Farm 2 Fork - Inland water transportastion in India - ManiGR
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This document discusses opportunities to develop India's inland waterways and coastal shipping sectors. It notes that China has significantly outpaced India in exploiting its waterways for transportation and trade. To catch up, the document argues that India needs a clear vision and infrastructure investments to connect agricultural production areas ("Farm") to end consumers ("Fork") via water-based transportation. It also advocates for public-private partnerships and a focus on inclusive growth and reducing food waste throughout supply chains. The document provides examples from India and China and recommends policy actions for the Indian government to develop its coastal shipping and inland waterway industries.
Farm 2 Fork - Inland water transportastion in India - ManiGR
- 1. What if .Farm 2 Fork Imagining possibilities in: Inland waterways, Coastal shipping and Hinterland Connectivity ManiGR 1
- 2. Sagarmala Plan and Bharat mala Plan Takeoff? Heralding port-led development in India Tepid and lukewarm! Inland and coast shipping - not exactly buzz words! The Union Minister for Shipping, Mr. Nitin Gadkari has put in a lot of efforts 2 However - There appears to be some reservations amongst stakeholders
- 3. Historical Perspectives of countries China vs India India and China until 17th Century and entry of European countries into South East Asia a continuous and a rich history dating back many thousands of years. Both countries were technologically advanced and were the richest nations on earth. China (25% of world GDP) and India (35% of the world GDP) India was most dominant naval power in the far east even more powerful than China! 3
- 4. Chinas inland water ways Traffic: 850 000 000 t/year Facts of importance: Longest water transportation network. The Yangtze & Pearl River Delta: has a very important economic position in China Navigable rivers: 110 000 km (Yangtze 6418 km with 3000 km suitable for navigation by vessels). 4 Chinese leadership have always been people who had certifications in Hydrology & River engineering!
- 5. Length: More than total navigable length is 14,500 km, 5,200 km of the river and 4,000 km of canals Traffic: About 70,000,000 tons/year Navigability: To be optimized Facts of importance: Not very popular in the country. 5 Indias inland water ways Only 3% of transportation traffic is presently being handled by inland waterways. Indias logistics cost is highest at 15% to 18%! In China the logistics cost is 9%! In Europe & USA logistics cost is 11% Huge opportunity - Reduce Logistics costs
- 6. PESTEL analysis model Aim: Determine the external and internal environments factors affecting India and China. 6 Political factors are basically how the government intervenes in the economy. Economic factors affect how businesses operate and make Social factors include the high trends in social factors affect the demand Technological factors can determine barriers to entry, minimum efficient production level Environmental factors include ecological and environmental aspects such as weather, climate Legal factors include discrimination law, consumer law, antitrust law, employment law
- 7. 11/10/2018 7 China PESTEL Model Political: SEZ, Power generation, low cost mode Economic: Tax and Tariff, Financial Banking system Social: Fashion oriented and Impulsive buying behavior Technological: Huge industry, Close to maritime clusters Environmental: Increasingly stricter Legal: Lots of efforts put in place.. Robust system in place
- 8. 11/10/2018 8 Political: Competing modes Rail and road are doing better; Under developed infrastructure. Economic: Higher cost of capital, high cost structure, policy structural framework are on the Anvil.. Social: Investment of money is happening but some doubts exist Technological: Work in Progress (WIP), No maritime clusters nearby Environmental: Policy frameworks on the ANVIL Legal: Lots of efforts put in place.. India PESTEL Model
- 9. A new approach is required if Indias is to up its ante and come up with a plan to leap frog over China: 1. Achieving an 8% GDP growth requires an investment of about 32% of GDP. 2. Under Bharatmala and Sagarmala there are good intentions on the ANVIL. 9 Conclusion PESTEL comparison model 1. China is way ahead in exploitation of waterways 2. China is looking at moving from 47% towards 65% of whole trade being moved along its rivers 3. Chinas initial investments in infrastructure has paid of off handsomely A clear inter-ministerial vision: Connectivity enablers - Farm to the Fork. Higher purpose vision - shipping + shore industries to Imagining and visualising possibilities! Business to Business (B2B)concept Business to customers (B2B2C)concept! Inclusive growth - working at BASE OF THE PYRAMID
- 10. Creating inclusive growth Development an Inland waterway 10
- 11. Blue Ocean strategy Paradigm Change required for the sector?? 11/10/2018 11 Is it time to change our paradigm???? Thinking loudly, Out of the box & Unorthodox approach??? Change from B2B to B2B2C Will this help???
- 12. Stakeholder mapping Farm to Fork 12 MNCs Farmers Mandis wholesalers processorTransporters Micro financing institutions
- 13. Negative impacts of food loss - Social, Environmental and Economic In India, estimates of food loss range between 10% and 40%. Devastating impact on smallholder farmers. Globally, up to 1.3 billion tons of food is lost or wasted each year around the world, In 2007, the total economic cost of food loss and waste was estimated at US$ 750 billion!!! 13 The more profitable a crop - all stakeholders benefit! Three main levers exist to improve economic efficiency of agricultural value chains: - Reduced volatility of supply and prices, - Increased end-market prices and - Reduced costs.
