The agriculture sector plays an immense role in the Indian economy. According to FAO, it is a major source of food and income for about 70% of India’s rural families. It has the potential to help our country combat hunger and achieve food security. While major attention is being given to increasing crop production and shortening agricultural supply chains, the logistics sector has remained underdeveloped for a long time. However, this is changing now.
What is logistics in the agricultural sector?
Agricultural logistics is the process of ensuring a continuous flow of farm produce from the suppliers to the end consumers. Some of the activities include agricultural production, acquisition, storage, handling, transportation and distribution. These activities are performed effectively to meet the demands of consumers and achieve maximum values.
Let’s discuss the two most important components of agricultural logistics
This involves holding and preserving goods from production to consumption. A robust storage facility will ensure a continuous flow of agricultural goods in the market. Also, it will help in protecting the quality of perishable and semi-perishable produce. Storage is also important for stabilizing the price of produce by balancing demand and supply.
In India, about 70% of the total food grains produced are retained and consumed at the farm level. The remaining food grains are sent to registered warehouses and local mandis for procurement. As of 2019, the warehousing capacity for agricultural produce is recorded to be around 9.1 crores metric tonnes.
For improving the storage facilities, the government has introduced the Decentralized Procurement Scheme in 2015. Under this scheme, food grains are procured and distributed by the state governments themselves. Apart from this, a ‘Village Storage Scheme’ was announced in the Union Budget 2020-21. The scheme aimed to support farmers in building storage capacities for agricultural produce. Also, it is being run by the Women’s Self-help Groups (SHGs).
Proper packaging and improved transportation facilities prevent large quantities of farm produce from getting spoiled during transit. Currently, only 1.9% of produce, especially fruits and vegetables, is transported through railways. However, the rail network has huge potential and needs to be optimized. Union Budget 2020-21 launched ‘Kisan Rails’ to help farmers send their perishable agri-produce to interstate markets via dedicated trains. These trains have refrigerated coaches to ensure that the quality of goods does not degrade during transportation. Apart from this, the ‘Kisan Udan Scheme’ was launched for moving agricultural goods by air.
Agri-logistics is critical to the development of the agricultural sector in India. A lot of emphasis needs to be given to this area to safeguard the quality and well-being of farm produce throughout the agricultural supply chain.
Logistics plays an integral role in the day-to-day activities of agriculture mandis. Commission agents usually sell farmer’s produce on the same day to prevent it from rotting. In case they cannot do so, the produce is kept in their warehouses or cold storage. Sometimes, they even have to transport farm goods from one mandi to another. However, to keep a log on the stock bought, stored, transported and sold, an efficient accounting system is a must-have. This is where ChargeERP comes in.
ChargeERP is a cloud-based accounting software designed to cater to the needs of commission agents operating in mandis. This platform is easy to use and can be accessed from multiple devices. This solution is powered by Bijak, India’s No. 1 agri-trading app. Apart from easing mandi trade, the app also provides a truck booking feature to its users. With this feature, traders can reach a truck service provider easily and book it for transporting their agricultural goods.