Supply Chains of Commodity Products in India: The Case of Rice

Deepti Dewani (Delhi Public School, Dhamtari, India), Shreyansh Jain (Jagadamba Paddy Processing Private Limited, India) and Sumeet Gupta (Shri Shankaracharya Institute of Technology and Management, India)
Copyright: © 2012 |Pages: 115
EISBN13: 9781466617025|DOI: 10.4018/978-1-4666-0065-2.ch005
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Rice is one of the major commodities produced and consumed in India. India is also home to one of the finest varieties of rice sold under the name of Basmati. The State of Chhattisgarh is considered the Rice Bowl of India as it is one of the largest contributors to paddy production in India. Around 3 million families subsist on farming in Chhattisgarh, out of which, 1.522 million families are small farmers (owning less than 2 hectares of land). The Government of Chhattisgarh procures paddy in Chhattisgarh on behalf of Government of India. This scheme benefits about 1 million farmer families by procuring about 3 million metric tons of paddy in the Kharif Marketing Season (KMS) of a year, spending about 600 Million US Dollars. The procurement takes place through about 1333 Primary Agricultural Societies in the whole state covering geographical area of 135000 sq. km. The paddy procured is converted into rice by millers after entering into an agreement. Rice is then handed over to Chhattisgarh State Civil Supplies Corporation to use it in another important scheme for providing food security to the poor. The supply chain of rice production is very simple. It is harvested in the form of paddy from the field and sold to the millers who then process the rice. The processed rice is then sold to the market. Although simple, there are a number of inefficiencies present in its supply chain. This case familiarizes the readers of the distribution system of rice, various government policies in its distribution system, and the issues that need to be addressed in a typical distribution system of rice. The case also urges the readers to mull over how these inefficiencies can be overcome with the latest supply chain management techniques so as to make its distribution efficient and cost effective.
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