Linkages of Small Holder Farmers through traceability – The need

of developing and importing country

BY

DHANASHREE SHUKLA

FARMPACK INDIA

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INTROUCTION & BACKGROUND

• FARMPACK IS A BRAND IN THE PRIVATE SECTOR. THE COMPANY HAS A PROFESSIONAL TEAM INTO CULTIVATION WHERE THE PRODUCT(S) ARE GROWN OR PROCURRED AS PER THE QUALITY REQUIRED FOR DOMESTIC & EXPORT MARKETS.

• EXPORT OF PRODUCE IS DONE BY AIR AND SEA ROUTE . MIDDLE EAST AND EUROPEAN MARKET DEMAND VARIOUS PRODUCTS FROM INDIA THROUGH OUT THE YEAR.

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• Worldwide about half a billion farms are smaller than 2 hectares, and these farms are getting smaller in many developing countries. The continuing decline is due to factors such as growing rural population, urban growth that is not labor intensive and unclear land policies. Small farms are expected to produce four fifths of the developing world food (FAO 2011). Moreover they are home to approximately two- thirds of the 3 billion rural residents, the majority of people living in poverty and half of the worlds undernourished people. Growth in agriculture has been shown to be an important part of the initial stage of transformation in many countries.

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Background Cont :

WHAT DID WE DO?

THE FOLLOWING PRACTICAL STUDIES WERE CONDUCTED

• TYPICAL EXPORT PROCEDURE FROM INDIA IN FRESH PRODUCE.

• WHY THE GAP BETWEEN FARMERS AND EXPORTERS EXISTS?

• WHY FINANCIAL & INSURANCE INSTITUTIONS WERE UNWILLING TO FUND/INSURE FRESH AGRO PRODUCE EXPORT? WHAT RISKS MAKE THEM RELUCTANT TO COME FORWARD WILLINGLY?

• CHALLENGES FACED BY EXPORTERS ON DOMESTIC & INTERNATIONAL LEVEL IN FRESH PRODUCE.

• NEED AND ADVANTAGES OF DATA HARMONISATION AND SINGLE WINDOW PROCESSING.

• TRACEABILITY NEED OF DEVELOPING AND IMPORTING COUNTRY

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TYPICAL EXPORT PROCEDURE FOR FRESH

FRUITS & VEGETABLES IN BRIEF Harvesting (farm level)

↓

Cooling (in shed, holding room)

↓

Sorting & Grading.

↓

Packaging (pack house)

↓

Pre-cooling (cold storage)

↓

Stuffing

↓

Dispatching for Export

There are several documents like phyto certification, certificate of origin, bill of lading in multiple copies, and invoice in multiple copies, Insurance copies. All this process is normally handled through agent/agencies, which involves time and travel of manpower to various institutes. This adds to cost and dependence. Single window shall help reduce dependency, cost and time.

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EXPORTER

CUSTOM HOUSE AGENT & EXPORT DOCUMENTATION

BANKING & INSURANCE

IMPORTER(S)

IDENTIFYING FARMER (S)

COLLECTION SAMPLE PRODUCE

FROM VARIOUS FARMS

TESTING AS PER IMPORT NORM

FROM APPROVED GOVERNMENT LABORATORIES

PACKHOUSE ACTIVITIES-

SORTING GRADING,WEIGHIN

G PACAKAGING STUFFING

EXPORTER ACTIVITIES

WHY GAP BETWEEN FARMERS & EXPORTERS ?

FARMER AGRI INPUTS

INFRASTRUCTURE

STORAGE

TRANSPORTATION

TECHNOLOGY

FINANCE

QUALITY ASSURANCE

TRAINING

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UNDERSTANDING BROKEN CHAIN OF

AGRICULTURE IN INDIA

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Production

•Poor extension

•Supply of inputs

•Low productivity

•Outdated farming

practices

Supply Chain Processing Marketing

• High wastage

•Lack of storage

• Poor transport.

