Supply Chain Management of food grains in South Tamilnadu

Justification for limited scope of the study

Production of food grains in South Tamilnadu: Food grain production in the districts of south Tamilnadu is reducing drastically over the resent years. Tamilnadu contributes about less than 2% of the produce. When we consider net area sown, over the past decade there is a huge shift from food grain production to other food crop production like coconut. In Kanyakumari District the food grain net sown area has reduced to 20 percent of total share of crops in a short period of 4 years. (23,561 Ha in 2006 and 18,763Ha in 2010). At the same time net sown area for coconut crop has increased to 15 percent of the total share in the same Kanyakumari District. (24,220 Ha in 2006 and 25628 Ha in 2010). Marketing of food grains in South Tamilnadu: Farmers get their price for their produce on the basis of the minimum support price fixed by the government at that particular time.(eg. MSP fixed by Govt. of India for paddy is Rs 5.50 in 2006 and Rs 12.30 in 2012 )

Justification Cont.
The food grain supply from the area of South Tamilnadu cant even

satisfy the 10 Percent of demand in the same area. Farmers have regulated market in most of the blocks throughout the district. These markets allow farmers to store their produce at a minimum price and it also gives access to traders.

Suggested topic

Food Supply chain management of Fruit and Vegetable crops in Tamilnadu

Justification of new topic

Tamil Nadu accounts for 10% in fruits and 6% in vegetables, in India. Tamil Nadu is a leading state in the production of major Fruits and vegetables.

Major crops include banana, mango, brinjal, tomato, onion, potato, tapioca which contribute 39.8%, 20.3%, 8.1%, 11.3%, 10.3%, 8.9%, 5.5% of percentage share in India. The total production of fruit crops, vegetable crops standing at 82.9, 99.47 lakhs tons respectively during 201112. The state is the largest producer of bananas, flowers, tapioca, the second largest producer of mango, coconut, groundnut and the third largest producer of coffee, sapota, Tea and Sugarcane. Only 2% of F&V produce is processed. The quantity of produce exported is also negligible as the grading process is not standardised. Farmers in the state dont have the habit of storing there produce, instead they would sell the produce at farm gate. The intermediate in the market buy those produce and sell them in at multiplied rate. Thus the farmer doesnt get actual benefit from their produce. This situation pushed many farmers to stop their farming activity and sell their land for other non farming activity. Pushing towards urbanization leaves many agricultural land barren, as there is a huge reduction in agriculture laborers.

Justification of new topic- Cont.

Farmers have no more awareness on soil testing. Resulting in reducing

soil fertility. Accessibility of farmers to other area market is very limited. The details about the produce and market price are not regularized. Farmers are not much exposed to the subsidies offered by the government and most of the benefits go to the landlords who own the land. Resulting in loss to the actual farm laborers. Processing facilities for perishable items available for the produce are limited. Storage and cold storage required to store the produce is negligible. Resulting in huge wastage. Common objective in the whole chain is missing. Loans given for agricultural purpose by commercial banks and rural banks are not satisfying their goal.

OBJECTIVES
To understand the available food supply chain management in Tamilnadu. To analyse problems faced by all the key players ( Farmers, intermediates,

wholesalers, retailers, traders, customer) due to the lack of supply chain management in Tamilnadu. To study food safety and traceability issues and thereby to manage a proper information flow within the food supply chain in Tamilnadu. To evaluate different channels prevailing within the food supply chain and thereby to ascertain cost incurred to each and every chain members in different channels in the State. To estimate the post harvesting food loss and to reduce those loss by improved storage facility, processing techniques. To suggest an improved model of food supply chain system that would help the farmers to access information related to availability of storage location, transportation facility, market availability, processing facilities, current market price in different markets in the state.

