A study once represented that a quantity of wheat equivalent to the entire production of Australia goes to waste each year in India. Rs. 44,000 crore is the value of food grains wasted in India every year.What’s more, the food grain wastage value is 150 per cent of India’s budget allocation on agriculture. While many of us may raise eye brows on these statistics, unfortunately these have not moved our law makers. While the parliament and media have more than engaged themselves on a question of Rs. 288,000 crore spent on Food Security bill, unfortunately, they have not shown even a fraction of seriousness towards yearly loss of Rs. 44,000 crore due to food wastage. Stopping the food wastage should be the preamble of the food security of the country.
The problem of food wastage is not new. Food Corporation of India has admitted of food grain wastage of 79 million tonnes between 2009 and 2013. India produces about 260 million tonnes of food grain every year including wheat, rice, pulses and cereals. Rice has the major share (105 million tonnes), in it, followed by wheat (95 million tonnes), cereals (42 million tonnes) and pulses of (18 million tonnes). Farmers them-selves store about 70 per cent of the produce on their own and 30 per cent is procured by the government through different schemes for storage and public distribution. While the storage by farmers suffers a wastage of 6 per cent due to rodents, insects and fungi, surprisingly the wastage is about 30 per cent when the food grain is stored by FCI and state warehouses. lt’s surprising that the highest wastage occurs in the so-called developed states of Gujarat, West Bengal,Punjab, Maharashtra and Uttarakhand. FCI and State Warehousing Corporations together hold a storage capacity of only 70 million tonnes, whereas food grains procured every year exceed 80 million tonnes, creating a shortfall of about I0 million tonnes. An addition of emergency stock requirement of l0 per cent widens this gap to 20 million tonnes. While the average capacity of a facility is 20,000 tonnes, many of the FCI storage facilities are set up in open sky, making it easy for the grain to rot!
In the age of technology today, one is able to predict the consumer behaviour with minimal failures. Then, how come we are not able to predict the actual demand vs procurement of grains? Wrong estimates result in extra procurement, thus making FCI an official hoarder. Non-adoption of FIFO (first in, first out) principle further adds to this massive wastage. The solution is to develop an integrated software application linking overall production, demand, procurement and storage, keeping in view the associated regions and infrastructure available. The system will create most optimal location network of grain storage, minimizing travel distance for storage as well as final distribution. Such integrated software system is the key to building an efficient grain storage network. The financial institutions, technology, consumer markets and infrastructure move along with structure of society. The change of joint family to nuclear families has forced these to change from hub 8r spoke model to distributed architecture. Therefore, rather than one big bank, we now have thousands of ATMs; intelligence is stored in clouds rather than in one big computer; and home deliveries take care of our requirements, instead of one big shop.Similarly, the grain storage infrastructure architecture also needs to change. From several hundred big storage spaces, the architecture needs to move into several thousand small go- downs close to farmers and distribution spots.
The second intervention of technology is needed in the storage infrastructure itself. Today, new-technology steel silos and silo bags are available, whereby the life and safety of grain are enhancedmultiple times by creating modified atmosphere of low oxygen and high CO2. Through these technologies, one can create smaller storage of 2,000 tonnes per bag next to farmers, taking only 1/10th of an acre of land. It is the most chronic supply chain problem ever. It is time to get the perspectives right and implement solutions by supply chain professionals!
DR.N.K.ARORA
http://www.drarorawarehousing.co.in
The problem of food wastage is not new. Food Corporation of India has admitted of food grain wastage of 79 million tonnes between 2009 and 2013. India produces about 260 million tonnes of food grain every year including wheat, rice, pulses and cereals. Rice has the major share (105 million tonnes), in it, followed by wheat (95 million tonnes), cereals (42 million tonnes) and pulses of (18 million tonnes). Farmers them-selves store about 70 per cent of the produce on their own and 30 per cent is procured by the government through different schemes for storage and public distribution. While the storage by farmers suffers a wastage of 6 per cent due to rodents, insects and fungi, surprisingly the wastage is about 30 per cent when the food grain is stored by FCI and state warehouses. lt’s surprising that the highest wastage occurs in the so-called developed states of Gujarat, West Bengal,Punjab, Maharashtra and Uttarakhand. FCI and State Warehousing Corporations together hold a storage capacity of only 70 million tonnes, whereas food grains procured every year exceed 80 million tonnes, creating a shortfall of about I0 million tonnes. An addition of emergency stock requirement of l0 per cent widens this gap to 20 million tonnes. While the average capacity of a facility is 20,000 tonnes, many of the FCI storage facilities are set up in open sky, making it easy for the grain to rot!
In the age of technology today, one is able to predict the consumer behaviour with minimal failures. Then, how come we are not able to predict the actual demand vs procurement of grains? Wrong estimates result in extra procurement, thus making FCI an official hoarder. Non-adoption of FIFO (first in, first out) principle further adds to this massive wastage. The solution is to develop an integrated software application linking overall production, demand, procurement and storage, keeping in view the associated regions and infrastructure available. The system will create most optimal location network of grain storage, minimizing travel distance for storage as well as final distribution. Such integrated software system is the key to building an efficient grain storage network. The financial institutions, technology, consumer markets and infrastructure move along with structure of society. The change of joint family to nuclear families has forced these to change from hub 8r spoke model to distributed architecture. Therefore, rather than one big bank, we now have thousands of ATMs; intelligence is stored in clouds rather than in one big computer; and home deliveries take care of our requirements, instead of one big shop.Similarly, the grain storage infrastructure architecture also needs to change. From several hundred big storage spaces, the architecture needs to move into several thousand small go- downs close to farmers and distribution spots.
The second intervention of technology is needed in the storage infrastructure itself. Today, new-technology steel silos and silo bags are available, whereby the life and safety of grain are enhancedmultiple times by creating modified atmosphere of low oxygen and high CO2. Through these technologies, one can create smaller storage of 2,000 tonnes per bag next to farmers, taking only 1/10th of an acre of land. It is the most chronic supply chain problem ever. It is time to get the perspectives right and implement solutions by supply chain professionals!
DR.N.K.ARORA
http://www.drarorawarehousing.co.in
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