• Many

intermediaries

• No assured

supply of inputs

• Lack of

processing facility

•Technology

•Poor infrastructure

•Lack of grading

• No market

linkages

Broken chain increases credit risk and limits credit flow

BOTTLENECKS OF ISSUES/CHALLENGES

MAIN OBSTACLES FACED BY THE FRESH FRUIT/VEGETABLE PRODUCE EXPORTERS

INTERNATIONAL LEVEL

• INSUFFICIENT COORDINATION AMONG BORDER AGENCIES .MULTIPLE BORDER CONTROLS

• LONG WAITING TIMES LOADING/UNLOADING PORT REDUCING THE QUALITY, THUS FINAL PRICE OF PERISHABLES

• NON-AVAILABILITY OF ONLINE EXPORT DOCUMENTATION PROCESSING

• LACK OF THE CROSS-BORDER DATA HARMONIZATION AND USE OF INT’L STANDARDS/NORMS COUNTRY WISE.

• NON AVAILABILITY OF TRACEABLE AND CERTIFIED MATERIAL FOR EXPORTS

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BOTTLENECKS OF THE ISSUE/CHALLANGES

DOMESTIC LEVEL

BASIC INFRASTRUCTURE OF COOL CHAIN MANAGEMENT SYSTEM DURING TRANSPORT/TRANSIT.

• TRANSPORT (LOCAL TRANSPORT, LOADING/ UNLOADING EQUIPMENTS)

• COLD STORAGE (POOR POST-HARVESTING TECHNIQUES)

• PROCESS (WASHING, WAXING)

• PACKAGING TECHNIQUES FOR FRESH PRODUCE

• PROFESSIONAL TRAINING :

LACK OF SCIENTIFIC FOCUSED, REGULAR AND FOLLOWS UP TRAINING FACILITIES FOR FARM LABOR/GROWERS /EXPORTERS.

• BANKING & INSURANCE:

LACK OF AGGRESSIVE WORKING BY THE BANKING AND INSURANCE COMPANIES IN THE FRESH AGRO EXPORT SECTOR AND FARMING SECTOR, LARGELY AFFECTING FUNDING GIVEN BY GOVERNMENT BANKING/PVT SECTOR.THIS LEADS TO THE FARMER BORROWING FINANCE AT HIGH INTEREST , LOWERING HIS RISK ABILITY FOR EXPORT

• THERE IS A NO OF STANDARD PRE-SHIPMENT AGENCY FOR INSPECTION DURING EXPORT IN FRESH AGRO.

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BOTTLENECKS OF ISSUE/CHALLENGES

DOMESTIC LEVEL ---CONTINUED • DOCUMENTATION & CERTIFICATIONS: EXPORT REQUIRES NUMEROUS DOCUMENTATION DURING

REGISTRATION PROCESS AS WELL TRACEABILITY CHARTS ARE REQUIRED BY IMPORTERS WHICH ARE TIME CONSUMING AND TEDIOUS MAKING INDIAN FARMERS HESITANT AS MAJORITY HAVE LOW LITERACY. EG: SEDEX/ISO/GLOBALGAP. UNDERSTANDING THE MINIMUM RESIDUE LEVEL STANDARDS REQUIRED IN INTERNATIONAL MARKET BY IMPLEMENTING INTERNATIONAL CERTIFICATIONS IS THE NEED.

• EASY REGULAR ACCESS TO SCIENTIFIC INFORMATION/DATA NOT AVAILABLE TO FARMERS ,ON PRODUCT(S) GROWN BY THEM, TRACEABILITY OF FERTILIZER SCHEDULES, HARVESTING TIMES WHICH CAN SAVE TIME FOR THE EXPORTERS TO PROCURE.

• FARMERS ARE NOT AWARE OF THE STANDARD QUALITY NORMS ACCEPTABLE IN INTERNATIONAL MARKETS.

• AS THERE IS NO PRESENCE OF SINGLE WINDOW, THERE ARE MANY DOCUMENTATION WHICH ARE REPLICATED LOSING TIME VALUE WHICH IS MOST IMPORTANT IN PERISHABLE EXPORTS.

• WHEN IMPLEMENTING SINGLE WINDOW, ALL GOVERNMENTS FACE SIMILAR CHALLENGES. THESE RELATE TO THE TECHNICAL ASPECTS OF THE SYSTEMS, AS WELL AS THE ORGANIZATIONAL AND INTER-ORGANIZATIONAL, MANAGERIAL, FINANCIAL, POLITICAL, LEGAL, NATIONAL AND INTERNATIONAL SETTINGS. THIS REQUIRES ADVANCED MANAGERIAL COMPETENCIES IN VERY DIFFERENT DOMAINS—SUCH AS TRADE POLICIES, BUSINESS PROCESS ANALYSIS, CHANGE MANAGEMENT, ELECTRONIC BUSINESS AND INFORMATION TECHNOLOGY MANAGEMENT AND STANDARDS, LEGAL ISSUES AND SINGLE WINDOW ARCHITECTURES.

