility
Connectivity
Execution
Speed

SN Panigrahi 38
Supply Chain Management in Agriculture is defined as
“The management of movement of agricultural commodities, from the
farm through the rural and urban markets to reach the doorsteps of end
consumer- both household and industrial consumer; consists of various
players, starting from the agricultural producer, through the middle men,
commission agents and traders, the bulk purchasers or procurers, millers
or intermediary processor, warehousing agents, or cold storage space
providers and transporters, through whom material finally reaches either
retail distribution system for raw consumption or the food processing
industries where it goes through the value addition processes and moves
through a distinct and a separate supply chain to reach the targeted
consumers”(Ramana & Ajoy, 2005).

SN Panigrahi 39
Agribusiness, supply chain management (SCM) implies managing the
relationships between the businesses responsible for the efficient production and
supply of products from the farm level to the consumers to meet consumers’
requirements reliably in terms of quantity, quality and price. In practice, this often
includes the management of both horizontal and vertical alliances and the
relationships and processes between firms .

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Input Suppliers Farm Process / Food Producers Consumers
Inputs
Land
Water
Seeds
Fertilizers
Pesticides
Farm
Implements
Tractors /
Machineries
Farm
Production /
Harvesting
Post
Harvesting
Irrigation
Climate
Cultivation
Weighing
Grading
Cleaning
Blending
Certification
Transportation
Storage /
Warehousing
Milling /
Food
Processing
Agri-
Industry
- Milling
Food –
Manufacturing
Processing
Bakeries
Packing /
Labeling
Marketing
Haats /
Mandies
Wholesaler
Distributors
Retailers
Consumer

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Materials Flow
Forward Logistics - Materials – Supplier to Customer
Reverse Logistics – Sales Returns : Customer to Supplier
Information Flow
Product Data, Descriptions & Pricing - Bills of Materials, Invoice
Customer Order Information, Delivery Scheduling
Financial Flow
Credit Notes – Quality Claims & Damages
Consideration for Materials Supply – Debit Notes –
Late Fee for Release of Payments Due
Value Flow
Value Addition in Supply : Inputs to Production - Distribution
Customer Feedbacks – Improvements - Relationships
Risk Flow
Demand, Supply, Price, Lead Time, etc
Cash Flow Constraints, Inventory Financing & Delayed payment

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Farmers
Agri & Food
Industry /
Processors
Wholesalers/
Distributors
Retailors
Consumers
Material Flow - Information Flow - Financial Flow
Value Flow - Risk Flow
Upstream Down Stream

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Materials Flow
Product Flow includes movement of goods from supplier to consumer (internal as well as external), as well as
dealing with customer service needs such as input materials or consumables or services like housekeeping.
Input Raw Materials, Intermediate Goods flow from Supplier to Manufacturer and Finished
Goods move from Manufacturer to Wholesalers / Distributors and then Retailers and
ultimately reaches to Consumers. Materials move through Transportation & Stores /
Warehouses.
Product flow also involves returns / rejections (Reverse Flow).
Information Flow
Supply chain management involves a great deal of diverse information–bills of materials, product data,
descriptions and pricing, inventory levels, customer and order information, delivery scheduling, supplier and
distributor information, delivery status, commercial documents, title of goods, current cash flow and financial
information etc.–and it can require a lot of communication and coordination with suppliers, transportation
vendors, subcontractors and other parties. Information flows in the supply chain are bidirectional. Faster
and better information flow enhances Supply Chain effectiveness and Information Technology (IT) greatly
transformed the performance.

SN Panigrahi 48
Financial Flow
In Supply Chain, Financial / Funds (Revenues) flow from the final consumer to
Supplier, back through the other links in the chain (typically retailers, distributors, processors and
suppliers). Funds Flow in opposite directions: Receivables (Funds Inflow : Consideration for Materials
Supply) and Payables (Funds Outflow). There is also funds flow from Supplier to Customer in the form of
Credit Notes for Quality Claims & Damages
Value Flow
A supply chain has a series of value creating processes spanning over entire chain in order to provide added
value to the end consumer. At each stage there are physical flows relating to production, distribution; while at
each stage, there is some addition of value to the products or services.
Value flows in a series of interconnected activities which are required to bring a product or service from
conception, through the different phases of production (involving a combination of physical transformation
and the input of various product services), delivery to final customers, and final disposal after use.
Individual suppliers, producers and marketers who are associated through a supply chain coordinate their
value creating activities with one another and, in the process, create greater value than they can, when they
operate independently.

SN Panigrahi 49
FLOW OF RISK :
Risks in supply chain are due to various uncertain elements broadly covered under demand, supply, price,
lead time, etc. Supply chain risk is a potential occurrence of an incident or failure to seize opportunities of
supplying the customer in which its outcomes result in financial loss for the whole supply chain. Risks
therefore can appear as any kind of disruptions, price volatility, and poor perceived quality of the product or
service, process / internal quality failures, deficiency of physical infrastructure, natural disaster or any event
damaging the reputation of the firm.
Risk factors also include cash flow constraints, inventory financing and delayed cash payment. Risks can be
external or internal and move either way with product or financial or information or value flow.

SN Panigrahi 51
Supply
Chain Stage
Issues with Product & Process
Characteristics
Impact on Logistic/Flow of
goods.
Overall
Shelf-life constraints for raw materials,
intermediates and finished products and
changes in product quality level while
progressing the supply chain (decay).
• Timing constraints (goods have
to be supplied quickly to avoid
decay).
Recycling of Materials Required.
• Information requirements (correct
information of goods is essential).
Growers /
Producers
• Long Production Times (producing
new or additional agro-products takes a
lot of time)
• Responsiveness
• Seasonality in production
• Variability of quality and quantity of
supply
• Flexibility in process and
planning

52
• High volume, low variety (although the variety is increasing) production systems
• Importance of production planning and
scheduling focusing on high capacity
utilization
• Highly sophisticated capital-intensive machinery leading to the need to maintain
capacity utilization
• Flexibility of recipes
• Variable process yield in quantity and quality due to biological variations,
seasonality, random factors connected with weather, pests, other biological
hazards
• Timing constraints, ICT possibility to
confine products
• A possible necessity to wait for the results of quality tests
• Flexible production planning that can
handle this complexity
• Alternative installations, alternative recipes, product-dependent cleaning and
processing times, carry over of raw materials between successive product lots, etc.
• Need for configurations that facilitate
tracking and tracing
• Storage buffer capacity is restricted, when material, intermediates or finished
products can only be kept in special tanks or containers
• Necessity to value all parts because of the complementary nature of agricultural
inputs (for example, beef cannot be produced without the co-product hides)
• Necessity for lot traceability of work in process due to quality and environmental
requirements and product responsibility

SN Panigrahi 53
• Variability of quality and quantity of supply of farm-
based inputs
• Pricing issues
• Seasonal supply of products requires global (year-
round) sourcing
• Timing constraints
• Requirements for conditioned transportation and
storage means
• Need for conditioning
• Pre-information on quality
status of products

55
Supply Chain
Strategy
Supply Chain
Planning
Supply Chain
Enterprise
Applications
Asset
Management
Procurement
Product Lifecycle
Management
Logistics
Supply Chain
Management

SN Panigrahi 56
The major
constraints in
production of
fresh fruits and
vegetables have
been identified in
several research
studies
Non-availability of
Quality Seeds
Inadequate Irrigation
Facilities
Lack of Soil Testing
Facility and Extension
Staff
Inefficiency in Pest
Management
Credit Availability
Constraint
High Cost of Production
Lack of Information
Huge Post-Harvest
Losses
High Transportation
Cost
Major Constraints in Agriculture Production

58
.
 An inter-ministerial panel formed by the Centre on doubling farmers’ income by 2022
will submit its final report next month, its Chairman Ashok Dalwai.
 The Dalwai Committee, set up in April 2016, has already written 14 volumes identifying
ways to double farmers’ 2015-16 income level, in real terms, in seven years.
 The committee has observed that an increase in the Minimum Support Price (MSP) could be one
of the instruments for enhancing farmers’ income. However, increasing the MSP may not always
have a positive outcome from the macroeconomic point of view.
 “A more straightforward, and potentially more beneficial, means of raising farm incomes could be
reforming the marketing system of agricultural produce, while also developing new institutions
and reviving existing ones to facilitate linking of the farmer to the markets,” it added.
 The panel said the average income of an agricultural household during July 2012 to June 2013 was
as low as Rs.6,426, as against its average monthly consumption expenditure of Rs.6,223. As many
as 22.50% of the farmers live below the official poverty line.