Literature Review
S No Topic No of Articles No. of Thesis No of Books

1
2 3 4 5 6 7 8 9 10 11

Supply Chain Management

Food Supply Chain Management Food Security & Traceability

10
24 13

2
3 1 1 1 3 11

5
1 2 1 1 10

Food Distribution Channel 13 Contract Farming Agri-Business Horti- Business Information Technology Agriculture Marketing Organized Retailing Total 11 8 5 8 6 9 107

Literature Review
Globalization, agribusiness, the U.S.-Mexico food-chain,

and farm-worker struggles in north Carolina Agri-Business Sector in IndiaA SWOT Analysis A framework for designing robust food supply chains Forecasting food supply chain developments in lagging rural regions: evidence from the UK A literature review on the impact of RFID technologies on supply chain management Unravelling the food supply chain: strategic insights from china Value Chains and Retailing of Fresh Vegetables and Fruits, Andhra Pradesh Going For Broke with FDI In Retail Internet-based applications in the agri-food supply chain: a survey on the Greek canning sector

Literature Review
A system dynamics analysis of food supply chains

Case study with non-perishable products The use of electronic data interchange for supply chain coordination in the food industry. Are supply-chain relationships more influenced by buyer supplier relationships or the business environment of the country itself? Evidence from the China-Australia trading relationship Food Retailers as Drivers of Supply Chain Integration: A Review

Gap in Research
Framing a model for food supply chain is based on culture,

perish-ability, availability and accessibility. Hence, a common model would not be feasible. As the food sector is more unorganized with lot of key players in the chain, Framing a efficient and effective SCM is a complicated process. Based on the literature survey, the study about the food supply chain is very limited in India. There is a huge market potential and untapped market in this area of study. Considering the potential and need to organize the sector the study adds value to improve supply chain of Fruit and Vegetable produce.

Area profile

State profile
GENERAL INFORMATION OF Tamilnadu . i. Geographical area (Ha) -13033116 ii. Administrative Divisions (As on 31-3-2007) Number of districts 32 iii. Population (As on 2011 Censes) Total Population 72,138,958 Male 36,158,871 Female 35,980,087 Cultivators population: 5116039 Total agricultural laborers: 8637630 iv. Average Annual Rainfall - 1448.6 (mm) v. Climatic zone: i. North Eastern Zone

(i). North Western Zone

(iii). Western Zone.

iv. Cauvery delta zone (v) Southern Zone (vi) High rainfall Zone (vii) Hilly

area

Industrial profile
3.

LAND USE (Ha) (2010-11) i. Forest area 21,25,475 ii. Net area sown 49,53,658 iii. Barren & Uncultivable waste 4,89,253 4. MAJOR SOIL TYPES 1. Red sandy soil 2. Red loam 3. Lateritic soil, 4. Sandy Costal Alluvium & 5. Black soil.

5. AREA UNDER PRINCIPAL CROPS (Ha): 1. Banana 1,07,394 1. Mango 1,39,496 2. Brinjal 7,871 4. Tomato- 22,087 5. Ladies Finger 6,229 6. Onion- 31,959 7. Potato- 4,624 8. Tapioca- 11,9618

Industrial profile
LIST OF Predominant Horticulture MARKETS IN Tamilnadu:
Chennai Koyambedu Market Coimbatore Market Madurai Market

Mettupalayam Market
Ottanchataram Market Panruti Market Thalaivasal Market

Tirunelveli Market
Trichy- Gandhi Market Hosur- Vegetable Vendor Association Market

Hot spots of Fruit and Vegetable produce in

Tamilnadu:
Coimbatore Western Zone Dharmapuri- North Western Zone Villupuram -North Eastern Zone Tiruchi- Delta Zone Salem North western zone Tirunelveli- Southern Zone

Kanyakumari Heavy rainfall Zone

Cold Storage facility Available in Tamilnadu:

Private- 130(Nos.) Coorporate-13 (Nos.) Public- 05 (Nos.)

Scope of the study

Major crops considered for study:

The study includes major fruits and vegetables grown in Tamilnadu. They include banana, mango, brinjal, tomato, Ladies finger, onion, potato, tapioca. Supply Chain Management: The study will help in integrating the raw materials suppliers, famers, wholesalers, retailers, and customers of the food agri business in Tamilnadu related to major horticulture produce in the state. Transparency in the food chain: The study would focus to create database of farmers ,traders and warehouse agent, who are dealing with fruit and vegetable crops grown in Tamilnadu. This would help in building up transparency and information flow in the food supply chain. Demand based production: The study will focus on changing supply based market to demand

Scope of the study- Contn

Warehouse and cold storage:

The study will emphasis the importance of having planned warehouse based on the capacity of the produce. It also emphasis the importance of cold storage for perishable produce. Customers: The study would also help to analyze customers preference towards different food crops.

