Supply chain/Value chain Development & Integration under FPD programme

H/A: 2401-00-111-97 Rs. 500.00 lakh

               Small and fragmented production resulting in a largely fragmented supply chain riddled with the presence of numerous intermediaries like distributors and re-sellers seizing high margins is one of the crucial issues of agricultural production in the State. This necessitates an effective integration through aggregation. As part of the farm based development plan, it was envisaged to develop a hub and spoke model of aggregation. 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. The hub and spoke model of aggregation will continue. In the Kerala context, crop 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 produces 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 developed can be utilised to disseminate the supply, demand, price and quality related information. The scheme outlay includes the expenses related to maintenance, upgradation and refinement of the digital platform.

             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. In order to facilitate immediate digital payment system to farmers, corpus fund will be provided to FPOs as
one time assistance. Those FPO which have already availed this facility once will not be eligible for further corpus fund.
Establishment of markets and hubs through FPOs /PACS will be supported on reimbursement basis at 50 % paid up cost. State Government agencies viz. Horticorp, VFPCK will not be eligible for this assistance. Support will be one time assistance for setting up units and support will be available only for capital expenditure like furniture, weighing machines, electrical equipments and energy efficient systems like solar panel. Strengthening the hubs established during 2023-24 under the farm plan based programme will be supported. No support will be given to private aggregators. However, VFPCK, Horticorp if acting as aggregators will be given need based support 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.
During 2024-25, an amount of ₹ 500.00 lakh is allocated under the scheme for the above activities.