SN Panigrahi 59
Indian farmers incur Rs 92,651 crore per year in post-harvest losses,
the primary causes of which are poor storage and transportation facilities.
Ironically, according to the high-level Dalwai committee report , an
investment of Rs 89,375 crore—a figure marginally lower than the
annual post-harvest losses—is all it takes to improve the state of storage
and transportation facilities for food crops.
If these were prevented, over 5 crore people could be fed, for a year, at
the rate of Rs 50 per day.
Since a market is the primary medium for farmers to exchange their produce
for money, lack of logistics connectivity to ensure that their harvest reaches
markets in time results in lowering of the farmers’ ability to monetise their
produce. This becomes even more critical in case of perishable fruits and
vegetables.

61
Demand Driven Agricultural Logistics System
Agricultural Value System (AVS)
Farm Linked Activities
Marketing Intelligence System
Agricultural Risk Assessment and Management
Effective Input Management
Farmer-centric National Agricultural Marketing System
Empowering Farmers
Promoting Sustainable Agriculture
Enhancing Production through Productivity
Structural and Governance Reforms in Agriculture
Developing Hub and Spoke System
Research & Development and ICT

62
.
Market Expansion &
Access
Reducing Produce
Wastage
Upgrading
Agri-Logistics
Enabling Reforms &
Investment
Enabling Trade
Regime for Exports

63
In the Hub and Spoke System, components of the logistics chain work to
consolidate the fragmented production into larger and more viable handling
loads. Inventory so collated, is managed for the purpose of meeting demand,
current and future, depending on the longevity of the inventory stored.
The subsequent consolidation into inventories is thereafter deconsolidated and
distributed to multiple consumers at the front end – the hub-spoke system is
reversed at the front end of the supply chain. Therefore, a hub and spoke system
works in both the back-end and the front-end.

SN Panigrahi 65
Logistic Management
https://www.youtube.com/watch?v=4-QU7WiVxh8
Click

66
LogisticFunctions
Order Processing
Order Receipt, Verification, Planning & Scheduling for
Execution & Order Fulfilment
Inventory Control Enough Inventories to meet Customer Requirements, and at
the same time Keep the Inventory Holding Cost Low
Warehousing Warehousing is the Storing of Finished Goods until they are
sold.
Transportation Movement of goods from the supplier to the buyer
Material Handling &
Storage
Material handling system should support the storage
system for speedy & Safe movement
Logistical Packaging For damage protection; Ease of Handling; Storage Space
Economy
Information Processing &
Customer Service
Information Sharing is Central to Smooth Operations &
Customer Satisfaction

68
Warehousing
Warehousing and all that
goes along with it is part of a
Logistics Management.
Logistics includes inventory
management, and
distribution. It falls under the
supply chain umbrella, which
also includes product
development, procurement,
marketing, sales, and other
product-related disciplines.

SN Panigrahi 69
What is Warehousing?
Warehousing is the act of storing goods that will be sold or distributed later. While
a small, home-based business might be warehousing products in a spare room,
basement, or garage, larger businesses typically own or rent space in a building
that is specifically designed for storage.
Warehouse vs. Distribution Center
You might hear “warehouse” and “distribution center” used interchangeably, but
technically, a warehouse provides nothing more than storage. A distribution
center, on the other hand, stores product but also fulfills orders.

70
Location of
Warehousing
Facilities
Number of
Warehouses
Size of the
Warehouse
Warehouse Layout
Design of the
Building
Ownership of the
Warehouse
Storage &
Movement of
Goods
Financing
Information about
Warehousing
Protection of
Goods / Risk
Bearing
Processing
Grading and
Branding

SN Panigrahi 71
Warehousing Elements
Whether the purpose is strictly storage or storage plus order fulfillment, warehouses use specific elements
that help manufacturers, distributors, and retailers monitor inventory and store it safely. An overview of basic
elements includes:
 Shelving and rack systems that offer maximum storage capacity and easy product access.
 A climate control system for the product being stored. This is particularly important for frozen
products or those requiring refrigeration, including certain pharmaceutical or laboratory
products, and others that degrade if exposed to too much heat.
 Inventory control software that tells the product owner – who isn’t necessarily the building
owner – where all individual units are in the system at all times.
 Equipment that can move products from point A to point B – forklifts, pallet jacks, bins that
hold products for orders, and conveyor belts, for example.
 Shipping supplies for order fulfillment.
 People who load products into a warehouse and others (“pickers”) who fill orders in a true
distribution center, plus those who manage the facility and operation.
 Security to protect stored products.
 Access to cost-effective transportation to bring products in or move them out as orders are
fulfilled. That often means easy access to interstates, rail lines, or airports.

SN Panigrahi 72
Types of
Warehouse
On the basis
of Ownership
On the basis
of Type of
Commodities
Stored
Public Warehouses
Private Warehouses
Bonded Warehouses
General Warehouses
Special Commodity
Warehouses
Refrigerated
Warehouses
Storage of mostly food grains,
fertilizers etc
Storage of specific commodities
like cotton, tobacco, wool and
petroleum
Meant for such perishable
commodities as vegetables,
fruits, fish, eggs and meat.
Owned by the govt.
Owned by Private Entities.
Customs Bonded

SN Panigrahi 73
Public
Warehouses
Central Warehousing Corporation (CWC)
State Warehousing Corporations (SWCs)
Food corporation of India (FCI)

SN Panigrahi 74
This corporation was established as a statutory body in New Delhi on 2nd March 1957. The Central
Warehousing Corporation provides safe and reliable storage facilities for about 120 agricultural and
industrial commodities.
Functions
 To acquire and build godowns and warehouses at suitable places in India.
 To run warehouses for the storage of agricultural produce, seeds, fertilizers and notified
commodities for individuals, co-operatives and other institutions,
 To act as an agent of the govt. for the purchase, sale, storage and distribution of the above
commodities.
 To arrange facilities for the transport of above commodities.
 To subscribe to the share capital of state Warehousing corporations and
 To carry out such other functions as may be prescribed under the Act.
 The Central Warehousing Corporation is running air-conditioned godowns at Calcutta, Bombay
and Delhi, and provides cold storage facilities at Hyderabad.
 Special storage facilities have been provided by the Central Warehousing Corporation for the
preservation of hygroscopic and fragile commodities.
 The corporation has also evolved techniques for the storage of spices, coffee, seeds and other
commodities.

SN Panigrahi 75
Separate warehousing corporations were also set up in different States of the
Indian Union. The areas of operation of the State Warehousing Corporations are
centres of district importance. The total share capital of the State Warehousing
Corporations is contributed equally by the concerned State Govt. and the
Central Warehousing Corporation.

