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The Farm-to-Fridge Value Chain: Participants’ Roles and Driving Productivity through Technology Interventions

Mohua Banerjee and Suneel Kunamaneni

No 296765, Agri-Tech Economics Papers from Harper Adams University, Land, Farm & Agribusiness Management Department

Abstract: The value chain of the Indian dairy industry consists of dairy farmers, collection centres, chilling centres, processing plants, retailers and consumers. The objectives of the study are to map the processes and operational challenges existing in the dairy value chain, estimate profitability of the participants at the farm-levels to gauge their potential in undertaking entrepreneurial initiatives, study roles of the privately-owned processing plants in the supply chain, and identify business models of startups in the dairy ecosystem who drive productivity through technology interventions. Exploratory research through multiple field visits, in-depth interviews and personal observations in West Bengal (eastern India) and Bangalore have formed the basis of this study. Using case study format, the roles of the different intermediaries in the value chain have been analysed to develop insights on their entrepreneurial abilities and intent. The findings reveal the largely fragmented, unorganized dairy industry where the channel members majorly operate in silos with linkages only to their immediate backward and forward partners, in a myopic manner. At the farm level, only the chilling centres have sufficient profitability to undertake value-adding entrepreneurial initiatives. The marginal dairy farmers are at subsistence level and hence unable to participate in value creation. The private processing plants are corporate entrepreneurs and their interactions with chilling centres are confined to that of supplier-manufacturer, to ensure seamless supply of milk for their manufacturing processes. They do not engage with the small dairy farmers. In these circumstances, new-age start-ups that create social impact while operating as a viable, for-profit organization, effectively bridge the gaps in the dairy value chain by intervening at all its nodal points and providing technology solutions to create additional value. Farmers are at the core of the dairy processes as they produce the milk and any improvement in the value chain ultimately gets back to the farmer through better prices and better market linkages.

Keywords: Agricultural and Food Policy; Farm Management (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr
Date: 2019-10-21
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Persistent link: https://EconPapers.repec.org/RePEc:ags:haaepa:296765

DOI: 10.22004/ag.econ.296765

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