Food Supply Chain Excellence INTEGRATED SUPPLY CHAIN NETWORKS

Food Supply Chain Excellence INTEGRATED SUPPLY CHAIN NETWORKS The Food Supply Chain In India Untapped Comparative Advantage N. Viswanadham Indian Institute of Science October 5, 2013 Workshop at IIT Kharagpur on Sustainable Food Security through Technological Interventions for Production, Processing and Logistics

Food Supply Chain Excellence A Revolution in the Making • • Break through Innovations are possible with booming employment opportunities. What is needed is out of the box thinking in terms of product offerings made to various customer segments with appropriate business models with Affordability, Availability and Awareness in mind . N. Viswanadham

Food Supply Chain Excellence The India Advantage l l l In India, 52% of land is cultivable & World average is 11% All 15 major climates of the World are in India – Snow bound Himalayas to hot humid southern peninsula, – Thar desert to heavy rain areas Has 20 agro-climatic regions & 46 out of 60 in soil types Sunshine hours and day length ideally suited for year round crop cultivation. Mega centre for biodiversity in plants, animals, insects, microorganism and accounts for 17% animal, 12% plants and 10% fish genetic resources of the globe. Live stock sector: India has 16% of cattle, 57% of buffalos, 17% of goats and 5 % of sheep population of the world.

Food Supply Chain Excellence The Plough-Plate Food Supply Chain • The supply chain involves farmers, seed producers, fertilizer factories, financial institutions, millers, government, warehouses, fair price shops, retail shops, railways, truck transport companies, etc. • The relationship among the actors is adhoc and not planned leading to inefficiencies

Institutions Packaging Duties High Delivery Services and mechanisms Trade Tariffs Protectionist Economic Policies Logistics Resources No Cold Chain Abundant FOOD SUPPLY CHAIN Information Technology Resources Management Inefficient and Fragmented Planning No Supply Chain Visibility Product Offering Few Processed Products/Labs Supply Chain Too many intermediaries Supply chains Resources & Management Food Supply Chain Excellence Benchmarking Food Chain

Food Supply Chain Excellence State of Indian Food Sector Weaknesses 1. Small scale conventional farming 1. Vast natural resources (cultivable 2. Primitive post-harvest methods land, water, seasons) 3. No channel master & many farmers 2. Established farming system to consumers intermediaries a 3. Growing economy e e. Food processing industry 4. m. Hardly tany h 4. Supporting government policies o r c o e 5. Inadequate storage & transport f (FDI, APEDA, subsidies) b r o e i )infrastructure 5. Vital outsourcing hub pl(logistic al t Strengths i p d t u n s l te od r Consequences Opportunities o o P fo le w 1. Cold chain infrastructure builders 1. Surplus food wasted away g o n i h d 2. Low incomes to a farmers w 2. Processed food manufacturers e l 3. Inefficient supply chain 3. Food packaging & logistics providers 4. Not meeting the young consumer preferences (processed hygienic food) 4. Food retailers and Exporters 5. IT and data analysts 6. Research Institutions N. Viswanadham

APMC, Min price, Essential Commodities, PDS, VAT Quality Control & Environmental Issues INSTITUTIONS Sensor networks & supply chain visibility FOOD SUPPLY CHAIN ECOSYSTEM RESOURCES Food Parks, APEDA, Freight Corridors Infrastructure: Canals, Roads, Research: University, Seeds, Testing, Dev, Labs DELIVERY SERVICE INFRASTRUCTURE Cold Chain Logistics Social (Kirana shops), Financial & Trade issues Sourcing Hubs, Food Courts, Clusters HR management Dealing with Kirana shops, Financials Water, Power , seeds FOOD SUPPLY CHAINS Retail Chains Mandis, Restaurants Distribution Packaging Food Manufacturing Suppliers Farmers, Fisheries, Meat, Dairy

PRESENT CONDITION OF TRADERS Fringe Benefit Tax VAT INEFFICIENT LABOURS ØLICENCES & PERMITS ØINDUSTRIAL DISPUTE ACT ØSHOP & ESTABLISHMENT ACT ØCOSUMER PROTECTION ACT ØWEIGHT & MEASUREMENT ACT ØPACKAGING ACT ØPREVENTION OF FOOD ADULTRATION ACT ØPREVENTION OF BLOCK MARKETING ACT ØANTI HOARDING & PROFEELING ACT ØMONEY LENDING ACT ØPRODEND FUND ACT ØMINIMUM WAGES ACT ØESI ACT ØGRATUITY ACT ØBONUS ACT ENTRY TAX SERVICE TAX FDI in Retail Trade ANTI SOCAL ELEMENTS OCTROI WATER TAX CENTRAL EXCISE POLITICIAL INTERFERANCE PURCHASE TAX POOR MARKET CONDITION INSPECTOR RAJ INCOME TAX SALES TAX POWER PROBLEM Cash Transaction Tax & Quarterly ‘C’ Form STAMP DUTY WELTH TAX HIGH BANK CHARGES PROFESSIONAL TAX New Naka Complex Presented By Mr. B. C. Bhartia, Nagpur. ESSENTIAL COMMODITIES ACT

Food Supply Chain Excellence What Is Food Security? The World Food Summit of 1996 defined food security as existing “when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life”. l Thus food security implies both physical and economic access to food that meets their dietary needs, nutritional requirements and food preferences. l Nutritious food providers have three functions: Making it Available at Affordable prices and creating Awareness to the consumers l

Food Supply Chain Excellence Food security: India ranks lower than Rwanda According to the International Food Policy Research Institute's Global Hunger Index, 2011, India ranks 67 of the 81 countries of the world with the worst food security status. l The GHI is composed of three equally weighted indicators - the proportion of the population that is undernourished, the proportion of children who are underweight and under-five child mortality. l N. Viswanadham

Food Supply Chain Excellence India needs to Usher the Agri. Service Revolution l. A strategic vision for the Agri-service sector l Streamline and upgrade the agri-service chains using modern technologies: Demand driven agriculture, Processing industry, Visibility l Initiate education, research and entrepreneurial programs in Agri-Service sector innovation l Plan and Build integrated Food -service systems in rural and urban areas N. Viswanadham 11

Food Supply Chain Excellence Specific Five things India Needs l Post Harvest Research l Food Manufacturing with Added Vitamins And Minerals l Distribute Nutritious Food not Grains l Attention to supply chain and logistics and minimize wastage l Regulations by the State and Centre Governments : APMC act, Minimum support price act, etc N. Viswanadham

Food Supply Chain Excellence New to Market Innovation Food Product Market Estimation l Estimate your market right How many people will buy orange juice packets if it is as cheap as a coffee or tea on a road side stall and costs only Rs 5 Look at the reduction in the disease burden 141106 N. Viswanadham

Food Supply Chain Excellence Food Security Solution: To Serve 100 M Urban Poor Vocational Training Processed Food Products Distribution Center Households PDS Distribution Center Mid Day Meals Meat & Diary Products Distribution Center Kitchen Hawkers Kitchen IT Backbone on Cloud C o n s u m e r s

Food Supply Chain Excellence The IIT Kharagpur Initiative l This initiative fills in the much needed research efforts in the supply chain, logistics and food security areas l The involvement of the IIT faculty and research students would make a much needed contribution to the food security in India and the world. N. Viswanadham