SN Panigrahi 76
Apart from CWC and SWCs, the Food Corporation of India has also created storage facilities. The
Food Corporation of India is the single largest agency which has a capacity of 26.62 million tonnes.
PROCUREMENT OF FOODGRAINS
QUALITY CONTROL AND SCIENTIFIC PRESERVATION
TRANSPORT MANAGEMENT
DISTRIBUTION OF FOODGRAINS

SN Panigrahi 77
Agricultural warehousing accounts for fifteen percent of the warehousing market in India and is estimated
to be worth Rupees 8,500 crore.
It is however perceived to be inadequate and unorganised.
More than 40 percent of the agricultural warehouses are run by state enterprises such as FCI, CWC
and SWCs.
30 percent of the warehousing capacity is held by unorganised small godown players. These
unorganised warehouses lack scale and quality.
The warehousing capacity gap estimated by the Planning Commission stands to be at 27 million metric
tonnes today.
Out of the total capacity present in the Indian warehousing today, only 19.44 lakh metric tonne (1.94 million
metric tonne) has been registered with Warehousing Development and Regulatory Authority (WDRA) by
a total of seven hundred and six warehouses of CWC, SWC, Primary Agriculture Co-operative Society
(PACS).1

SN Panigrahi 78
Agricultural Products :Transportation Services
Transport is considered to be an important aspect in improving
agricultural efficiency. It improves the quality of life of
individuals, structures a market for agricultural productions,
makes interaction possible among geographical as well as
regions and opened up new areas to economic focus.

80
• The distance and the accessibility of the destination
• Type of goods that are transported; for instance, there are different requirements
for transition of perishable crops and packing material
• The size or the quantity of goods that need to be transported; determine the optimal
mode of transport, as well as the price of delivery
• International or national laws and regulations
• Available infrastructure and farmer's financial possibilities
• Functionality and additional properties of any transport mode, as well as
any means of transport
When choosing the optimal mode of transport, farmers should
consider a few important aspects:

SN Panigrahi 81
The Peculiar Characteristic of Agriculture Produce are:
 Bulkiness
 Perishability
 Wide Varietal Differences
 Dispersed Production
 Processing need for consumption
 Seasonality
 Comparative Advantage

82
What is
Inventory
• Inventory is the
raw materials,
component parts,
work-in-process,
or finished
products that are
held at a location
in the supply
chain.
Reasons for
Inventories
Maintain Continuity of
Supply
Improve Customer
Deliveries
Encourage Production,
Purchase, and
Transportation Economies
Act as a hedge against price
changes
Protect against uncertainties
in demand and lead times
Act as a Hedge (Safety)
against Contingencies
Cost & Risks of
Inventory
• consume Capital
Resources
• Carrying Costs
• Procurement costs
• Operational costs
• Out-of-stock Costs
• Risk of Obsolence
Agriculture
Inventory
• Various fertilizers,
pesticides, fuel or
seeds
• Food Grains, Pulses
other Farm Produce
• Packing / Labeling &
other Consumables
• Processed Food

83
Starting Inventory
4 3 2 1
Arrivals
5
6
7
8
Usable Inventory
4 3 2 1
8 7 6 5
4
3
2
1
Inventory Turn
Public Distribution System (PDS)
Traders / Millers
Processing / Feed
Exports
Ending Inventory
8 7 6 5
Next
Procurement
Cycle
First In
First Out
Procurement

84
Managing inventory-turns in Strategic Reserves will mitigate loss of inventory and safeguard value. The
predetermined quantity held in reserve should be cycled into consumption, so that aged inventory need
not be discarded or disposed at a total loss. A first-in-first-out (FIFO) procedure can be implemented.
The available storage capacity (CAP storage, closed Warehouses or Silos) can be optimised by improving
inventory distribution and management.

SN Panigrahi 85
Buffer Stock
A buffer stock is a system or scheme which buys and stores stocks
at times of good harvests to prevent prices falling below a target
range (or price level), and releases stocks during bad harvests to
prevent prices rising above a target range (or price level).

SN Panigrahi 86
Buffer Stock Policy of the GOI
The concept of buffer stock was first introduced during the IV Five Year Plan (1969-74).
Buffer stock of food grains in the Central Pool is maintained by the GOI for
(i) meeting the prescribed minimum buffer stock norms for food
security,
(ii) monthly release of food grains for supply through TPDS and Other
Welfare Schemes,
(iii) meeting emergency situations arising out of unexpected crop failure,
natural disasters, etc. and
(iv) price stabilisation or market intervention to augment supply so as to
help moderate the open market prices.
Buffer and Strategic Reserve Norms
In order to ensure supply of quality Food Grains to consumers and to minimize storage losses
caused due to long period of storage, Government has adopted policies to optimize the level of
procurement of wheat and paddy/rice and to liquidate old stock in such a manner, that FCI does
not carry any issuable stock of more than 2-years of age at the end of any year.

87
Government Policy of Procurement of Food Grains
Objectives
Ensuring MSP to the Farmers
Make Availability of Food Grains to the
Weaker Sections at Affordable Prices
Effective Market Intervention to Keep the
Prices under Check
Adding to the Overall Food Security of the
Country

SN Panigrahi 88
FCI, the nodal central agency of Government of India, along with other State
Agencies undertakes procurement of wheat and paddy under price support
scheme.
Coarse grains are procured by State Government Agencies for Central Pool as
per the direction issued by Government of India on time to time.
The procurement under Price Support is taken up mainly to ensure remunerative
prices to the farmers for their produce which works as an incentive for achieving
better production.
Before the harvest during each Rabi / Kharif Crop season, the Government of
India announces the minimum support prices (MSP) for procurement on the
basis of the recommendation of the Commission of Agricultural Costs and Prices
(CACP) which along with other factors, takes into consideration the cost of
various agricultural inputs and the reasonable margin for the farmers for their
produce.

89
Wheat and Paddy/
Rice
Coarse Grains
jowar, bajra, ragi & maize
FCI & State Agencies State Agencies
Procurement under Price Support
To Ensure Remunerative Prices to the Farmers
Minimum Support Prices (MSP)
Before the harvest during each Rabi / Kharif Crop season, the Government of India
announces MSP
Factors for Determination of MSP
Cost of various Agricultural
Inputs
Reasonable Margin for the
Farmers

90
Procurement Operations
are Seasonal
Kharif Marketing Season
(KMS)
Rabi Marketing Season
(RMS)
kharif cropping season is from
July – October during the south-west
monsoon
Rabi cropping season is from
October- March (winter)
Starts from 1st October and lasts
upto 30 September next year
starts from 1 April and lasts upto
31 March next year.
Procurement Procurement
Paddy/ Rice and coarse grains
like jowar, bajra, ragi & maize
Wheat and sometimes barley

91
Advance Arrangements
for Procurement
Before the
start of every
marketing
season
Department of Food and
Public
Distribution convenes a
meeting of State Food
Secretaries
Issues like procurement centres to be opened
by Food Corporation of India (FCI) /State
Agencies, arrangement of storage space,
evacuation plan for food grains and arrangement
of packaging material are discussed
Based on the estimates given by the State Food Secretaries, the targets
of total procurement for the Central Pool
are worked out in the meeting
Procurement by
FCI, State Government
Agencies (SGAs) and Private
Parties
Specifications & Quality
Govt. of India announces uniform
specification for quality of wheat,
paddy, rice and coarse grains.
Procurement @ MSP
If the farmers get prices better
than the support price from other
buyers such as traders / millers
etc., the farmers are free to sell
their produce to them.