Research Methodology
Primary Data: The present study is based on information collected from:

the market officials of the selected fruits and vegetable markets, commission agents/wholesalers, retailers and farmers in and around the selected cities. The market officials were interviewed/consulted for gathering the information on the overall activities of these markets, marketing infrastructure and other related information. Data were collected from the wholesalers/commission agent, retailers, middlemen and farmers through structured questionnaires Secondary Data: Data related to location, climate, rainfall, soil types, land utilization, crop plantation pattern, yield, production of major crops, statistical reports are collected from district and block

Research Methodology- Contn

Markets District from which produce arrives Tr, Ti, Th, Di, Er,Ve Farmers Wholesal Retailers er, Commissi on Agent, intermedi ary 25 25 30 20 15 10 30 10 10 10 5 Processin Customer g agents s

Chennai Coimbator e Madurai

15

3 8 7 3 8 2

50 25 25 20 35 15

Co, Er, Din 40 Vir, Tr, Ti, Th 30 30 35 25

Mettupalay Co, Er, din am Ottanchatr am Panruti Co, kodai, ooty, er Tr, Vi, Th, Ve

Thalaivasa Din, Nil

25

10

15

Research Design
Study Area: Tamilnadu Total no. of districts: 32 Total number of Cultivators population: 5116039

Total agricultural laborers: 8637630

Sample plan:7 districts are selected purposefully based on different

agro climate zone in Tamilnadu. On the basis of maximum vegetable and fruit availability different blocks are selected for study. Among the 7 districts we have selected 14 blocks for the study randomly. Sampling technique: Stratified random Sampling. Research Design: Descriptive research.

Literature Review

GLOBALIZATION, AGRIBUSINESS, THE U.S.-MEXICO FOOD-CHAIN, AND FARM-WORKER STRUGGLES IN NORTH CAROLINA

by FRANCESCA COIN This dissertation analyzes the changes introduced in the U.S.-Mexico food-chain, and the ways in which the multinational corporations that control the food industrial complex from seed to shelves have altered the labour dynamics of farm-workers. The study analyzes the impact of U.S. agribusiness on growers and farm-workers, focusing on how the integration of agriculture into a free-trade world economy has affected the working conditions of farm-labour. Conclusion: The small businesses and small retail outlets that are forced to compete with big corporate powers. Such a reorganization of the farm-labour movement at the grassroots level is crucial to the creation of a food-chain that is capable of satisfying the needs of production and consumption for the global population. Many growers have left agriculture altogether, a decision that was not only influenced by the labour contract but also by the tobacco buyout, which persuaded many farmers to just take the money and go. In a global economy thats symbolized by Wal-Marts monopoly, the vertical concentration of agriculture is pushing growers towards the bottom of the food-chain, slowly proletarian zing even these once-rich land-owners. The growers who remain in the association have either continued to externalize their production costs on the workers, or, in some cases, complied with the union in its campaigns for better wages and working conditions.

Agri-Business Sector in IndiaA SWOT Analysis LOKESHA

Strengths

Setting up of agro-based industries in and around rural areas can create employment opportunities and improve the economic status of small and marginal farmers, development of suitable infrastructural facilities, better dissemination of knowledge or technology in production, stabilizing the prices Weakness: Modernization of agri-business sector involves high cost of machinery, Lack of technical and trained managerial expertise to operate modern machineries, lack of proper storage facilities to store the raw materials. Opportunities Production of Fruits and vegetables in India, processing centre, Mechanization, Irrigation, Information technology. Treads Small and marginal farmers are losing their lands and are even becoming landless labourers, does not consider the social equity.

