Issues in Supply Chain Management in Indian Agriculture

Abstract

Introduction India has experienced a remarkable growth in the production of various agricultural commodities over the last four decades. Though technological intervention in the mid 1960s contributed significantly towards bringing the country from deficit to surplus stage in food grains production, the recent trend of cropping system is creating a lot of problems related to sustainability and market imbalances. Several studies suggest that the reform policy of the government only focussed on price measures and ignored the infrastructural and institutional changes which have caused an unfavourable effect on agricultural growth in recent decades (Kumar, 2002; Chand, 2005). Various empirical studies have also shown the strong and positive impact of public investment on agricultural productivity and growth in India (Evenson et al., 1999; Chand, 2001; Landes, 2004), which has been declining over time. But contrary to this, for competing in the world market with the emergence of the WTO, Indian agriculture needs more public investment and policy support in several areas to overcome prevailing structural weaknesses such as a low scale of operation, high post harvest losses, poor rural infrastructure, a lack of product diversification, inadequate RD Naik, 2003). The agricultural production system is broadly categorised into these sub-components – input supply, production, processing, sales and distribution to consumers and quality and food safety measures. Interaction between these components is negligible throughout the agriculture sector in India. In practice, most of these components act independently and the flow of information between different components is either missing or very poor.