92
Allocation, Off-take of Food Grains and Central Issue Prices
Allocation & Distribution
Carried out by the State
Governments
through Targeted Public
Distribution Scheme (TPDS)
Carried out by the State
Governments
Other Welfare Schemes
(OWS)
Disposed off by FCI and State
Governments
Sale under Open Market Sales
Scheme (OMSS)
For Distribution to
Below Poverty Line (BPL),
Antyodaya Anna Yojana (AAY)
and Above Poverty Line (APL)
Food grains from the Central
Pool are issued to States at
Central Issue Price (CIP) for
distribution under TPDS
At Predetermined Prices in the
Open Market
Also allocated to State
Governments for retail sale
through non-PDS Channels
under OMSS

93
Movement of Food
Grains
FCI undertakes transportation of food grain (wheat and rice) from surplus States to the
deficit States and also within the States.
From Procuring Areas to Consuming Areas
Modes of Transport
By Rail
About 90% of all India
movement is undertaken by
railways
By Road
By Riverine
(Waterways)
All India Movement Plan is prepared on monthly basis at FCI headquarters keeping in view the
quantity available in surplus States, quantity required by consuming States, likely procurement in
procuring States, vacant storage capacity both in consuming and procuring States, and monthly
allocation/off-take.
An online tracking system for movement of foodgrains and depot management was launched in March
2016.The system would provide various types of data regarding stock position, movement, quality and
quantity on line.

SN Panigrahi 94
To facilitate procurement of food grains, FCI and various State Agencies in consultation with the State
Government establish a large number of purchase centers at various mandis and key points. The number of
centers and their locations are decided by the State Governments, based on various parameters, so as to
maximize the MSP operations. For instance for Wheat procurement 15,193 procurement centers were operated
during Rabi Marketing Season (RMS) 2019-20 & for Paddy procurement more than 51,000 procurement centers
are operating in KMS 2018-19. Such extensive & effective price support operations have resulted in sustaining
the income of farmers over a period and in providing the required impetus for higher investment in agriculture
sector for improved productivity.
Whatever stocks which are brought to the Purchase centers falling within the Government of India’s
specifications are purchased at the fixed support price. If the farmers get prices better than the support price
from other buyers such as traders / millers etc., the farmers are free to sell their produce to them. FCI and the
State Government/its agencies ensure that the farmers are not compelled to sell their produce below support
price.

SN Panigrahi 98
Primary Activities
Primary activities relate directly to the physical creation, sale, maintenance and
support of a product or service. They consist of the following:
•Inbound logistics – These are all the processes related to receiving, storing,
and distributing inputs internally. Your supplier relationships are a key factor in
creating value here.
•Operations – These are the transformation activities that change inputs into
outputs that are sold to customers. Here, your operational systems create value.
•Outbound logistics – These activities deliver your product or service to your
customer. These are things like collection, storage, and distribution systems, and
they may be internal or external to your organization.
•Marketing and sales – These are the processes you use to persuade clients to
purchase from you instead of your competitors. The benefits you offer, and how
well you communicate them, are sources of value here.
•Service – These are the activities related to maintaining the value of your
product or service to your customers, once it's been purchased.

SN Panigrahi 99
Support Activities
These activities support the primary functions above. In our diagram, the dotted lines show that each
support, or secondary, activity can play a role in each primary activity. For example, procurement
supports operations with certain activities, but it also supports marketing and sales with other
activities.
•Procurement (purchasing) – This is what the organization does to get the resources it needs to
operate. This includes finding vendors and negotiating best prices.
•Human resource management – This is how well a company recruits, hires, trains, motivates,
rewards, and retains its workers. People are a significant source of value, so businesses can create a
clear advantage with good HR practices.
•Technological development – These activities relate to managing and processing information, as
well as protecting a company's knowledge base. Minimizing information technology costs, staying
current with technological advances, and maintaining technical excellence are sources of value
creation.
•Infrastructure – These are a company's support systems, and the functions that allow it to maintain
daily operations. Accounting, legal, administrative, and general management are examples of
necessary infrastructure that businesses can use to their advantage.
Companies use these primary and support activities as "building blocks" to create a valuable product
or service.

100
Crop Sector (61.31%)
(field crops, plantation
crops, horticultural
crops, drugs and
narcotics crops
amongst others)
Livestock (26.80%)
(production of milk,
meat, eggs, wool,
dung, etc.)
Fisheries (4.50%)
(Aqua-Culture)
Forestry (7.39%)
(Value of Production (VoP))

101
Pre-
Production
Harvest
Production
Post-
Production
Industrial
Processing
Consumption
Agro Inputs
Tillage
Operations
Harvest
Physical
Transformation
Preliminary
Processing
Grading
Cleaning
Blending
Direct Sales
Market
Manufacturer
Food&Product
Preservation
Food&Product
Packaging
Transport & Logistics
Value Addition At Each StageValue Value

SN Panigrahi 104
Marketing Agricultural Products and Services

The 4 P’s of Marketing explained
Product Promotion Place Price
1. Is there a demand for
the product or
service?
2. How to make the
product appeal to
consumer
3. Packaging—includes
the design, color,
size, and brand
names
1. Making customers
aware of a product
2. Advertising
3. Coupons
4. Rebates
5. Sales
6. Free give aways
7. Publicity
1. Distribution is getting
the right product to
the right place at the
right time in the right
amount and in the
right condition
2. Storage
3. Warehousing
4. Transporting
1. How much are
customers willing to
pay?
2. Is the price
competitive with other
products?
3. Can the company
make a profit?

SN Panigrahi 109
Agro Processing Cluster Development

113
Aim of the Scheme
The scheme aims at
development of modern
infrastructure and common
facilities to encourage group
of entrepreneurs to set up
food processing units based
on cluster approach by
linking groups of producers/
farmers to the processors and
markets through well-equipped
supply chain with modern
infrastructure.
Infrastructure
Each agro processing clusters
under the scheme have two
basic components i.e.
Basic Enabling Infrastructure
(site development, development of
industrial plots, boundary wall, roads,
drainage, water supply, ETP, Electricity
Supply including Power Backup, Parking
Bay, Weigh Bridges, Common Office
Space etc.),
Core Infrastructure /
Common Facilities (food testing
laboratory, cleaning, grading, sorting and
packing facilities, steam generation
boilers, dry warehouse, cold storage, pre-
cooling chambers, ripening chambers,
IQF, specialized packaging, other
common processing facilities, etc.)
Investment
At least 5 food processing units
with a minimum investment
of Rs. 25 crore.
The units are set up
simultaneous along with
creation of common
infrastructure.
At least 10 acres of land is
required to be arranged either
by purchase or on lease for at
least 50 years for setting up of
Agro Processing Cluster.

114
PEA
Agro processing clusters set
up by Project Execution
Agency (PEA)/ Organisation
such as
Govt./ PSUs / Joint Ventures/
NGOs / Cooperatives / SHGs /
FPOs / Private Sector /
individuals etc. and are eligible
for Financial Assistance
subject to terms and conditions
under the scheme guidelines.
Responsibility of PEA
The Project Execution Agency
(PEA) which is responsible for
overall implementation of the
projects undertakes various
activities including formulation
of the Detailed Project Report
(DPR), Procurement /
Purchase of Land, arranging
Finance, Creating
Infrastructure, ensuring
External Infrastructure
Linkages for the Project etc.
Selling & Leasing of
Plots
PEA may sell / lease plots in
agro-processing cluster to
other food processing units but
the common facilities in the
cluster cannot be sold or
leased out.

115
Pattern of Assistance
The Scheme envisages grants-in-aid
@ 35% of eligible project cost in general areas
and
@50% of eligible project cost in the North East
States including Sikkim and difficult areas
namely Himalayan States (i.e. Himachal
Pradesh, Jammu & Kashmir and Uttarakhand),
State notified ITDP areas & Islands subject to
max. of Rs. 10.00 crore per project.
The grants-in-aid is credit linked but not back-
ended.
Release of Grant
First installment of 35% of the total approved
grant is released to the PEA after incurring an
expenditure of 35% of the bank term loan and
35% promoters contribution / equity;
Second installment of 40% of the total
approved grant is released after incurring an
expenditure of 75% of the bank term loan and
75% of promoters’ contribution / equity;
Third & final installment of 25% of the
approved is on completion of the project and
submission of requisite documents.