A framework for designing robust food supply chains

By Jelena V. Vlajic n, Jack G.A.J.vander Vorst, Rene Haijema

Summary The study defines the concept of robustness and classify supply chain disturbances, sources of food supply chain vulnerability, and adequate redesign principles and strategies to achieve robust supply chain performances. A robust system (supply chain )has the ability to resist disruptions, retaining its system structure intact, whilst a resilient system is adaptable ,i.e. it will adapt to regain a new stable position. Sources of supply chain vulnerability are (i) External sources which include financial sources, market sources, Legal sources, Infrastructural sources, social sources and (ii) Internal sources which include organization structure, managing system, managed system, Information system. Framework of study consists of the following elements: (1) the description of the supply chain scenario (2) the identification and characterization of unexpected events and disturbances in processes that impact the performance robustness; (3) the assessment of performance robustness; (4) the identification of sources of vulnerability; and (5) the identification of appropriate redesign principles and strategies. Meat supply chain is taken for case study and analyzed for performance assessment and there by to check its robustness and sources of vulnerability.

Forecasting food supply chain developments in lagging rural regions: evidence from the UK
Brian Ilberya,*, Damian Mayea, Moya Kneafseya, Tim Jenkinsb, Catherine Walkleyb

Summary
The study documents and supports mechanisms have long been in place to help overcome structural difficulties due to lagging rural regions(LRRs) in EU. The paper attempts to answer some of these questions and, to forecast those factors likely to influence supply chain development and performance in two LRRs in the UK: West Wales and the ScottishEnglish Borders. Factors influencing the supply chain environment for food SMEs are Macro environment, Primary producers, Intermediates, Commercial customer, Customers. The findings suggest that while most experts willingly accept the socioeconomic values that can be gained by localising, shortening and synergising the food chain in LRRs. The overall success of food SMEs in LRRs will be determined by how well they adapt and develop necessary skills and training (e.g. supply chain management) and attract investment needed to enable continued development

A literature review on the impact of RFID technologies on supply chain management

Aysegul Sarac, NabilAbsi, Stephane Dauz ere-Pe r es Summary
RFID technologies may improve the potential benefits of supply chain management

through reduction of inventory losses, increase of the efficiency and speed of processes and improvement of information accuracy.
Main problems of supply chain management that can be improved through RFID;

inventory inaccuracy, the bullwhip effect and replenishment policies.

RFID can improve the traceability of products and the visibility throughout the entire

supply chain, and also can make reliable and speed up operational processes such as tracking, shipping, checkout and counting processes, which leads to improved inventory flows and more accurate information. It can provide cost reduction, increased revenue, process improvement, service quality, etc.
RFID can (i) provide a new business model and can increase the communication

between supply chain actors (ii) improve the information flow of a construction supply chain environment (iii) communicate their identity, location and history with their environment.
Three different stages of RFID implementation are proposed by Chuang and Shaw

(2007) ; functional, business and inter-company RFID integration. They indicate that these stages have different risk and benefit degrees.

UNRAVELING THE FOOD SUPPLY CHAIN: STRATEGIC INSIGHTS FROM CHINA

ALEDA V. ROTH, ANDY A. TSAY, MADELEINE E. PULLMAN, JOHN V. GRAY

Summary:

The paper, had develop a conceptual framework called the Six Ts of supply chain quality management traceability, transparency, testability, time, trust and training which are relevant for safe food supply. by three major forces: (1) globalization, (2) consolidation and (3) commoditization and by three factors (1) Robustness (2) Complimenting factor (3) Enablers.

Traceability and transparency in food supply chains, however, are especially affected

The study acknowledges the many difficulties for outsiders in conducting business

within a deeply entrenched culture with an elaborate set of unwritten rules, practices and customs, especially as it undergoes light speed changes and faces the inevitable growing pains in China.

The study concludes that Traceability and transparency are naturally more difficult as the various forms of distance increase. Time is added to the supply chain with increased physical distance. Food is inherently difficult to thoroughly test. Different norms and values lead to trust issues that are compounded by a loss of the buying firms knowledge over time. Training may be difficult because of differences in cultural norms.