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Constant Supply of Quality Fruit And Vegetables Is The Problem, For Exports & Process Not the Demand

Practically many market players would agree that quality supply of fruit and vegetables is holding back further exports and process, not its demand. Many a time production is actually running short compared to the international and local demands. If the market is mentioned as the main bottleneck for expansion it is not its demand but the procèss and system such as refer transportation, shelf life extension technologies ,communication , certifications and food safety paramètres.

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WHY DATA HARMONISATION & SINGLE WINDOW?

• ELECTRONIC INFORMATION IS ALSO EASIER TO PROCESS AND MORE IS MORE RELIABLE.

• IT REDUCES COSTS AND DELAYS ALL ALONG THE SUPPLY CHAIN. SINCE GOODS CANNOT TRAVEL FASTER THAN THE INFORMATION THAT CONTROLS THEM, SPEEDING UP THE INFORMATION EXCHANGE MAKES TRADING MORE COMPETITIVE AND EFFICIENT ESPECIALLY FOR PERISHABLE AGRO PRODUCE.

• BUT DESPITE THE RAPID DEVELOPMENTS TRADERS AND ADMINISTRATIONS CONTINUE TO USE BILLIONS OF DOCUMENTS IN PAPER FORMAT EVERY YEAR. THE COSTS INVOLVED, AS WELL AS THE COMPLEXITY OF THE DOCUMENTS AND THE PROCEDURES, ARE A MAJOR BURDEN FOR GOVERNMENTS AND BUSINESS. AND FOR SMALL AND MEDIUM-SIZED COMPANIES, THESE COSTS ACT AS A MAJOR DISINCENTIVE TO ENGAGING IN INTERNATIONAL TRADE. 13

INITIATIVES TAKEN

AFTER ATTENDING EXPERT GROUP MEETING IN JAN 2009 GOT INSPIRED AND

STARTED PILOT PROJECT WITH THE MSAMB AND KRISHI VIBHAG ( AGRICULTURE DEPARTMENT) FOR DATA HARMONIZATION FOCUSING ON SINGLE PRODUCT ,POMEGRANATES, TO START WITH. IN THIS SUBJECT WE CONDUCTED SEMINARS AND MEETING FOR GROWERS IN THE POMEGRANATE GROWING POCKETS AND ASKED THEM TO TAKE ADVANTAGE OF THIS PLATFORM USING FREE INFORMATION AVAILABLE.

MAIN TASK WAS TO REGISTER GROWER/FARMER ON LINE WITH ALL THE DETAILS OF HIS FARM , VARIETY CULTIVATED, FRUITING SEASON, FERTILIZER SPRAYING DETAILS, HARVESTING DETAILS.

HAPPY TO INFORM AROUND 1000 PLUS POMEGRANATE GROWERS HAVE

REGISTERED

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FARMLEVEL

IDENTIFYING PRODUCE FARMERS

AREAWISE

CONDUCTING MEETING AND WORSHOPS WITH

FARMERS,VILLAGE HEADS TO COMMUNICATE

AWARENESS OF THE SYSTEM

REGISTERING & FILLING UP QUESTIONARE WITH

DETAILS OF FARMER,LAND TYPE /SIZE ,

PRESENTFERTILISERS USED, PRESENTSPRAY SCHEDULES ,CROP PATTERN, EXPECTED

HARVEST TIME

TRAINING FARMERS FOR

SCIENTIFIC CULTIVATION

PRACTICES

FOLLOW UP OF SPRAY SCHEDULES PRESCRIBED FOR

EXPORT PRODUCE VIA SMS, AND

VISITS

SELECTED FARM PRODUCE SENT TO

LABORATORY TESTING BY EXPORTERS/FARMER

FARM LEVEL COLLECTION OF DATA

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LABORATORY INFORMATION OF

SAMPLE(S)

PHYTO DEPARTMENT

EXPORTER/FARMER

STATE GOVERNMENT HORTICULTURE DEPARTMENT

APEX BODY RESPONSIBLE FOR

AGRI EXPORTS-CENTRAL

GOVERMENT

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PACKHOUSE – ELECTRONIC/BAR CODING IS TAMPER PROOF,FAST AND MORE AUTHENTIC FOR ALL INVOLVED IN