SN Panigrahi 116
In the interest of expeditious implementation of the projects, the Ministry
may engage Program Management Agency (PMA) to assist MoFPI for
implementation of the scheme.
The PMA will be a reputed institution with extensive experience in project
development, management, financing and implementation of
infrastructure projects of similar nature.
The expenses of PMAs, promotional activities, office and travel expenses
will be met from the allocation of the grant-in-aid for the scheme.

117
Expression of Interest
Proposals for seeking assistance under the scheme are invited through Expression of Interest
from time to time. In response to the notice inviting Expression of Interest (EoI) by Ministry for
selection of Projects, a proposal for the proposed agro-processing cluster will be submitted by
the applicant in the prescribed application format (Annexure-II) including the
information/documents to be covered in the EoIs (Annexure-III) along with Prescribed
information / documents
Approval of the Project
Technical Committee (TC) headed by the Special / Additional / Joint Secretary (MoFPI) would
scrutinize the proposals and submit its recommendations to the Inter-Ministerial Approval
Committee (IMAC)
Time Schedule
The time schedule for completion and operationalisation of project will be 20 months from the
date of approval for general areas and 24 months for North East States including Sikkim and
difficult areas namely Himalayan States (i.e. Himachal Pradesh, Jammu & Kashmir and
Uttarakhand), State notified ITDP areas & Islands, unless extended by IMAC for the reasons to
be recorded.

SN Panigrahi 118
Revised Operational Guidelines for the Scheme for
Creation of Infrastructure for Agro Processing Clusters
F. No. Z-14/13/2018-APC; Dated: 05.08.2019
View @ Below Link
http://mofpi.nic.in/sites/default/files/revised_operational
_guideline_of_apc_scheme_05082019-_0.pdf

SN Panigrahi 119
To view Indicative list of identified Agri-Horti production clusters
(fruits & vegetables)
(Click Here)
http://mofpi.nic.in/sites/default/files/indicative_list_of_identified_
agri-horti_production_clusters_fruits_vegetables_0_0.pdf
visit Geo-Sampada on Spread & Depth of Agri-Resources
(Click Here)
http://geo-sampada.nic.in/

122
• Technology Enabled,
Faster & Efficient
Operations – Visible &
Traceable
• Continuous
Optimization
• Specialized Services
with Consistency &
Reliability
• Larger Capacity &
Capability – Scalability
& Flexibility
• Low but Flexible
Costing
• Time Savings – Faster
Deliveries
• Strategic &
Tactical relationships,
Transactional
Relationships
• Broader Networking
Long-Term
Relations
Cost &
Time
Efficiency of
Services
Operational
Efficiency
Specializati
on
(Service or
Industry
Expertize)

SN Panigrahi 123
TCS’ mKRISHI platform offers personalized advisory
services to farmers, via mobile phones (SMS and IVR),
enabling them to access important information on
pesticides, fertilizers, soil and water conservation, and
improving access to markets for them.

SN Panigrahi 124
LEAF which raised funding from Aspada recently, is another player which
works with small holder vegetable farmers in South India. LEAF provides
integrated cold chain logistics comprising post harvest transport, cold storage,
processing, and supply through refri-trucks to the distribution center and retail
store.
Apart from this, LEAF is also involved in contract farming and agro processing,
working on improving income realizations for small farmers through yield
improvements, productivity increases, and consistent produce pricing.

SN Panigrahi 125
Star Agri provide integrated post harvest management solutions Apart from
providing warehousing services, Star Agri, which recently raised funding from
IDFC PE, provides collateral management and other value added services
(quality testing, agri insurance, bulk procurement and rural retailing) to its
clients.

126
On-Farm Practices
Storage, Packaging & Cold Chain
Transportation
Processing
Retail
Consumer
Six Critical Stages for Reducing the Food Loss and Waste (FLW) In India
According to the
FAO estimates
nearly 40% of the
food produced in
India is lost or
wasted.
Food Corporation of India,
report a share of losses
ranging from 10 to 15 percent
of the total production.
The Ministry of
Food Processing
Industries (MFPI)
estimate
Losses of 23 million tons of
grains, 12 million tons of
fruits and 21 million tons of
vegetables for a total
approximate value of about
4.4 billion USD while total
value of food loss and waste
generated is supposedly 10.6
billion USD.
Food Loss and
Waste (FLW) In
India
Report : National Academy of Agricultural Sciences

SN Panigrahi 127
According to the FAO estimates1 nearly 40% of the food produced in India is lost or wasted.
Other sources, such as the Food Corporation of India, report a share of losses ranging from 10 to 15
percent of the total production.
The Ministry of Food Processing Industries (MFPI) estimate losses of 23 million tons of grains, 12 million
tons of fruits and 21 million tons of vegetables for a total approximate value of about 4.4 billion USD while
total value of food loss and waste generated is supposedly 10.6 billion USD .
Food loss and waste (FLW) is not unique for India, as the FAO studies have shown yearly global FLW is
nearly 30% of cereals, 40 to 50 % of horticultural crops, 20 % of oilseeds, meat and dairy products, and
35 % of fish.

SN Panigrahi 128
Having almost 141 million hectares under agriculture (second largest globally), India’s concerns today, are
about empowering farmers with greater market connectivity to achieve greater value realisation.
Producing food in sufficient quantity is no longer the immediate concern; instead now, apprehensions
relate more to minimising post-harvest losses, securing of easy and affordable access to the food and in
improving resource use and input management.
The general distribution related constraints seen in the supply chain of fresh produce
are (i) lack of timely delivery (ii) lack of uniform grading of harvested produce (iii)
improper packaging (iv) poor quality of produce (v) poor market infrastructure (vi)
improper pricing (vii) lack of standardised weights and measures. Besides these
constraints, there is a poor dissemination of market information resulting in lowered
productivity (Surendra et.al, 2009).

SN Panigrahi 129
Retail Supply Chain Management
Click

SN Panigrahi 130
 Food Retailing and Food supply chain
Food Distribution
Distribution is a critically important part of your business strategy and must be seen as central to success.
Distribution covers both the physical movement of goods and the establishing of intermediary relationships
to support such product movement.
Successful distribution is intrinsically linked to the level of a company’s sales. It must be part of an
integrated and well-managed supply chain.

131
Food Supply Chain Ecosystem

SN Panigrahi 132
Food Supply chains are highly
complex interacting networks
linking millions of small players
such as Farmers, Kirana Shops,
Hawkers, Industries, Governments
and other organizations affecting
the Political and Economic Climate
Food Supply
Chain
Complex
Interacting
Network
Farmers
Kirana Shops
Hawkers
Food
Processing &
Packaging
Industry
Regulating &
Promoting
Institutions
Socio-Polical –
Economic &
Environment
We should recognize
 The complexity of social, political
and operational issues
 The domain knowledge to be
acquired
 The analytics needed to build
excellence in Strategy and
Execution and mitigate the Risks
 The appropriate Governance
Structure needed to fulfill
the promised deliveries
Food Supply Chains are Complex Systems

SN Panigrahi 133
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.