Value Chains and Retailing of Fresh Vegetables and Fruits, Andhra Pradesh
G.P. Reddy*, M.R.K. Murthy and P.C. Meena Summary

This study on retailing has been undertaken in Andhra Pradesh to examine growth and performance of modern retailing and its impact on traditional retailers. The study has indicated that the number of players is less in modern retailing than in the traditional retailing. The study also has compared between traditional and modern value chain. For instance, in the case of vertical distribution in the traditional value chain, 19.8 per cent of the gross value goes to farmers, 11.3 per cent goes to village merchant, 14.3 per cent goes to middlemen, 15.3 per cent goes to wholesalers, 12.0 per cent goes to commission agent, 16.8 per cent goes to bazaar and the remaining 10.8 per cent goes to traditional retailers.

In the case of vertical distribution in the modern value chain, 21 percent of the gross value goes to farmers, 14.5%, 12,75%, 11.75%, 38% of the gross value goes to whole sale supplier, collection centre, Distribution centre, retailer respectively.
The emergence of modern retail chains has created new food value chains which have helped in reduction of price and production risks and thereby have increased returns from farming. The demand for quality, safety and other specific requirements may exclude small scale farmers. But, for consumers there is an improvement in product quality and convenience. Vendors play an important role in the modern value chain by reducing the information gap with training and channelization of modern retailers and farmers. There is also a need to reduce intermediaries in marketing of FFVs so that farmers share in consumer or users rupee increases.

Going For Broke with FDI In Retail Rajiv Kumar, Devinder Sharma
Pros
The entry of FDI with its modern inventory management practices, new

storage and vending technologies and advanced organizational skills will go a long way in modernization of this sector. Currently, the share of modern retail is a mere five per cent in the total retail trade sector. But empirical evidence suggest, a modernized retail sector will offer significant benefit for farmers, small producers and to customers. The most important contribution will be, it has a potential to generate large number of semi skilled and skilled jobs for Indian youth. FDI in retail could create 10 million new jobs in our economy. The investment in back-end infrastructure by modern retailers would reduce wastage and allow greater shelf life for farm products. It will also help to connect directly farm- gate to retail stores. It also suggest that FDI has the potential to minimize the layers of intermediates in the supply chain resulting in increase in profit to the producers Modern retailers also can improve high yield varieties of seeds and better technologies help to bring down the cost and more yield. It also helps in improving quality, traceability of the yield.

Going For Broke with FDI In Retail

CONS. In real picture even in U.S ., big retail like Wal-Mart, Carrefour has not helped farmers to larger extent. Big retail argue that farmer get better prices, in spite that study shows in Europe one farmer quits in every one minute. The next argument is that big retailers will squeeze out middleman, but in real picture it gives new battery of middleman- quality controller, standardizer, certification agency, processor, packaging consultants etc. Other argument is that big retail could provide scientific storage there by can save lot of produce but, FDI in single brand has already allowed for building storage facility but no investment has come up yet. Small retail players in the economy will loss their scope due to competition from retail giant. It is estimated 400 billion markets which employs more than 12 millions employing 12 million retailers employing 40 million people would impact on such decision. Reference:

THE HINDU Going for broke with FDI in retail, Sep 15, 2012, P 11.

Internet-based applications in the agri-food supply chain: a survey on the Greek canning sector
V. Manthou *, A. Matopoulos, M. Vlachopoulou

Summary: The paper aims at giving empirical insights regarding the use of Internetbased applications in the agri-food supply chain, by focusing on the Greek fruit canning sector. The main problem faced by the sector is that most firms operate during short harvest seasons (23 months on the summer). Uncertainty due to unpredictable weather condition. Electronic Data Interchange (EDI) applications were enabling companies to exchange information and data which result in coordination and facilitation of logistics activities. Applying Internet based application in transportation like ETM( Electronic Transportation Marketplace) can help to reduce transportation cost to larger extent. From the analysis the companies are using internet only as a tool for promotion and data exchange. They limit using net because of higher cost and security constrain.

