Start-up Rural India, after Covid19

Most of rural India witnessed an unseasonal reverse migration of its able bodied manpower, who had to return perforce fearing prolonged economic duress. In the backdrop of the Covid19 pandemic, this movement from urban centres to home villages, was undertaken in defiance of a nationwide curfew. 

As this virus spreads its reach, it is quite evident that the risk of disease is heightened in localities with a high population density. When working in cities, these workers (termed migrants), tolerated crowded and squalid living conditions, usually in illegally built building blocks and slum areas that do not even pretend to have basic norms. Typically employing themselves in blue collar jobs and semi-skilled tasks, often as informal labourers, this workforce by now would understand that they are safer in the more open expanses of rural India.

Doubling of Farmers' Income

In day-to-day conversation, a number of terms sometimes lead to confusion, especially when the words involved are in disconnect from colloquial and professional context. Revenue and profit are often used interchangeably by the average person, but these terms have separate meanings, albeit profit being an outcome of revenue. Contextual clarity on terminology is important to avoid confusion of intent or action. 

Value Realisation is directly linked to market connectivity, waste occurs when connections fail.

Revenue is a synonym for income, whereas profit mean net income. Profit, in simple terms, means the income or revenue that remains after all expenses.

Increase in Farm Yields is not always Revenue Generating

The Chain, Interrupted or unInterrupted

Cold-chain value systems and options to be considered by planners. (also see Visions and Value chains)

1. The strategic business interest & capability of any concerned enterprise will define the scope and extent of the value chain of each such enterprise. Frankly, the involved models are easily differentiated and would extend across the following two basic categories-

 

a. Uninterrupted farm-to-fork sourcing and distribution of agricultural produce, especially perishables, wherein the fresh whole food does not undergo any change to its primary and natural characteristics. This value chain system is empowered with the agri-logistics intervention that services an out-reach into multiple markets through connectivity. This market link is key to generate a revenue stream that is volume based, and in turn feeds improved post-harvest handling, resultant growth in produce quality & productivity and also offers scope to stabilise demand-supply fluctuations.

Indian agriculture and G20

This February, the Group of 20 (G20) Development Working Group (DWG) holds its first meeting in Turkey. The meeting is the start of many, to prepare for the G20 leadership summit in December 2015. Agriculture and an understanding of next steps in this sphere, is an important matter for discussions. Under the framework of the Food Security Network (FSN), some of the items to be discussed – responsible investment in food systems, enhancing quality employment and incomes in agriculture, expanding food supply and sustainability are key topics.

In all these subjects, the Indian development records important examples, in terms of best practises followed, and the experiences and learnings that resulted. The G20 will do well to take cognisance of the India story, especially in the for agriculture area including cold-chain sector.  Let us touch on what Indian agriculture brings to the G20 table-

What’s with Solar panels and their usage…

Why do stand alone SME industrial units, homes and I include cold storages, shy away from installing solar panels to generate electricity?

Yes, cost is a factor as always. But that is one factor that is continually showing a downwards trend. (Today, if reports are true, the selling price per watt of solar photo voltaic is about 0.50 USD. Reports also suggest that this price is expected to come down to 36 cents per watt in 5 years. Past records show that in 1977 the price per what stood at USD 76 per watt).

The other reason quoted is the hassles of operations and maintenance. This is typically because the implied concept of Solar PV panel requires the use of a bank of batteries to store the cheap electricity. And batteries need to be replaced every now and then. The electricity that is generated from solar insolation would need to be stored in batteries, which in turn would be sourced to create AC power for use in common utilities. Another limitation for industries is that they may need 3 phase input into their machines.

But why store this electricity, why bother with batteries and et al? What if the solar power is fed directly into the local grid. I am not talking about sharing the surplus generated with the grid… the concept is to feed ALL that the sun generates for you, straight into the grid.

Viability Gap Funding (Cold chain)

This commentary is intended to present queries on the concept and the need for Viability Gap Funding (VGF) for the cold-chain industry in India. It is hoped that views; both for and against, shall be generated to allow a more cohesive debate on the matter and to allow policy makers to understand the need if any, the policy constraints if any and possible solutions to the agenda of faster cold-chain development in the country.

There is only one preliminary premise in this discussion, that we need more of the cold-chain and that this should happen with private sector participation.

First, a quick review of what are the five measures within the underlying principles of Viability Gap Funding (VGF)-

1. The task should be clearly understood as a Public Service. This also implies that a captive need exists; in business terms a steady long term “revenue stream”.
2. The project is undertaken under PPP mode and state government participates through provision of necessary land.
3. The Project has pre-determined user tariff indices, basis which revenue returns are assessed.