134
Supply and Demand in Retail Supply Chain
Food Processing Industries
Retail Chains
Kirana Shops
Consumers
Farmers,
Mandi Operators
SMEs,
And other Rural Industries
Inconsistent Policies Poor
Governance Improper
Transport facilities Too
many intermediaries
Bridge
Inefficiencies
Demand
Side
Supply
Side
 106 M small farmers
 400 M agri workers
 12 M Kirana shops
 1.5 Million Hawkers
 Too many intermediaries
 Manual handling
 Improper packaging
 Standards for Hygiene
 Not demand driven: No
contract farming
 Subsidized pricing
 Public distribution inefficient
 Reach to customers is
difficult
Supply Chain
Inefficiencies

SN Panigrahi 135
Retail Supply Chain : Example- Reliance Fresh Customers
Reliance
Fresh
Collection
Units /
Centers
Packing
Units
Processing
Units
Distribution
Centers
Other Input
Suppliers
Farmers
Farmers
Farmers
Supply Side Demand Side

SN Panigrahi 136
https://www.youtube.com/watch?v=336YkwayCD4
Alibaba's "New Retail" Explained
https://www.youtube.com/watch?v=FUEkRppFpJc
Innovation in the retail industry

SN Panigrahi 137
Food Manufacturing
 Only a small percentage of fresh produce or meat
are processed.
 Post harvest research and food product testing are
at a very nascent stage
 Negatives on Food manufacturing in India
 Food Packaging is expensive
 High import duties on Processing and Packaging
machinery
 High sales tax on packaged foods.
 High protein food not available

SN Panigrahi 138
Improving Agriculture on
India’s Rain-fed Lands
https://www.youtube.com/watch?v=fRgfmaQ06ZE
Click

SN Panigrahi 139
The Future of Farming & Agriculture
https://www.youtube.com/watch?v=Qmla9NLFBvU
Amazing Agriculture Machine - Technology Harvesting
https://www.youtube.com/watch?v=ETsguTDe17Y
PADDY PANTHER – 26 is wonderful machine for Paddy Cultivation
https://www.youtube.com/watch?v=bs3snp-7x-c

SN Panigrahi 140
What is CONTRACT MANAGEMENT? What does
CONTRACT MANAGEMENT mean?
https://www.youtube.com/watch?v=SQtE_Fx-6sQ
PMP Exam CONTRACT Types
SIMPLIFIED - FP, CR, T&M
https://www.youtube.com/watch?v=BsIJJs0X_7k

SN Panigrahi 141
Contract Farming
Linking Small Farmers to Global Markets: Role of
Contracting Farming

SN Panigrahi
142
AGREEMENT
(meeting of the minds )
+
=
ENFORCEABLE BY LAW
COMPETENT TO CONCTRACT
FREE CONSENT
LAWFUL OBJECT
LAWFUL CONSIDERATION
NOT VOID
PROMISOR /
OFFEROR /
SELLER
PROMISEE /
OFFEREE /
BUYER
PROMISE / OFFER
ACCEPTANCE
LEGAL OBLIGATIONS
L
E
G
A
L
R
E
L
A
TI
O
N
S
HI
P
L
E
G
A
L
R
E
L
A
TI
O
N
S
HI
P
CONTRACT

SN Panigrahi 143
Contract farming can be defined as agricultural production
carried out according to an agreement between a buyer and
farmers, which establishes conditions for the production and
marketing of a farm product or products.
Typically, the farmer agrees to provide agreed quantities of a
specific agricultural product. These should meet the quality
standards of the purchaser and be supplied at the time determined
by the purchaser.
In turn, the buyer commits to purchase the product and, in some
cases, to support production through, for example, the supply of
farm inputs, land preparation and the provision of technical advice.
What is Contract Farming

SN Panigrahi 144
An Agreement between farmers and processing
and/or marketing firms for the production and
supply of agricultural products under forward
agreements, frequently at predetermined prices
FAO; Contract Farming: Partnerships for Growth; 2001
Definition of Contract Farming

SN Panigrahi 145
Market
Provision
Resource
Provision
Management
Specifications

SN Panigrahi 146
• The Centralized Model. The sponsor purchases crops from farmers
for processing, and markets the product. Quotas are distributed at
the beginning of each growing season and quality is tightly
controlled.
• Generally associated with tobacco, cotton, sugar cane, bananas,
coffee, tea, cocoa and rubber. Can also cover poultry, pork, dairy,
fresh vegetables and fruits.
Examples: sugarcane production in Thailand, tomato processing in
Punjab, India, vegetable canning in the Philippines. The extent of the
sponsor’s involvement varies

SN Panigrahi 147
• Nucleus estate model. The sponsor owns and manages a
plantation, usually close to a processing plant, and introduces
technology and management techniques to farmers (sometimes
called "satellite" growers).
• Mainly used for tree crops, but has also been applied to dairy
production.
Examples: Oil palm (in resettlement areas) and dairy in Indonesia,
tea estates in India, Nepal and Sri Lanka.

SN Panigrahi 148
• Multipartite Model. Usually involves statutory bodies and private
companies jointly participating with farmers. Usually, contract
commitment to provide material and management inputs to farmers.
Example: common in China, where government departments,
township committees and foreign companies have jointly entered
into contracts with villages and individual farmers.

SN Panigrahi 149
• Informal model. Individual entrepreneurs or small companies make
simple, informal production contracts with farmers on a seasonal
basis, particularly for fresh vegetables and tropical fruits.
Supermarkets frequently purchase fresh produce through individual
developers. Normally, minimal processing and few inputs to farmers;
availability of govt. support services crucial.
Examples: Gherkins production in Sri Lanka; bananas, squash and
papaya production for export in the South Pacific and
chrysanthemums and fresh vegetable production in northern
provinces of Thailand.

SN Panigrahi 150
• Intermediary Model. Formal subcontracting of crop production to
intermediaries is common in Southeast Asia. Large food processing
companies purchase crops from individual "collectors" or farmer
committees, who make their own informal arrangements with
farmers. The risk is that the sponsor loses control over production
and over prices paid to farmers by middlemen.
Examples: Soybean, green beans and baby corn production in
Northern Thailand; in Indonesia, this practice is widespread and
termed plasma.

SN Panigrahi 151
Contract farming is looking towards the benefits both for the farm-producers as well as to the agro-processing
firms.
Producer/farmer
 Makes small scale farming competitive - small farmers can access technology, credit,
marketing channels and information while lowering transaction costs
 Assured market for their produce at their doorsteps, reducing marketing and transaction costs
 It reduces the risk of production, price and marketing costs.
 Contract farming can open up new markets which would otherwise be unavailable to small
farmers.
 It also ensures higher production of better quality, financial support in cash and /or kind and
technical guidance to the farmers.
 In case of agri-processing level, it ensures consistent supply of agricultural produce with
quality, at right time and lesser cost.
Agri-based firms
 Optimally utilize their installed capacity, infrastructure and manpower, and respond to food
safety and quality concerns of the consumers.
 Make direct private investment in agricultural activities.
 The price fixation is done by the negotiation between the producers and firms.
 The farmers enter into contract production with an assured price under term and conditions.

SN Panigrahi 152
 Contract farming arrangements are often criticized for being biased in favor of firms
or large farmers, while exploiting the poor bargaining power of small farmers.
 Problems faced by growers like undue quality cut on produce by firms, delayed
deliveries at the factory, delayed payments, low price and pest attack on the contract
crop which raised the cost of production.
 Contracting agreements are often verbal or informal in nature, and even written
contracts often do not provide the legal protection in India that may be observed in
other countries . Lack of enforceability of contractual provisions can result in breach
of contracts by either party.
 Single Buyer – Multiple Sellers (Monopsony) .
 Adverse gender effects - Women have less access to contract farming than men.

SN Panigrahi 153
NABARD developed a special refinance package for contract farming arrangements (within and
outside AEZs) aimed at promoting increased production of commercial crops and creation of marketing
avenues for the farmers. The various initiatives undertaken by NABARD in this direction are:
 Financial Interventions
 Special Refinance package for financing farmers for contract farming in AEZs
 100% refinance to disbursements made by CBs, SCBs, RRBs and select SCARDBs
(having net NPA less than 5%)
 Term facility for repayments (3 years)
 Fixation of higher scale of finance for crops under contract farming.
 Extension of refinance scheme for financing farmers for contract farming in AEZs to
contract farming outside AEZs besides coverage of medicinal and aromatic plants.
 Extension of Refinance scheme for contract farming under Automatic Refinance Facility.

