In what respects, India's food value chain is different from more established markets around the world? Discuss.
Published: November 20, 2017
Food value chain refers to the network of producers, processing industries and sellers to get the food items to the consumers.
Indian food value chain is contrary to the established markets around the world due to
- Predominance of subsistence farming and fragmented land holdings resulting in hindrances in achieving of economy of scale similar to established markets around the world.
- Fragmentation of the market due to APMCs, The APMC law mandates the selling of the produce in pre-designated markets. These restrictions are resulting in canalisation and cartelisation.
- Large Informal sector around 50% is concentrated in Informal sector. Thus limiting the scope of their operation.
- As Indian agriculture is a gamble of monsoons, the country witnesses a large volatility in the levels of yields, prices of agricultural produce.
- Lack of sufficient number of warehouses and cold storages is resulting large chunk of crops getting wasted.
- India has one of the world’s largest food security programme covering around 68% of the population. Thus there would be frequent governmental interventions which disrupt the market forces.
- Underdeveloped food processing Industry and market
- The domination of retail sector by traders rather than corporate houses like Wal-Mart in the established markets.
Some of the differences of the Indian food value chain is resulting in deficiencies reducing the efficiency of the food value chain. There has been Interventions by the government to address these deficiencies.
Model Questions Category: 066 - Storage Transport and Marketing of Agricultural Produce Related Issues