A Grain Vending Machine: A Le ATM
This is in extending the PM’s clarion call of “One Nation One Ration Card” to “One Nation One Ration Card Anywhere Anytime” Can this also revive the economy?
The food generated from India’s fields has such high yield that according to the World Economic Forum, the country has already attained food self-sufficiency. Farm output five years back exceeded 270 million tons, well over the estimated 225 to 230 million tons of food needed to feed its population in a year. Yet, for all its agricultural wealth, the country is struggling to feed its own.
India ranks 103rd out of 119 countries in 2018’s Global Hunger Index, a worldwide study that measures and tracks hunger at global, regional, and national levels. 194 million Indians go hungry every day, according to estimates by the United Nations Food and Agriculture Organization (FAO). The organization attributes this problem to massive food wastage. Almost 40% of food produced in India, equivalent to USD 14 billion, is wasted before it reaches the consumer. Imagine the economic gains if this is plugged. The problem however, lies in its supply chain management.
Among many opportunities that the Pandemic opens up, one is to reinvent and reenergise the supply chains. Agriculture accounts for 26% of the GDP and therein lies the importance of its supply chain. If the reforms that the PM promised can de-stress the farming sector and also serve its customers, it would be an important step to reviving the economy.
A larger debate would be as to which reforms are more important. The Supply side or the demand side. The demand-side economists argue that instead of focusing on producers, as supply-side economists want to, the focus should be on the people who buy goods and services, who are far more in number.
Most of the agriculture production operates at the single farmer level who perforce have to depend on middlemen who distort prices, exploit them and prevent produce and other goods from reaching places where demand exists. On the other hand, the stakeholders like the farmers, wholesalers, food manufacturers, retailers all work in silos. Good business practices like demand forecasting, collaborative forecasting, financial flow management or supply-demand matching are hardly practiced. Though the agriculture sector also produces vegetables, fisheries, poultry, etc each with a unique structure, the inefficiencies are all the same.
None or little investment is made in technology that supports agriculture. Almost 30% of fruit and vegetables cannot be sold since they rot without special cold storage, pre-cooling facilities and refrigerated carriers. Packaging warehouses and Management Information systems will be necessary. Can this infrastructure be made available throughout the country? Surely, some innovative use of technology will revive the demand side economics. Be that as it may, on the demand side, the public distribution system also is beset with problems.
Under the National Food Security Act, almost 65% of the population are entitled to buy subsidized food grain from the designated Fair Price Shops (FPS) of a Targeted Public Distribution System (TPDS). Approximately 25 Cr Ration cards service a population of which 30% are migrants. Further, within the States of enumeration, 85% are migrants. It is extremely difficult for these migrants to access their rations since the ration cards are not honoured outside their place of registration.
A technological solution that identifies beneficiaries through biometric authentication and an electronic point of sale system (ePoS),installed at the FPSs not only record the transactional information, but also generate detailed reports in response to the input data and enable the customers to purchase the quantity of food grains they are entitled to akin to an ATM. If Aadhaar can be repurposed also to become the digital footprint of the migrant, the FCI warehouses can then in turn appropriate stocks and the supply chains can connect the hungry to the stocks.
This could contribute to Digital India, only partly, as it will still require the beneficiary to go to the FPS in a new place which may prove daunting at times. Apart from the perceived digitization and secure communication, will it also eliminate the malpractices, pilferage, adulteration, improper measurements of quantity, and promote transparency to both government and customer is debatable. A simple portable Grain Vending Machine (GVM) akin to an ATM can not only be located anywhere in a city or a Village or a Gram Panchayat operating 24x7x365, with AI deciding the reordering quantities, rendering an FPS redundant with it all its negatives. Most of the FPS’s also sell many other merchandises and will not go out of business anyway. Can the clarion call then be reworded “one nation one ration card anywhere any time”?
Supply chain management (SCM) of agribusiness has to manage the relationships between the production and supply of the farm produce from farm to home to meet consumers' requirements of quantity, quality and price reliably. Making the GVM, GPS enabled can easily be the proverbial farm to home device. All that it will need is an automatic grain sachet filling device inbuilt into the GVM. Over time, even the massive silos of the Food Corporation may be rendered redundant and used for better purposes.
Admittedly more glamorous, urban industries like information technology, financial services and construction are also the drivers of economy. However, they cannot be at the expense of rural economy and consumer satisfaction. That the government is considering liberalizing the country’s $400 billion retail market of which a large portion is agriculture is good. However, the role of multinational corporations like Wal-Mart could prove dubious what with rural farmers and small business owners questioning their intent.
Whereas multinational corporations create wealth and jobs, supplement inward investments in the form of FDI, use economies of scale for profit which could be used in R&D, ensure minimum standards, promote local produce in the global markets and create new employment opportunities for lost jobs, they could also profiteer, avoid taxes, create large reserves that can be siphoned out, send local firms out of business, contribute to environment degradation with questionable processes, promote ‘Sweat-shop labour’ and outsource jobs to lower labour cost economies.
What could be a way out then for the policy makers? True Atmanirbharata will need Indian social enterprises who work with farmers directly to consolidate “best practices and reach out to consumers in their own backyard There are several grassroots organizations and organic farming experts in the country, who along with IT tools can make the supply chain management more efficient. However, innovative technology-based solutions like the GVM at the customer end along with Walmart like corporations to bring the cutting-edge technology are equally important. Just as ATM’s have taken banking to the unbanked. GVM’s can take the grain to the unfed.
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