One of the banes of Indian economy is the total collapse of the rural/agrarian product market system. The problems are beautifully captured in the diagram below sourced from internet.
Our focus had always been on the first of the two Ps - Product and Price. Government led initiatives went a long way in improving the product through green revolution in the first place, and providing for high quality seeds and better soil management. The Operation Flood 1 and 2 revolutionised the Milk sector to some extend, though we are a long way from modern integrated Dairy practices. The Government adopted the support price/floor price policy that included massive subsidies to take care of the second P-Price.
Our focus had always been on the first of the two Ps - Product and Price. Government led initiatives went a long way in improving the product through green revolution in the first place, and providing for high quality seeds and better soil management. The Operation Flood 1 and 2 revolutionised the Milk sector to some extend, though we are a long way from modern integrated Dairy practices. The Government adopted the support price/floor price policy that included massive subsidies to take care of the second P-Price.
But where we missed out totally is in the third P - Place or Distribution. Any country, that has 33% of its food grains rotting, not having any sort of infrastructure to preserve the perishable vegetables and fruits, not possessing the distribution network to effectively connect the retail buyer with the producer, not in a position to give adequate returns to the producer while fleecing the end user, is asking for trouble. We have seen poor starving while food is rotting, an apple takes 17 days without refrigeration to reach South from Kashmir, the vegetables and fruits still remain a commodity, whereby giving poor returns to the producer. The need of the hour is for creating of better modern storage facility on a war footing, and this has to be in the private sector, as the government sector has failed miserably in this area. Vegetable/fruits hyper markets have to be established across the country which can and should remain the only whole saler. The number of middle men who devour the profit has to be brought down. This will ensure better preservation of agrarian products and lower the prices in the retail front. Government should also ensure seamless movement of agrarian products across the country and can take steps to brand products that can help in the long run. It has already started happening in the case of rice and is paying good dividends.
The money required to establish this logistical network will be a pittance compared to the investment we are making in the industrial sector and well worth it.
