I came across this article while researching cold storage in our area. While not directly related to my initial objective, this article was an interesting read and I wanted to share this with the community. It's a long but easy read on how our changing lifestyle preferences, passive govt. policies and developing retail sector are making a downstream impact on the farming sector. After all, we know it pays to be at the right place at the right time :)
Ajit Sable's family have owned their farm in India's western Maharashtra state for 10 generations, which even for a region that has been farming for more than 10,000 years is long enough to witness plenty of changes. Two generations back, they started cultivating sugar cane here in Shivthar, a village in Maharashtra's highlands near the Krishna river. India's most industrialized state soon became its largest sugar producer. Today, it's not sugar the 35-year-old Sable is talking about. He is discussing peppers, which he is now growing under polythene plastic coverings. Like an increasing number of farmers in India, Sable is exploiting a shift in taste towards fruits and vegetables among Indians.
Rising Middle Class
Thsese shifts have been under way for years but are accelerating with rapid urbanisation and the expansion of India's middle class. Take Avantika Singh, for example. A consultant in the hotel industry, she lives in an apartment block in Delhi with her husband Sanjay, a television producer, and their 7-year-old daughter. The Singhs are still fond of traditional Indian food such as idlis, southern style rice pancakes served with spicy sauce, and parathas, wheat flatbreads cooked with oil or ghee.But on this day Avantika, 41, is cooking pasta with fresh peppers. As a working person, I look at whatever is easy to do and nothing too elaborate, she says. When you make idlis it's a whole day, day-and-a-half procedure. I don't have that kind of time.
Middle class households are expected to grow 67 per cent in the next five years, bringing over 53 million households into an annual income bracket between 340,000 and 1.7 million rupees ($7,600-38,000). Bijay Kumar, managing director of the National Horticulture Board, says having more money than your parents is pushing up demand for high-protein foods.
Food Security
While the farm sector is slowly diversifying, it is a declining contributor to growth, despite providing a living to more than half the country's workforce. About 600 million Indians are dependent on farming-- half the population of 1.2 billion. Farmers are finding it ever more difficult to make ends meet.
The introduction of high-yielding seed varieties and increased use of fertilisers and irrigation spawned the Green Revolution in the 1960s that allowed India to become self-sufficient in grains. But experts say agriculture innovation and efficiency has stalled in recent years and farmers are getting squeezed by rising costs and inefficient agronomy.Increasingly, voices in government and among experts are calling for a different approach, one that curbs subsidy spending, tackles inflation and boosts agricultural production of higher-value foods.
Cut Safety Nets
Ashok Gulati is a recent recruit to the government's inner circle from the world of research. He says too much money is going into safety nets such as subsidies and minimum wages when the government should be investing more to boost agricultural growth and innovation. India's agriculture ministry planned to invest about $4.8 billion in 2011-12. I would say you should have 70 per cent of resources for growth and 30 per cent for welfare objectives, but it's the other way around, Gulati says.
The World Bank has criticised the subsidies as highly inefficient. But they have powerful political supporters, especially Sonia Gandhi, president of the ruling Congress Party, whose vote bank has long been in rural areas. Gulati also favours modernising distribution networks. Supply chains should be shortened, by making it easier for retailers and food processors to buy direct from farmers.
Cold Storage
About 30 per cent of fruit and vegetable production goes to waste in India. Summer temperatures which regularly top 40 degrees Celsius (104 F) also mean fruit stored without chilling can ripen overnight. Temperature-controlled warehouses are sprouting up across India but are mostly small-scale private enterprises.
The National Horticulture Board says wastage can be trimmed by increasing the amount of cold storage facilities available. We also need good infrastructure to collect and aggregate farm goods produced in remote areas, he said. Without robust storage, they need to be delivered to consumers as early as possible. In the last four to five years, demand for fruit has risen by 25-30 per cent. Producers can also focus on production if they have ability to process fruits or sell direct to supermarkets.
Supermarket Supply Chains
Indians are increasingly heading to air-conditioned stores, where aisles are packed with choice produce instead of the tiny mom-n-pop stores where items are lifted off dusty shelves offering just one or two brands of essential groceries. Players like Big Bazaar leverage their size and presence across India to buy from both big distributors and local suppliers.
Big Bazaar is one such player but the market is so huge that it can absorb many more (retail) brands.The supply chain and cold storage are also getting developed, so I think for the country, food business is a big bet. India's supply chains are fragmented and often involve several layers of middlemen between tractor and table.
In conclusion, it remains a Catch 22 situation, at least for now. Our road systems are still clogged and underdeveloped in key agricultural belts. Railway freight turnaround times are slow with limited availability of refrigerated freight vans. Cold storage of about 24 million tonnes is woefully inadequate for the world's second-biggest producer of fruit and vegetables. All of this means availability of fresh produce is highly regionalised. At the farms, producers want to sell to retail food chains because they offer higher prices, but it's hard to deal with them directly.Often, it's not worth the trouble and producers sell to wholesalers. They buy from the farm gate and pay lower rates but it eliminates the risk of transportation delays and wastage.