Private-Public Shift, is it Worthwhile?

Eminent people from pvt sector in govt positions
Business Standard - 16 July 2013

Can the government retain domain expertise they tap onto... should they?

Occasionally, some say more frequently of late, the Indian government asks experienced minds from the private sector to take on a role with them, to help devise, advise or in some case execute some policy decisions. I am not talking of tendered projects but about individual persons, whom the government assigns certain tasks to.

I was recently touted as one of these so called experts functioning alongside senior bureaucrats, lucky to get featured with some far bigger names. In fact it was with great trepidation that I took on a leadership role as Chief Advisor on matters "cold-chain" and to help incubate the National Centre for Cold-chain Development (NCCD)... my attempt to add value as-and-where capable.

Anyone in any supply chain or logistics trade will tell you that there are no experts and that learning on their fronts is evergreen and each instance co-exists with a series of activities - a life long firefight. The grass root, hands-on experience, if applied defensively, will only lend to pat-on-call excuses, ready-reckoners of sorts, to explain failure.

Food Production & market opportunity

From a talk at Thaifex 2013 - World of Cold-chain Conference

No one can deny that India’s food industry is undergoing massive transition and its intention of being a major player in the global supply of food.  In order to achieve this goal, policy makers are looking across the board at the daunting task at hand whilst recognising the need to also bring the agriculture sector in to the 21st century.

Yet it does not matter how good a product is, or how sophisticated or productive an agricultural area is, if a farmer or manufacturer cannot get their product to market or on the retail shelf… all their efforts turn out in vain.

Currently the progress in the food industry is quite uneven. The ever growing middle class with their specific demands, local and international food companies all wishing to meet those aspirational needs, the regulatory agencies making massive strides towards a complete overhaul of the food industry is all inextricably coupled to the struggling logistics infrastructure already pushed to the limits.

India-USA Bilateral Cooperation

Bilateral Cooperation between USA and India: Cold-chain & Agriculture.

The US Secretary of State, Mr. John Kerry is expected in Delhi in June 2013, to co-chair with our minister of external affairs Mr. Salman Khurshid, the fourth round of India-US strategic dialogue. The focus is bilateral cooperation and partnerships between the two nations and targets five principal pillars: 

•   strategic cooperation;
•   energy and climate change;
•   education and development; 
•   economics, trade and agriculture;
•   science and technology, health and innovation.

“Cooperation in Cold-chain and PHM (Post Harvest Management)” would automatically meld a few of these topics.

Custodians missing in the Cold-chain

Looking ahead into 2013, the expectations from market and service providers are quite obvious to conclude. The Previous year has established that manufacturers and marketers will continue to push to outsource both critical and non-critical areas in logistics to ease working capital pressure on their company.

Yet, are the LSPs prepared and professional enough to match this opportunity? It will require innovative organisational leadership in finance and operations. The typical response though, is to reduce head count and fixed warehouse & transportation assets while maintaining service (exactly what their client company did by outsourcing their own requirement). LSPs need to respond otherwise and not play in tandem. Besides, maintaining service with lowered asset base means opening up to risk, or alternately requires another kind of asset – technology! The smart ones will manage; there will be intelligent contingency plans, back-haul network redesigning, productivity realignments and a move from transactional to strategic management and control.

India’s logistics sector usually has a limited outlook when projecting into the future. This is largely because of the gap in associated infrastructure and matching processes, thereby never allowing them to be truly ahead of the development curve.

Future Direction Cold-chain In India

The cold chain industry is understood differently by various pronouncers of the trade. So at first, let us dispel a few notions in line with the intent of this article. Most people, including some of those driving this from within the government, presume the “cold chain” implies solely temperature controlled storage or carriage of goods. This automatically pre-supposes that the application of refrigeration is the singular differentiator.

The cold-chain is a much bandied about business proposition in India, attracting ever burgeoning attention over the past decade. It has typically been associated with securing national food supply, reducing wastage and with an energy intensive technology. Despite fetching increasing focus driven by the government, its ground manifestation stays limited.

In reality, the cold chain is a misnomer derived from “cold SUPPLY CHAIN”; and like any supply chain, the production process, packaging criteria and delivery & distribution mechanism is particular to the cold chain. Hence the benefits perceived from the cold chain are not just limited to those derived through application of cooling, but additionally those due to inherent procedural changes it enforces across the entire supply chain process.