Elaborate the scope and significance of supply chain management of agricultural commodities in India.

Check out the UPSC Mains 2025 GS Paper 3 Question no 4 Solution with detailed explanation, important facts and conclusion in this Article.

Q4. Elaborate the scope and significance of supply chain management of agricultural commodities in India. (150 Words)

Approach

Begin with a brief definition of Agricultural Supply Chain Management (SCM) as the end-to-end coordination of farm produce from input supply to consumer. In the body, outline its scope-covering input provision, post-harvest handling, storage etc. Then highlight challenges like fragmentation, poor storage, and limited processing. Conclude with the significance – farmer income, food security, sustainability, and exports -while suggesting digital platforms, cold chain, FPOs, and AgriStack for future-ready SCM.

Agricultural Supply Chain Management (SCM) refers to the coordinated planning, movement, storage, processing, and distribution of agricultural produce from farm to final consumer. It integrates farmers, input suppliers, processors, transporters, wholesalers, retailers, and exporters into a seamless system.

Scope of Supply Chain Management in Agriculture

Input Supply and Production Stage: Ensuring timely supply of quality inputs like seeds, fertilizers, pesticides, farm machinery, irrigation facilities.

Eg: IFFCO’s fertilizer distribution network ensures last-mile delivery to farmers.

Post-Harvest Handling: Efficient harvesting, sorting, grading, and packaging to maintain quality. It will reduce post-harvest losses (30–40% in fruits and vegetables in India).

Eg: Pack houses under the Mission for Integrated Development of Horticulture (MIDH).

Storage and Warehousing: Cold storages, controlled atmosphere facilities, and modern silos to reduce spoilage.

Eg: Central Warehousing Corporation (CWC) and National Cold Chain Grid.

Transportation and Logistics: Moving produce from farms to markets quickly and safely. It includes refrigerated trucks, Kisan Rails, and air cargo for exports.

Eg: Kisan Rail trains connecting farmers with distant markets.

Processing and Value Addition: Converting raw produce into processed products (milk → cheese, tomatoes → puree).

Eg: Amul dairy cooperative and ITC e-Choupal initiatives.

Marketing and Distribution: Linking farmers directly to consumers, wholesalers, retailers, and exporters.

Eg: e-NAM (National Agricultural Market) integrating APMCs digitally.

Consumer Interface: Ensuring safe, traceable, high-quality produce reaches the consumer. Rising demand for organic, pesticide-free, and branded foods expands scope further.

Eg: Online platforms like BigBasket and Reliance Fresh sourcing directly from farmers.

Export Facilitation: Compliance with global standards (quality, packaging, traceability). It will expand India’s agri-exports in rice, spices, fruits, vegetables, seafood.

Eg: APEDA (Agricultural and Processed Food Products Export Development Authority).

Digital & Technological Integration: ICT, AI, IoT, blockchain, and drones for monitoring crops, predicting demand, and ensuring supply traceability.

Eg: Blockchain-based traceability platforms like Agri10x.
Financial and Risk Management: Access to institutional credit, insurance, and contract farming. It will protect farmers from price volatility and climate risks.

Challenges in Agricultural SCM in India

Fragmented supply chains, Inadequate cold storage & warehousing, High post-harvest losses, Weak integration of digital tech, Limited processing capacity.

Significance of SCM for India

Reducing post-harvest losses: Currently ~₹92,000 crore annually; SCM ensures better storage, packaging, and transport.
Price stabilization: Better logistics and reduced middlemen help avoid gluts and shortages (e.g., onion price spikes).
Farmer income enhancement: Direct market access (e-NAM, Farmer Producer Organisations) ensures better price realization.
Food security: Smooth procurement and distribution strengthen PDS and buffer stocks.
Export competitiveness: Quality assurance, grading, and efficient logistics boost exports under APEDA.
Sustainability: Efficient supply chains reduce food wastage, conserve resources, and lower carbon footprint.
Employment generation: Processing, storage, and logistics create rural non-farm jobs.

Supply chain management of agricultural commodities is vital for doubling farmer incomes, ensuring food security, and making Indian agriculture globally competitive. A future-ready SCM will need integration of digital technology, cold-chain infrastructure, FPOs, and private sector participation, ensuring efficiency “from farm to fork.”In this direction, the proposed AgriStack aims to integrate inputs, credit, markets, and supply chains, enabling precision services and seamless linkages across the value chain.