154
Government of India is giving more priority for welfare of the
farmers. In this regard it is implementing several farmers welfare
schemes to revitalize agriculture sector and to improve their
economic conditions. Therefore, the government has rolled out
new initiatives, schemes, programs and plans to benefit all the
farmers.

155
1.Soil Health Card Scheme
Launched in 2015, the scheme has been introduced to assist
State Governments to issue Soil Health Cards to all farmers in
the country. The Soil Health Cards provide information to farmers
on nutrient status of their soil along with recommendation on
appropriate dosage of nutrients to be applied for improving soil
health and its fertility.

156
2. National Mission for Sustainable Agriculture (NMSA)
NMSA is one of the eight Missions under National Action Plan on Climate Change (NAPCC). It aims at
promoting Sustainable Agriculture through climate change adaptation measures, enhancing agriculture
productivity especially in rainfed areas focusing on integrated farming, soil health management, and
synergizing resource conservation.
NMSA as a programmatic intervention caters to Mission Deliverables that focuses mainly on conservation
agriculture to make farm sector more productive, sustainable, remunerative and climate resilient by
promoting location specific integrated/composite farming systems.
Schemes under NMSA
•Rainfed Area Development (RAD): RAD is being implemented by RFS Division.
•Soil Health Management (SHM): SHM is being implemented by INM Division
•Sub Mission on Agro Forestry (SMAF): SMAF is being implemented by NRM Division
•Paramparagat Krishi Vikas Yojana (PKVY): PKVY is being implemented by INM Division
•Soil and Land Use Survey of India (SLUSI): Being implemented by RFS Division
•National Rainfed Area Authority (NRAA): Being implemented by RFS Division
•Mission Organic Value Chain Development in North Eastern Region (MOVCDNER): Being implemented by
INM Division
•National Centre of Organic Farming (NCOF): Being implemented by INM Division
•Central Fertilizer Quality Control and Training Institute (CFQC&TI): implemented by INM Division

157
3. Neem Coated Urea (NCU)
This scheme is initiated to regulate use of urea, enhance availability
of nitrogen to the crop and reduce cost of fertilizer application. NCU
slows down the release of fertilizer and makes it available to the
crop in an effective manner. The entire quantity of domestically
manufactured and imported urea is now neem coated. It
reduces the cost of cultivation and improves soil health
management.

158
4. Pradhan Mantri Krishi Sinchai Yojana (PMKSY)
It was launched on 1st July, 2015 with the motto of ‘Har Khet Ko Paani’ for providing end-to end
solutions in irrigation supply chain, viz. water sources, distribution network and farm level
applications.
PMKSY not only focuses on creating sources for assured irrigation, but also creating protective
irrigation by harnessing rain water at micro level through ‘Jal Sanchay’ and ‘Jal Sinchan’.
Micro irrigation is to be popularised to ensure ‘Per drop-More crop’. PMKSY adopts State level
planning and projectised execution that allows States to draw up their own irrigation development
based on District Irrigation Plans and State Irrigation Plans.
Components:
 Accelerated Irrigation Benefit Programme(AIBP): implemented by Ministry of Water
Resources, RD & GR.
 PMKSY (Har Khet ko Pani): implemented by Ministry of Water Resources, RD & GR
 PMKSY (Watershed): implemented by Department of Land Resources.
 PMKSY(Per Drop More Crop - PDMC)

159
5. Paramparagat Krishi Vikas Yojana (PKVY)
It is implemented with a view to promote organic farming in the country. To
improve soil health and organic matter content and increase net income of the
farmer so as to realise premium prices. Under this scheme, an area of 5 lakh acre
is targeted to be covered though 10,000 clusters of 50 acre each, from the year
2015-16 to 2017-18.
6. National Agriculture Market (e-NAM)
It provides e-marketing platform at national level and support creation of
infrastructure to enable e-marketing.
This innovative market process is revolutionizing agriculture markets by ensuring
better price discovery. It brings in transparency and competition to enable farmers
to get improved remuneration for their produce moving towards ‘One Nation One
Market’.

160
7. Micro Irrigation Fund (MIF)
A dedicated MIF created with NABARD has been approved with an initial corpus
of Rs. 5000 crore (Rs. 2000 crore for 2018-19 & Rs. 3000 crore for 2019-20) for
encouraging public and private investments in Micro irrigation.
The main objective of the fund is to facilitate the States in mobilizing the
resources for expanding coverage of Micro Irrigation.
MIF would not only facilitate States in incentivizing and mobilizing resources for
achieving the target envisaged under PMKSY-PDMC but also in bringing
additional coverage through special and innovative initiatives by State
Governments.
An Advisory Committee has been set up to provide policy direction and ensure
effective planning, coordination and monitoring of the Micro Irrigation Fund.

161
8. Agriculture Contingency Plan
Central Research Institute for Dryland Agriculture (CRIDA), ICAR has prepared
district level Agriculture Contingency Plans in collaboration with state
agricultural universities using a standard template to tackle aberrant monsoon
situations leading to drought and floods, extreme events (heat waves, cold
waves, frost, hailstorms, cyclone) adversely affecting crops, livestock and
fisheries (including horticulture).
Total 614 district agriculture contingency plans are placed in the ‘farmer portal’
of the Ministry of Agriculture and Farmers Welfare, Government of India
(http://www.farmer.gov.in) and also in the ICAR / CRIDA website
(http://www.crida.in) for downloading the full plan by stakeholders for
operational use.

162
9. Rainfed Area Development Programme (RADP)
Rainfed Area Development Programme (RADP) was implemented as a sub-scheme
under Rashtriya Krishi Vikas Yojana (RKVY).
Aim
To improve quality of life of farmers’ especially, small and marginal farmers by offering a
complete package of activities to maximize farm returns.
Increasing agricultural productivity of rainfed areas in a sustainable manner by adopting
appropriate farming system based approaches.
To minimise the adverse impact of possible crop failure due to drought, flood or un-even
rainfall distribution through diversified and composite farming system.
Restoration of confidence in rainfed agriculture by creating sustained employment
opportunities through improved on-farm technologies and cultivation practices
Enhancement of farmer’s income and livelihood support for reduction of poverty
in rainfed areas and

163
10. National Watershed Development Project for Rainfed Areas (NWDPRA)
The scheme of National Watershed Development Project for Rainfed Areas
(NWDPRA) was launched in 1990-91 based on twin concepts of integrated
watershed management and sustainable farming systems.
Aim
 Conservation, development and sustainable management of natural
resources.
 Enhancement of agricultural production and productivity in a sustainable
manner.
 Restoration of ecological balance in the degraded and fragile rainfed eco-
systems by greening these areas through appropriate mix of trees, shrubs
and grasses.
 Reduction in regional disparity between irrigated and rainfed areas and;
 Creation of sustained employment opportunities for the rural community
including the landless.

164
11. Pradhan Mantri Fasal Bima Yojana (PMFBY)
PMFBY is an actuarial premium based scheme under which farmer
has to pay maximum premium of 2% for Kharif, 1.5% for Rabi food &
oilseed crops and 5% for annual commercial/horticultural crops and
remaining part of the actuarial/bidded premium is shared equally by
the Centre and State Government.
One of the objectives of the scheme is to facilitate prompt claims
settlement. The claims must be settled within two months of harvest
subject to timely provision of both yield data and share of premium
subsidy by the State Government.

165
12. Livestock insurance Scheme
It aims to provide protection mechanism to the farmers and cattle rearers against
any eventual loss of animals due to death. The scheme also demonstrates the
benefit of the insurance of livestock to the people and popularizes it with the
ultimate goal of attaining qualitative improvement in livestock and their products.
13. National Scheme on Welfare of Fishermen
This scheme was launched to provide financial assistance to fishers for
construction of house, community hall for recreation and common working
place. It also aims to install tube-wells for drinking water and assistance during
lean period through saving cum relief component.