A system dynamics analysis of food supply chains Case study with non-perishable products
Sameer Kumar , Anvar Nigmatullin

A system dynamics approach was used to study the behaviour and

relationships within a supply chain for a non-perishable product, and to determine the impact of demand variability and lead-time on supply chain performance. The proposed model facilitates identification and study of the critical components of the overall supply chain, allowing for the creation of an efficient and sustainable supply chain network. The internal causal categories include People and Methods. Management structure and the incentive system of the company, as well as, the qualifications and skills of related staff contribute to demand uncertainty and variability. The external cause of Demand includes changes in technology, demographics, competition, and consumer trends. The main limitation of the model is the data used as inputs into the modelling system. The authors were able to utilize average demand, lead-time data but were not able to get demand history data. The data used in the model was based on interviews of the supply chain professionals in two different companies.

The use of electronic data interchange for supply chain coordination in the food industry

Craig A. Hill , Gary D. Scudder

Summary:
Supply chain management (SCM) is concerned with inter organizational coordination:

companies working jointly with their customers and suppliers to integrate activities along the supply chain to effectively supply product to customers.
This research focuses on electronic data interchange (EDI), an important class of IT

used for inter-organizational information transfers in the supply chain. Data from a survey of the food industry is used to examine the use of EDI with respect to inter-firm coordination activities involving suppliers and customers.
The result suggest most firms used EDI for the frequent and routine transactions,

invoices and purchasing orders, they were not using EDI as often for the transactions that are more coordinating, such as transferring current schedules, production, and sales activities.
This suggests that firms may see EDI as a tool for improving efficiencies rather than a

tool for developing SCM. A surprising result was the difference in the use of EDI depending on whether the supply chain member was a customer or a supplier.
Further research could look specifically at one position in the supply chain such as the

retailer; or intentionally develop a respondent profile that is representative of the entire chain.

Are supply-chain relationships more influenced by buyer supplier relationships or the business environment of the country itself? Evidence from the China-Australia trading relationship
Ray Collinsa, Ximing Suna and Chong Guang Li Summary:

Study analysis poor supply chain performance is reported as being caused by either poor relationships between firms in China and Australia. Facing difficulty for food quality, safety, traceability. It is also found that coordination within the partners in the supply chain is very poor due to inefficient information system, poor logistics and poor distribution system. This research paper explores the relative importance of these two factors, supplier customer relationships and the business environment of the country itself, in the performance of food supply chains linking Australian suppliers with Chinese consumers. Study analyses four level of integration in chain (i) Internal integration and information within a single company in a supply chain; (2) Integration with a companys immediate suppliers and customers; (3) Integration with the suppliers suppliers and the customers customers; and (4) Integration that results in networks of interconnected businesses.

Study compares relationship of China and Australia with their supply partners in terms of four level of integration. The study concludes, to be successful Firms exporting food to China should therefore keep supply chains as short as possible to minimize the uncertainties and risk associated with its chain partners in the business environment.

A Review
Jon Hanf
In the context of the agri-food sector material flows have to be coordinated

as to timing, quantity, quality and other factors. Thus, vertical co-operation between firms requires a great deal of co-ordination between the partners and these can only be efficiently aligned by a sophisticated management concept There are three types of interdependencies: i) pooled interdependencies between firms competing in the same market, ii) vertical interdependencies between firms operating in different markets but linked by sequential work flows where the output of one is the input of the other, and iii) symbiotic interdependencies between firms that complement each other or have reciprocal product and/or information flows . Entering new markets such as China, India, and Russia these retailers faced the challenge to build up totally new procurement relationships. Even though the local population has not been demanding the same quality standards as in Western Europe the retailers decided that in the medium term the basic standards.

Post Harvest Losses due to Gaps in Cold Chain in India A Solution -Chilukuri Maheshwar
Old System: Farmer - Village Agent at Taluka level - Market Agent at the

Mandi level Wholesaler - Semi-Wholesaler Retailer Consumer. New System: Farmer Retailer Consumer. Horticulture is a very competitive and risky business, it emphasizes the importance of control at various stages of the product movement viz. Grading, Packaging, Pre-cooling, Storage and Transportation so that correct product quality is maintained. It is not to be treated as an individual activity. It is a community activity involving growers, shippers, importers, carriers, government authorities, equipment suppliers and others. Only commitment, communication and free flow of information from all concerned parties make it a successful enterprise.

Thank You!!