Supply chain/Value chain Development & Integration under FPD programme
H/A: 2401-00-111-97 Rs. 800.00 lakh
The State visualises a critical role of agribusiness for its journey ahead, by leveraging transformative ability of agriculture in generating rural income through production, marketing, processing, farm tourism, and other diversified activities. Ensuring supply of inputs and services for agriculture and creating value for outputs by establishing efficient supply chain is critical in achieving this transformation. There are agencies, both under public and private sector, involved in the supply chain. However, the supply chain of agriculture inputs, products, and services are enmeshed with several inefficiencies. Creation of value for agriculture produce forms the basis for further leveraging the sector’s potential. The value chain requirements for agricultural commodities has seen a sea change with emerging demand for diversified agricultural products including processed and value added products, food safety and traceability, and environmental sustainability in agricultural production. One of the crucial issues that agricultural production in Kerala is facing is the small and fragmented production with an increase in the share of marginal farmers. As a consequence, supply chain in Kerala is largely fragmented and riddled with the presence of numerous intermediaries like distributors and re-sellers who appropriate high margins. Therefore, an effective integration through aggregation becomes all the more challenging.
The major partners in the development of local and inter district supply chain as part of farm based development plan will be VFPCK, Horticorp, Cooperatives, Kudumbasree and FPOs. It is proposed to develop a Hub and Spoke Model of Aggregation as part of the Farm Plan Based approach. In a hub and spoke distribution model, a centralised hub exists, and products can be originated from this hub or is sent to the hub from the local points for marketing and distribution. In the Kerala context, crops specific local collection points can be identified/ developed which is integrated with centralised hubs.
It envisages involvement of farmers’ groups (can be collectives like Kudumbashree units as well) who collectivise the farm producers and the cultivated products at designated places and undertake supply/sale operations (for local markets). The excess production can be transported to the centralised major hubs which can undertake sale operations. There should be backward and forward linkages between these hubs and local production centers. In order to clear the market, the hubs will be linked to major traders/exporters/processors or any other demand centers (centers that demand the quantities in bulk). Registration of the producers and sellers will be made through electronic mode (like mobile app) which can register the quantities to be supplied by the farmers and that demanded by the major demand
centers/ traders. The digital and IT platform can be utilised to disseminate the supply, demand, price and quality related information.
The hub and spoke model will offer services including inputs and information supply. They will bring together economies of scale in the operations, and faster information delivery. FPOs, will also act as a major agency at the spoke level with suitable federated structure at the panchayat/block/district level. An amount of ₹ 300.00 lakh is earmarked for hub and spoke model development.
The scheme will also act as a safety net to the farmers by establishing a network of Premium Outlets including FPOs and cooperatives to sell fruits and vegetables procured from local sources with a better quality (say organic or the one produced following good agricultural practices) at a premium price. Increased consumer awareness in the state can also help strengthening the system. An amount of ₹ 300.00 lakh is earmarked for setting up of these outlets by cooperatives and FPOs. The support will be provided as 50% of the paid up cost and this will be available on a reimbursement basis. State government agencies viz., Horticorp and VFPCK will not be eligible for this assistance. However, Kudumbasree Units are eligible for support. The applications will be scrutinized and recommended to the state level committee jointly by VFPCK and SFAC. The Voluntary agencies with proven track record of three years in marketing and with minimum 5 outlets in the states and registered residents associations can also apply for the assistance. The maximum support per unit will be ₹ 5.00 lakh per unit and the maximum two such units will be supported for a single entity. This will be a onetime assistance for setting up of the unit and it is envisaged that support will be available only for capital expenditure like setting up of the units, furniture, weighing machines, electrical equipment and energy efficient systems like Solar panel.
A Centralised Market Information System mainly for vegetable and fruits arriving from all sources including that of other states will be developed based on the 4 pillars of market intelligence of Price, Place, Produce, and time/ seasonality intelligence. The existing MIS on market information such as Agmarknet could also be integrated to the possible level. This will enhance our planning process and act as a decision-making tool at farmer level, outlet level and administrative levels. An amount of ₹ 100.00 lakh is earmarked for this purpose. This amount will also be utilized for developing handling protocol, e-nam model of auctioning and brand creation.
The following activities will also be undertaken during the year 2022-23.
1. Development of Immediate Digital Payment Systems to Farms for their produce (₹ 50.00 lakh)
2. Support for Price Information System Display at outlets for FPOs - The support provided will be 50 % reimbursement on completion based on verification by the appropriate body (₹ 50.00 lakh)
