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6) The Food Processing Industry in India suffers from long and fragmented supply chain. Can contract farming provide plausible solution to this problem? Discuss.(250 words)

Topic– Part of static series under the heading – “Food processing and related industries in India”

6) The Food Processing Industry in India suffers from long and fragmented supply chain. Can contract farming provide plausible solution to this problem? Discuss.(250 words)

Key demand of the question

The question expects us to bring out the issue faced by food processing industry on account of inefficiencies in its supply chain. Thereafter, we need to discuss how contract farming can help in issues related to supply chain and help the food processing industry grow.

Directive word

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer

Introduction – Explain the status of food processing industry in India

Body

  • Discuss the issues related to supply chain and the lack of forward and backward linkages. Explain the problems that it causes for the food processing industry.
  • Explain what contract farming is – Contract farming can be defined as agricultural production carried out according to an agreement between a buyer and farmer thus establishing conditions for the production and marketing of farm products.
  • Discuss contract farming can help resolve the inefficiencies of food processing industries
    • Assured Supply resulting in a better control over the factors of production.
    • The contract farming can aid the food process industry to encourage, incentivise and support farmers to enhance the quality of the crops. Thus assuring an enhanced quality of the input
    • Elimination of canalisation and cartelisation due to APMC act will aid in decreasing the cost of raw materials etc

Conclusion – Highlight what needs to be done and how contract farming can be promoted.