Credits : Complete and original article is available at Indian Express or Reuters.
Ajit Sable's family have owned their farm in India's western Maharashtra state for 10 generations, which even for a region that has been farming for more than 10,000 years is long enough to witness plenty of changes. Two generations back, they started cultivating sugar cane here in Shivthar, a village in Maharashtra's highlands near the Krishna river. India's most industrialized state soon became its largest sugar producer. Today, it's not sugar the 35-year-old Sable is talking about. He is discussing peppers, which he is now growing under polythene plastic coverings. Like an increasing number of farmers in India, Sable is exploiting a shift in taste towards fruits and vegetables among Indians.
Rising Middle Class
Thsese shifts have been under way for years but are accelerating with rapid urbanisation and the expansion of India's middle class. Take Avantika Singh, for example. A consultant in the hotel industry, she lives in an apartment block in Delhi with her husband Sanjay, a television producer, and their 7-year-old daughter. The Singhs are still fond of traditional Indian food such as idlis, southern style rice pancakes served with spicy sauce, and parathas, wheat flatbreads cooked with oil or ghee.But on this day Avantika, 41, is cooking pasta with fresh peppers. As a working person, I look at whatever is easy to do and nothing too elaborate, she says. When you make idlis it's a whole day, day-and-a-half procedure. I don't have that kind of time.
Middle class households are expected to grow 67 per cent in the next five years, bringing over 53 million households into an annual income bracket between 340,000 and 1.7 million rupees ($7,600-38,000). Bijay Kumar, managing director of the National Horticulture Board, says having more money than your parents is pushing up demand for high-protein foods.
Food Security
While the farm sector is slowly diversifying, it is a declining contributor to growth, despite providing a living to more than half the country's workforce. About 600 million Indians are dependent on farming-- half the population of 1.2 billion. Farmers are finding it ever more difficult to make ends meet.
The introduction of high-yielding seed varieties and increased use of fertilisers and irrigation spawned the Green Revolution in the 1960s that allowed India to become self-sufficient in grains. But experts say agriculture innovation and efficiency has stalled in recent years and farmers are getting squeezed by rising costs and inefficient agronomy.Increasingly, voices in government and among experts are calling for a different approach, one that curbs subsidy spending, tackles inflation and boosts agricultural production of higher-value foods.
Cut Safety Nets
Ashok Gulati is a recent recruit to the government's inner circle from the world of research. He says too much money is going into safety nets such as subsidies and minimum wages when the government should be investing more to boost agricultural growth and innovation. India's agriculture ministry planned to invest about $4.8 billion in 2011-12. I would say you should have 70 per cent of resources for growth and 30 per cent for welfare objectives, but it's the other way around, Gulati says.
The World Bank has criticised the subsidies as highly inefficient. But they have powerful political supporters, especially Sonia Gandhi, president of the ruling Congress Party, whose vote bank has long been in rural areas. Gulati also favours modernising distribution networks. Supply chains should be shortened, by making it easier for retailers and food processors to buy direct from farmers.
Cold Storage
About 30 per cent of fruit and vegetable production goes to waste in India. Summer temperatures which regularly top 40 degrees Celsius (104 F) also mean fruit stored without chilling can ripen overnight. Temperature-controlled warehouses are sprouting up across India but are mostly small-scale private enterprises.
The National Horticulture Board says wastage can be trimmed by increasing the amount of cold storage facilities available. We also need good infrastructure to collect and aggregate farm goods produced in remote areas, he said. Without robust storage, they need to be delivered to consumers as early as possible. In the last four to five years, demand for fruit has risen by 25-30 per cent. Producers can also focus on production if they have ability to process fruits or sell direct to supermarkets.
Supermarket Supply Chains
Indians are increasingly heading to air-conditioned stores, where aisles are packed with choice produce instead of the tiny mom-n-pop stores where items are lifted off dusty shelves offering just one or two brands of essential groceries. Players like Big Bazaar leverage their size and presence across India to buy from both big distributors and local suppliers.
Big Bazaar is one such player but the market is so huge that it can absorb many more (retail) brands.The supply chain and cold storage are also getting developed, so I think for the country, food business is a big bet. India's supply chains are fragmented and often involve several layers of middlemen between tractor and table.
In conclusion, it remains a Catch 22 situation, at least for now. Our road systems are still clogged and underdeveloped in key agricultural belts. Railway freight turnaround times are slow with limited availability of refrigerated freight vans. Cold storage of about 24 million tonnes is woefully inadequate for the world's second-biggest producer of fruit and vegetables. All of this means availability of fresh produce is highly regionalised. At the farms, producers want to sell to retail food chains because they offer higher prices, but it's hard to deal with them directly.Often, it's not worth the trouble and producers sell to wholesalers. They buy from the farm gate and pay lower rates but it eliminates the risk of transportation delays and wastage.
Credits : Complete and original article is available at Indian Express or Reuters.
