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The Wall Street Journal
How to Solve India’s Huge Food Wastage
India is one of the world’s largest producers of fruits and vegetables, but a third of its produce rots because of poor storage, transport and distribution. India Real Time asked the chief executive of the Council of Supply Chain Management Professionals what could be done to reduce waste.
By Biman Mukherji
Bundles of radish at a vegetable market near Jammu, Nov. 11. Channi Anand/Associated Press
India is one of the world’s largest producers of fruits and vegetables, but a third of its produce rots because of poor storage, transport and distribution.
The lack of cold storage and infrastructure is one of the main reasons why food prices have spiraled in recent months and food inflation remains stubbornly high with wholesale inflation at 18.2% on food. The country’s inability to preserve what it produces, or transport it at speed also means India is also not a significant player when it comes to exporting fruit and vegetables.
The Wall Street Journal asked Rick Blasgen, president and chief executive of the Illionois-based Council of Supply Chain Management Professionals, the world’s largest body of supply chain professionals, what India could do about these problems, which have deterred global companies from investing here despite the large consumer opportunities.
Edited excerpts:
The Wall Street Journal: What are the main challenges in India’s supply chain of food?
Rick Blasgen: Well most of it centers around infrastructure. The congestion in infrastructure makes it very challenging. It is much better when you have large-scale modern infrastructure. Cold chain is the most important. Then you have to have a transportation outlet. Western Europe may be a very good example for India, where the highway system and railway system are very efficient. When you have that many people as in India, it represents a challenge and an opportunity.
WSJ: What should India do to prevent the colossal wastage of fruits and vegetables ?
Mr. Blasgen: It is critical to improve the cold-chain infrastructure. Then, a lot has to be done by the government. For example, road connectivity from ports is poor. India can rely on third-party providers, who know how to bring the infrastructure. That knowledge exists. The infrastructure has to built by developing small islets. That will also bring business into the country. The Chinese government has built railways and roads, although they have the same challenges as India. They have also built large ports where ships can easily come and go. Of course, China is not a democracy like India, and if the government decides to do something, they just go ahead and do it.
WSJ: Why have global companies refrained from investing in India’s supply chain despite the large market?
Mr. Blasgen: Companies have refrained from investing here because of taxation issues and difficulties in understanding the government procedures. Different states have different levels of taxation on things such as transportation. A uniform taxation policy should help. Many of the roads are not paved and it takes time to cross from the north to south, east to west. You need super highways connecting cities and also a robust railway system. India can learn a lot from Singapore on how goods come and go out of the country.
WSJ: What steps has your organization been taking to help India’s infrastructure and what are the changes that you have noticed over the years?
Mr. Blasgen: We have conducted many educational programs to help educate and discuss opportunities in India, certainly infrastructure is always a major topic. For instance, in India’s new food security law proper training in the use of technology will prove to be a game changer transforming the prospects of the nation as a whole.
India needs a cutting edge logistics and supply chain training that goes beyond removing barriers on lack of proper training to professionals and entrepreneurs in supply chain and continuously supports and updates them.
How to Solve India’s Huge Food Wastage
India is one of the world’s largest producers of fruits and vegetables, but a third of its produce rots because of poor storage, transport and distribution. India Real Time asked the chief executive of the Council of Supply Chain Management Professionals what could be done to reduce waste.
By Biman Mukherji
Bundles of radish at a vegetable market near Jammu, Nov. 11. Channi Anand/Associated Press
India is one of the world’s largest producers of fruits and vegetables, but a third of its produce rots because of poor storage, transport and distribution.
The lack of cold storage and infrastructure is one of the main reasons why food prices have spiraled in recent months and food inflation remains stubbornly high with wholesale inflation at 18.2% on food. The country’s inability to preserve what it produces, or transport it at speed also means India is also not a significant player when it comes to exporting fruit and vegetables.
The Wall Street Journal asked Rick Blasgen, president and chief executive of the Illionois-based Council of Supply Chain Management Professionals, the world’s largest body of supply chain professionals, what India could do about these problems, which have deterred global companies from investing here despite the large consumer opportunities.
Edited excerpts:
The Wall Street Journal: What are the main challenges in India’s supply chain of food?
Rick Blasgen: Well most of it centers around infrastructure. The congestion in infrastructure makes it very challenging. It is much better when you have large-scale modern infrastructure. Cold chain is the most important. Then you have to have a transportation outlet. Western Europe may be a very good example for India, where the highway system and railway system are very efficient. When you have that many people as in India, it represents a challenge and an opportunity.
WSJ: What should India do to prevent the colossal wastage of fruits and vegetables ?
Mr. Blasgen: It is critical to improve the cold-chain infrastructure. Then, a lot has to be done by the government. For example, road connectivity from ports is poor. India can rely on third-party providers, who know how to bring the infrastructure. That knowledge exists. The infrastructure has to built by developing small islets. That will also bring business into the country. The Chinese government has built railways and roads, although they have the same challenges as India. They have also built large ports where ships can easily come and go. Of course, China is not a democracy like India, and if the government decides to do something, they just go ahead and do it.
WSJ: Why have global companies refrained from investing in India’s supply chain despite the large market?
Mr. Blasgen: Companies have refrained from investing here because of taxation issues and difficulties in understanding the government procedures. Different states have different levels of taxation on things such as transportation. A uniform taxation policy should help. Many of the roads are not paved and it takes time to cross from the north to south, east to west. You need super highways connecting cities and also a robust railway system. India can learn a lot from Singapore on how goods come and go out of the country.
WSJ: What steps has your organization been taking to help India’s infrastructure and what are the changes that you have noticed over the years?
Mr. Blasgen: We have conducted many educational programs to help educate and discuss opportunities in India, certainly infrastructure is always a major topic. For instance, in India’s new food security law proper training in the use of technology will prove to be a game changer transforming the prospects of the nation as a whole.
India needs a cutting edge logistics and supply chain training that goes beyond removing barriers on lack of proper training to professionals and entrepreneurs in supply chain and continuously supports and updates them.