166
14. Scheme on Fisheries Training and Extension
It was launched to provide training for fishery sector so as to assist in
undertaking fisheries extension programmes effectively.
15. Gramin Bhandaran Yojna
Objective of this Scheme:
 Create scientific storage capacity with allied facilities in rural areas.
 To meet the requirements of farmers for storing farm produce, processed farm
produce and agricultural inputs.
 Promotion of grading, standardization and quality control of agricultural
produce to improve their marketability.
 Prevent distress sale immediately after harvest by providing the facility of
pledge financing and marketing credit by strengthening agricultural marketing
infrastructure in the country.

167
Pradhan Mantri Annadata Aay SanraksHan Abhiyan
The Government has taken another giant leap towards boosting pro-farmer initiatives. With the recent approval
of the umbrella scheme Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA), that is aimed
towards ensuring remunerative prices to farmers for their produce, the government has taken an unprecedented
step.
The recent scheme is expected to complement the increase in MSP which will be translated to farmer's income
by way of robust procurement mechanism in coordination with the states.
Giving a major boost to the pro-farmer initiatives of the Government and in keeping with Government's
commitment and dedication for Annadata. It will help to protect farmers' income which is expected to go long
way towards the welfare of farmers.
Government has already increased the MSP of Kharif crops by following the principle of 1.5 times the
cost of production. It is expected that the increase in MSP will be translated to farmer's income by way of
robust procurement mechanism in coordination with the State Governments.
COMPONENTS
The three components outlined under the scheme is thus aimed towards enhancing agricultural productivity,
reducing cost of cultivation which will enable boosting and securing farmer’s income in the long run.
 Price Support Scheme (PSS)
 Price Deficiency Payment Scheme (PDPS)
 Pilot of Private Procurement & Stockist Scheme (PPPS)

168
Agriculture Export Policy, 2018
The Government has come out with a policy to double farmers’ income by 2022. Exports of agricultural
products would play a pivotal role in achieving this goal. In order to provide an impetus to agricultural
exports, the Government has come out with a comprehensive “Agriculture Export Policy” aimed at doubling
the agricultural exports and integrating Indian farmers and agricultural products with the global value chains.
The Agriculture Export Policy has the following vision:
“Harness export potential of Indian agriculture, through suitable policy instruments, to make India
global power in agriculture and raise farmers’ income.”
Objectives:
Objectives of the Agriculture Export Policy are as under:
 To double agricultural exports from present ~US$ 30+ Billion to ~US$ 60+ Billion by 2022 and
reach US$ 100 Billion in the next few years thereafter, with a stable trade policy regime.
 To diversify our export basket, destinations and boost high value and value added
agricultural exports including focus on perishables.
 To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri products
exports.
 To provide an institutional mechanism for pursuing market access, tackling barriers and deal
with sanitary and phyto-sanitary issues.
 To strive to double India’s share in world agri exports by integrating with global value chain
at the earliest.
 Enable farmers to get benefit of export opportunities in overseas market.

169
“Modi”-Nomics : Vision to
Double Agricultural Exports
Agriculture Export Policy, 2018
For More details on Agriculture Export Policy, 2018
Pl. go through my Article in Taxguru with Title
@ following Link
https://taxguru.in/dgft/modi-nomics-vision-double-
agricultural-exports.html
Also View on YouTube @
https://www.youtube.com/watch?v=CYYVR1ViqDk&t=3s

170
Transport and Marketing Assistance (TMA)
As a part of implementation action plan of Agriculture Export Policy, 2018,
which the Union Cabinet chaired by Prime Minister Shri Narendra Modi has
approved in December 2018, with an aim to double the shipments to $60 billion
by 2022 and integrating Indian farmers and agricultural products to the global
value chain, the government now announced the scheme for
providing Financial Assistance for Transport and Marketing of Agriculture
Products to boost Exports of such commodities to certain countries in
Europe and North America.
To Know more about
Transport and Marketing Assistance (TMA)
View YouTube @
https://www.youtube.com/watch?v=sSp-H46rp0U&t=3s

171
AGRI-UDAAN
In order to fuel the growth of innovative ideas in the agriculture sector, the government has
launched the AGRI UDAAN – Food and Agribusiness Accelerator 2.0 for agri startups. AGRI
UDAAN will mentor startups and help them connect with potential investors.
As per an official statement, the AGRI UDAAN- Food and Agribusiness Accelerator 2.0, is run by
the Indian Council of Agricultural Research (ICAR). ICAR’s National Academy of Agricultural
Research Management (NAARM); Indian Institute of Management Ahmedabad (IIM-A) Incubator’s
Center for Innovation, Incubation and Entrepreneurship (CIIE) will look after the programme. Apart
from this, the National Science and Technology Entrepreneurship Development Board (NSTEDB)
and DST have also come forward to support the accelerator programme.
AGRI UDAAN is a six-month-programme in which shortlisted agri startups with innovative business
models will be mentored and guided to scale up their operations. shortlisted startups stand a
chance to get up to $40K (INR 25 Lakhs)funding assistance.
“The idea is to attract the youth from rural India and elsewhere, and train them so they can
add value to the farmers’ produce.”

172
AGRO AND FOOD PROCESSING CLUSTERS
Pradhan Mantri KisanSampada Yojana is a flagship programme of the Indian Government for boosting
investment in food processing. Rs 1313.08 crore has been allocated in the budget 2018-19. This scheme
is expected to benefit two million farmers and generate 530,500 direct and indirect jobs in the country by
2019-20.In 2016, the ministry had introduced an umbrella Scheme Called “Agro-Marine Processing
and Development of Agro-Processing Clusters” or SAMPADA, which was proposed to be
implemented with an allocation of Rs 6,000 crore for the period of 2016-20.
In September 2017, the ministry released a notice on renaming SAMPADA scheme. The schemes that
were to be implemented under SAMPADA will now come under “Pradhan Mantri Kisan SAMPADA
Yojana”.
Under SAMPADA, the general areas would get 50 per cent of the project cost as grant-in-aid and the hilly
and remote areas like the north-eastern region would receive 75 per cent of the project cost.
For More Details pl. Go through the YouTube @
https://www.youtube.com/watch?v=eW98QWDFSjY&t=3s

SN Panigrahi 173
Open Market Sale Scheme (Domestic)
The present form of OMSS comprises 3 schemes as under:
(i) Sale of wheat to bulk consumers/private traders through e-auction.
(ii) Sale of wheat to bulk consumers/private traders through e-auction
by dedicated movement.
(iii) Sale of Raw Rice Grade ‘A’ to bulk consumers / private traders
through e-auction.

SN Panigrahi 174
www.agricoop.nic.in Govt. Portal – Various Govt. Programs & Schemes for
Agriculaturehttps://farmer.gov.in
http://agriculture.gov.in/ Website of Ministry of Agriculture & Farmers Welfare
http://nhb.gov.in/ National Horticulture Board (NHB)
http://dahd.nic.in/ The Department of Animal Husbandry and Dairying
(AH&D)
https://dccd.gov.in/ The Directorate of Cashewnut & Cocoa Development
(DCCD)
http://www.ped.ap.gov.in/ Public Enterprises Department
(Govt. of AP)
http://krishiworld.com/ Best portal on Agricultural in India

176
For More on Export – Import & GST &
Other Related Topics Pl. Go through My
YouTube Presentations @ Below Link
https://www.youtube.com/channel/UCVZScN
a_leR8XbYINEwTFwQ/videos
Subscribe the my Youtube Channel for
Free
Also Don’t Forget to Circulate to your
Contacts to Spread Knowledge

Contact Details:
SN Panigrahi
9652571117
snpanigrahi1963@gmail.com 178

#Integrated Agriculture Supply Chain Management # By SN Panigrahi

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