- 14. Drive Demand - Micro economic support for infrastructure creation 14 An inter-ministerial team Matrix team with Ministry of Transport (Similar to UADAI project) Virtuous cycle of improvement linking Helping to connect the dots in food chain Business opportunity to do well for the MNCs. Demand side can be filled by: B2B - contracts between barge/vessel and cargo owners B2B2C MNCs working in agrichain create demand drivers FMCG industry, participate in the food chain by providing incentives. Companies like HLL, Godrej, ITC etc.. .. Already involved in the Farm to Fork. Inland waterways can create the SUPPLY side infrastructure
- 15. Anti inflation control measure Floating warehouses Concept of floating warehouses across inland rivers and waterways: Connecting and supply and sources of agricultural chains with consumption points Regular timetabled - barge movements Consistent availability of infrastructure - hinterland connectivity Multimodal hubs Protection against trucking and railway lobbies creating hurdles Inflation control lever with government 15
- 16. Base of Pyramid Inclusive growth with Maritime supply chain 16 Private-sector investments - better logistics, improved technology and capacity building Modernization - MNCs put on their Innovation and technology - thinking cap (find alternative opportunities). New lens of inclusive capitalism - MNCs. Prospective rewards include growth, profits, Bottom of the Pyramid lifting billions of people out of poverty and desperation. Creation of micro financing institutions... (key govt initiative) Improving communication and trust between stakeholders Eliminating bottlenecks in the Value chain Reduction in food loss and putting in place inclusive capitalism
- 17. Develop supply chain for individual commodities Cost Price Index (CPI)/ Wholesale Price Index (WPI) 11/10/2018 17 Government could look at individual : Choose individual on individual commodity chains - WIN- WINs for all stakeholders Overt period of time more commodities get addressed.. The farm losses and Value chain losses go down from 40% to less than 10% Inflation/spike in commodity price Leashed/reined in!! Help connect the dots in the individual commodities supply chains Create jobs for local communities. Create and micro financing setups to facilitate small farmers. Use Skill India to create sustainable jobs for all.
- 18. Replicating success - implementing lessons learnt 18 Case Study I: CONCOR - Fresh & Healthy Enterprise Ltd (FHEL) Earlier 30 to 40% of crop wasted Poor harvest mgmt. Associated logistics Many Intermediaries in the chain Now with FHEL Cold storage facilities Eliminating intermediaries in the Mundis. Connecting road transport and rail connectivity. Provision of nutrients for sowing and growing advisory services Marketing and further sales and transport across all demand points in India and abroad!! Government agencies -serious enablers Trade and Demand creation Connect production points with national and international demand points
- 19. 19 Case Study II: GINFED Earlier Lack of economies of scale. Transportation and Associated logistics Many Intermediaries in the chain Distress sale due to lack of marketing channel Lack of micro finances Now with GINFED (Fair prices for farmers) Provisions Cold storage facilities Eliminating intermediaries in the Mundis. Reduced transportation cost & Connecting road transport and rail connectivity. Provision of nutrients and Sowing and growing advisory services Marketing and further sales and transport across all demand points in India and abroad!! Replicating success - implementing lessons learnt
- 20. Coastal shipping Value creation 20 Real estate and land availability ashore is very expensive: Govt - Set of floating Mundis in offshore waters Reduce the loss - the rodent menace Private and government backed storages/ warehouses MNCs could be used to participate in warehousing for various industry segments. Buffer against inflation Hedge against shortages Multimodal hubs Slowly, but surely, Indias congested highways are pushing companies to opt for coastal shipping to transport commodities!
- 21. Areas needing government attention 21 Regulatory A comprehensive National Policy/Act on Coastal Shipping Broadcasting provision of Cabotage Flexibility to access international insurance markets Fiscal Adoption of tonnage tax regime Enhanced depreciation rates Allied Industry status to Coastal Shipping Dedicated berths at ports for coastal vessels Simplification of customs procedures Rationalization of Sales/Lease/Service tax Imperative Action Sought! Need for Government to take a pragmatic approach to issues pertaining to coastal shipping Outline a policy framework - Create level playing conditions.
- 22. Summary 22 There is huge opportunity to turbocharge Indias economy in the coming years. Industry stakeholders need to join hands with government to vitalize the inland waterways and coastal shipping. Author is sure that the government will look at this opportunity as Farm to Fork. Structural and infrastructural changes are required to be put in place in steady and fast pace. This will create the Buzz around coastal shipping, inland waterways and create opportunities for MNCs to participate in the Value chain. This will help India catch up with China by 2035 at the latest! A grand vision to leapfrog over China will revitalize the Indian maritime sector!
- 23. Disclaimer & Bibliography The views on the subject matter are purely the personal views of the author and do not in any way reflect any organizations view on the subject matter 11/10/2018 23 Bibliography: Comparative Analysis of Maritime Infrastructures PINE Prospects for Inland Navigation in Enlarged Europe Bains Report Enabling Farm to Fork The Fortune at the Bottom of the Pyramid - CK Prahalad Michael Porters Five Forces Analysis in Shipping Industry - Bangladesh Trade and shipping agreements Efficient Hinterland Transportation The Worth and the Significance of Port in Economic Integration Development Model: A Case Study on Yangtze River Economic Belt China Viability of Inland Water in India - Rangarajan and Raghuram Port sector and outlook Water Resources Development models - Myanmar study 2014dec Inland Waterborne Transport - Connecting countries IBEF - Ports-June-2017 Meet the 2020 Chinese Consumer - McKinsey Consumer & Shopper Insights 2012 INDIAN COASTAL CONFERENCE GESCO presentation - 15 December
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