SUPPLY CHAIN

CARTON

PACAKAGING MATERIAL

PALLET NUMBER

RAW PRODUCE PLOTWISE/DAT

EWISE

HARVEST DATE

FRUIT FROM SELF SOURCE

OR

EXTERNAL SUPPLIER

CLEANING AGENTS

WAXES USED IF ANY

GRADING QUALITY WISE

LABOUR BATCH

PRODUCE QUANTITY IN KG/NUMBER

CUSTOMER CODE

COUNTRY

EXPIRY DATE

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DETAILS OF MATERIAL SHIPPED REQUIRED &

CHECKED BY

GROWERS

GROWER COUNTRY AGRI

CULTURE

DEPARTMENT

EXPORTER

SHIPPING LINE

LOADING AND UNLOADING

PORTS

IMPORTER/WAREHOUSE

DATA IS SHARED AMONG SEVERAL HANDS BEFORE

FINAL DELIVERY TO CUSTOMER

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• REGISTRATION, RECORD KEEPING & MONITORING OF FARMS

• PRODUCT STANDARDIZATION & INSPECTION STRENGTHENED

• IMPLEMENTATION OF GOOD AGRICULTURAL PRACTICES

• EXPORTS ONLY FROM RECOGNIZED PACK-HOUSES

• PESTICIDE RESIDUE ANALYSIS BY ISO-17025

• NABL COMPLIANCE LABS.

• SETTING UP OF NRL FOR PERIODIC CHECKS AND ALERTS

• REGULAR TRAINING PROGRAMS FOR ALL CONCERNED

WHAT WAS DONE BEFORE THE SYSTEM WENT ONLINE?

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SUPPLY CHAIN IMPROVEMENTS

• INCREASED IMPLEMENTATION OF GAP

• VALUE ADDITION THROUGH CONSUMER PACKS

• GRADING AS PER EXPORT STANDARDS

• ABSOLUTE EFFICIENCY OF LABORATORIES

• TRACEABILITY THROUGHOUT THE SUPPLY CHAIN

• ZERO PAPER-WORK & TOTAL ACCOUNTABILITY

BENEFITS OF TRACEBILITY TO FARMERS

• It is seen the famer who worked previously on an individual platform has understood the importance of working in a team structure. The knowledge base and inputs gained from agri officers, exporters has given him larger exposure towards importance of systems and training required for him to update knowledge. This is evident from the increasing numbers attending farmer’s meets and questions posed by them

• Farmers are more inclined on scientific cultivation techniques to have quality produce. They are implementing scientific cultivation methods, tools, irrigation systems and post harvest techniques to get the desired quality and yield results.

• Farmers associated with exports become a local example to surrounding farmers working conventional methods , who are seen keen to switch to new age scientific methods.

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BENEFITS OF TRACEBILITY TO FARMERS-02

• Farmers today also use right logistic ways to transport their produce to packhouse /domestic markets. Previous methods of stuffing in a gunny bag no more is seen and fruits like pomegranate are transported in crates reducing mechanical damages.

• Farmers have realized the importance of connecting with direct customers in domestic market as well exporters. They have realized middle men in no way help them do any value additions in terms of improving quality or commercial gains. This has increased their income and living standards.

• Many educated children of farmers family find staying back in their village and developing a good farm, focused on scientific base fetches them more income compared to an salary migrating to the city. Many farmers who looked at agriculture as second income have realized that this a priority sector and now started look upon it as an industry.

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BENEFITS OF TRACEBILITY TO FARMERS-03

• Due to increase in demand farmers are growing the crop like pomogranate which is now exported/traded 7 to 8 months instead of restricting for a particular season. Exporters at the same time identify various farmers who work year long in focus products so they can ship to various countries in rotations.

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BENEFITS OF TRACEBILITY TO EXPORTERS-01

• The exporter has an access to various resources available at government level. This includes research labs experts, packaging institutions, farmers data product wise, industry information, experts on various subjects, statistics on exports etc. This platform means the exporter now has a team and system in place without large investment.

• The exporter now has ready knowledge base for availability of fruit, variety wise ,in various pockets of the country through year/season, with expected production volumes, harvest times supporting planning of exports or domestic distribution.

• Saving on time: Being exporter of perishable produce time is the main

constrain. Now exporters save time in identifying farmers product wise, which is performed and updated by government system/agriculture officers at the village/district level.

