Catalysing Rural Agribusiness & Enhancing Consumer Welfare - Augmenting Supply Chain Mechanisms in Rural Retailing
Keywords:
rural, agribusiness, retail, supply chainAbstract
To succeed a business enterprise depends on competent supply chain management besides other aspects like marketing, quality, cost etc of products. India still faces major hurdles in the last mile distribution segment, especially in the rural areas where approximately 70% of the Indian population lives. It is one of the leading agricultural economies of the world, which accounts for 30% of GDP. Our production of 137 million tonnes of fruits and vegetables is one of the highest in the world. However, we add value to only about 2 % of our produce, as the food supply chain is very fragmented, unorganized, complex structurally and there is high level of wastage. Avoidable supply chain costs (wastage, excess inventory and excess transportation costs) in Indian Food and grocery sales is estimated to be about INR1 trillion (USD $ 24 billion). This is about 50 percent of total operating costs. These problems not only have an impact on the producer but also affect the consumer. This paper reviews the issues faced by the rural agribusiness and rural retailing.
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