3. Supply Chain Management of Food Grains in India

The supply chain of agricultural commodities in India is fraught with challenges. Not only the size of holdings are fragmented and small, they are dominated by marginal and small farmers, there is lack of scale of economies, supply chain is laden by low standards of processing and value addition and there is shortage of marketing infrastructure. In the Indian scenario, the markets for wheat and rice are different as compared to other agricultural commodities as the government controls the rice and wheat for balancing the value and nation’s food security. Participants in wheat and rice supply chain are input suppliers of seeds, fertilizers, manures, pesticides and insecticides, farmers, commission agents (Arhtiya), FCI (Food corporation of India), other government procurement corporations such as Markfed, Central Warehousing Corporation, large millers of wheat and rice, wholesalers and retailers of processed grains and consumers. Input suppliers consist of major chemical producing companies, government distributors, wholesaler, retailers, and even very small retail shops that sell small quantities of seed, fertilizer, manure and pesticide to peasants at the village level. The major producers of wheat and rice supply chain are in the states of Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, and Rajasthan. There is a clear cut relationship between supply chain management and rural development, because mismanaged supply side creates an imbalance in demand and supply equilibrium which hampers their prevailing insufficient incomes and ultimate means of livelihood. Some of these issues and government policy towards handling these challenges is discussed in this paper.