Agri Logistics is essential to optimise the operational and economic efficiency in the supply chain to bring connectivity, transparency, traceability and building safeguards against losses. The supply chain of agricultural products for transportation of agri products from farm to markets needs integration of infrastructure facilities, logistics and coordination amongst several players.

As the country has made rapid strides in foodgrain and horticulture production, there is greater need to enhance the storage capacity, well connected physical infrastructure, connectivity amongst the nodes, integration with information flows and a capability to connect to far off markets. The Governments initiatives like Kisan Rail, Kisan Rath, Kisan Udaan are benefiting farmers by bringing markets closer to the farms. The consumer preferences are changing and demanding variety of foods, accordingly these schemes need to be expanded and modernise the agricultural logistics infrastructure to support safety of the produce and fast-track the delivery to market.

Aggregation at farm gate

With the formation of Farmer Producer Organization (FPO), and the rise in the registration of Multipurpose Primary Agricultural Credit Societies (MPACS), an emerging model of collectivisation and aggregation of produce is being developed to achieve economies of scale. The post-harvest aggregation activities at farm-gate are the most important point in a supply chain where logistics have an important role to play. Aggregation of produce at farm gate requires Storage infrastructure to build capacity to aggregate, minimise handling loss and hold the value for better marketing prospects. The quality of the infrastructure available in rural areas as well as the number of connected nodes are decisive in having a seamless flow of produce and market information.

When it comes to location of the storage structures such godowns and warehouse, they are often near the market or inside the regulated markets. The locational advantage of these structures is pro traders and buyers as they have market information and thereby reap benefits by selling the produce quickly. However, when it comes to assessing the post-harvest losses in perishables and foodgrain the maximum losses take place at the farm or near the farm. The locational disadvantage of the missing infrastructure weighs heavy on the farmers.

Understanding the need for storage and connectivity near the farm gate, World’s Largest Grain Storage Plan in Cooperative Sector provides the much-needed interventions that will benefit the farmer, FPO and PACS.

World’s Largest Grain Storage Plan in Cooperative Sector-

With the recent advances made in agricultural Production, the total Food Grain Production in India is 332 MMT and total Storage Capacity in India is only 145 MMT. To augment the storage capacity World’s largest Grain storage plan has been launched by Ministry of Cooperation. The plan aims to enhance storage capacity by establishing various agricultural infrastructures at the PACS level. This includes the development of decentralised warehouses, custom hiring centers, processing units, and Fair Price Shops, achieved through the integration of multiple existing schemes from the Government of India (GoI). The States of UP, MP, Rajasthan, Gujarat, Maharashtra, Tamil Nadu, Karnataka, Assam, Tripura, Uttarakhand and Telangana have implemented its pilot project.

PACS can get financial help for building storage facilities and other agricultural infrastructure. NABARD supports PACS by offering loans at very low rates, around 1 per cent, after applying a 3 per cent interest subvention for projects up to ₹2 crore. The goal is to improve PACS’ economic situation by expanding their business and providing more ways to earn money, which will help them become financially stable.

Enhancing access to market

Farmers’ capacity to directly supply various wholesale markets or related industries necessitates large-scale aggregation capabilities at the village level, as well as effective transport integration. By being able to aggregate at Warehouses and transport their products to preferred markets, farmers can enhance their access to different markets for their produce.

Most often the marketable surplus is not aligned to demand leading to uneconomic storage of the produce in warehouse. The food grain storages will be economic when demand is aligned with the supply side. This alignment can be achieved by following strategies:

1 Integration with market information with agri logistics starting from farm-gate

2. Market Information System to be integrated with extension and advisory services

3. Environment-friendly ways to improve logistics include changing packaging to save space, reducing greenhouse emissions and using recyclable materials to reduce waste.

Digitisation and new technologies

The digitisation of PACS and the adoption of new technologies are strategically driving changes that lead to more beneficial outcomes, making agriculture sustainable in both commercial and environmental aspects.

The logistics chains connecting farms to markets, enhanced by advanced technologies like IoT, business development, data analytics, and autonomous robotics, have the potential to revolutionise supply chain management. This transformation shifts the traditional linear business model to a more integrated approach, utilising multimodal transportation to serve a diverse range of markets across various locations.

Yadav is Director, VAMNICOM. and Sharma is with Dr. Rajendra Prasad Central Agricultural University, Pusa, Bihar.Views are personal

Published on February 8, 2025