Again this saves initial costs related to manpower, collection of data , time of

travel, updating.

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BENEFITS OF TRACEBILITY TO EXPORTERS-02

• Easy to trace the origin of the produce through the government system builds immense confidence of the exporter and farmer to take positive steps towards the business investment and cultivation activity for world markets. In case of positive residual analysis at importers end reject is restricted only to a particular batch instead of full consignment. The rejected batch/ farm can be studied and improved during next dispatches.

• Dependency on middleman who do no value addition in supply chain for getting the fruit/produce has gone down considerably as the communication gap between farmer and exporter is reduced , which was previously the middle mans role. As there is increased interaction both parties understand the importance of each other’s positive ability, risks involved and support for development needed.

Produces that are not still on the traceability platform are handled by middlemen and risks seen in terms of these products are larger. It is also observed the product price can be higher.

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DESIRED RESULTS IN SUPPLY CHAIN FOR FRESH PRODUCE

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REGULAR SUPPLY OF FRESH/GRADED/PACKED/BAR CODED TRACEABLE PRODUCE TO CUSTOMER TRANSPERANCY IN MONETARY TRANSACTIONS FOR FARMERS SCIENTIFIC APPROACH TO CULTIVATION AND MARKETS MIDDLE MEN DELETED

WITH NO VALUE ADDITION

MAXIMISED ADVANTAGE TO FARMER FROM SALES PROCEEDS

LATEST FINDINGS/OBSERVATIONS

1. EXPORT SHARE OF THE FOCUSED PRODUCT HAS GONE UP CONSIDERABLY EG: GRAPES & POMEGRANATE

2. SCIENTIFIC, PLANNED AND ORGANIZED FARMING CAME INTO LARGER EXISTENCE AS PER DEMAND AND SUPPLY POSITION IN INTERNATIONAL & LOCAL MARKETS.

3. FARMERS LIVING STANDARD IMPROVED CONSIDERABLY AS GETTING DIRECTLY MONITORY BENEFITS

4. PRODUCTION LEVEL QUALITY AND TRACEABILITY IMPROVED IN FOCUSED PRODUCTS.

5. SIX TO SEVEN MONTH OF PRODUCTION HAS BEEN POSSIBLE INSTEAD ONLY SEASONS AS EXPORT AND LOCAL DEMAND HAS GONE UP.

6. SAVING VALUABLE TIME OF FARMER, EXPORTER AND GOVERNMENT INSTITUTIONS AT VARIOUS LEVELS OF EXPORT.

7. INCREASE OF EMPLOYMENT OPPORTUNITIES IN RURAL AREAS.

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WHAT IS NOT WORKING?WHY? • DATA COLLECTION: AS LARGE NUMBER OF FARMERS OF SMALL HOLDINGS

UPDATION BECOMES TEDIOUS FOR FIRST TIME. COLLECTION AND REGULAR UPDATING OF DATA, IN MULTIPLE PRODUCE, FROM SMALL AND MEDIUM LAND HOLDING FARMERS IS THE MAJOR CHALLENGE DUE TO LOW LITERACY LEVELS. THIS IS RESULTANT TO NON UNDERSTANDING AND IMPORTANCE OF DATA HARMONISATION AS WELL LONG TERM BENEFITS THE FARMERS WILL GAIN IN DOMESTIC AND EXPORT MARKETS

• INVOLVEMENT OF TOO MANY GOVERNMENT INSTITUTIONS FROM TALUKA,DISTRICT, STATE TO CENTRAL LEVELS HAMPERS COORDINATION AS MANUAL SYSTEMS NOT STILL UPDATED.

• FACILITIES IN TERMS OF INFRASTRUCTURE LIKE PRECOOLING, COLDSTORAGE, REFER VANS REDUCING AFFECTING NEW/OLD EXPORTERS TO MOVE IN INTERNATIONAL MARKETS WITH HIGHER QUALITY VOLUMES TO ATTAIN SCALE BENEFITS.

• BANKING AND INSURANCE COMPANIES RELUCTANT AS WELL SLOW IN PROVIDING FUNDS AND REQUIRED INSURANCE SERVICES, WHICH CAN ACCELERATE EXPORTS AND COMMERCIAL FARMING ACTIVITIES.IIUJKO

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THANK YOU.

CONTACT

dhanashreeshukla@hotmail.com

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