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ICAR-DSR, Indore
Integration of Guar Supply Chain: Issues and Options
Purushottam SharmaSenior Scientist (Ag. Econ.),
Directorate of Soybean Research, Indorepurushottamji@gmail.com
NCDEX Guar International 2014 at Jaipur on 11.10.2014
ICAR-DSR, Indore 2
Next 15 minutes on ....
• Guar Supply Chain• Issues and options in Supply Chain
– Pre-production– Post- production
• Policy Related Issues• Strategies to integrate supply chain and boost
guar gum export
ICAR-DSR, Indore 3
Need for Integrated Supply Network for Agri-Produce
High delivery costs, caused primarily by a fragmented supply chain, inefficient logistics, together with poor standards are the common features of agricultural marketing system in the developing countries. In the present era of globalization & privatization• Competition no longer between firms but between supply
chains• Efficiencies of scale and scope the “buzzword”• Leads to shifts in the risk profile• Benefit to farmers as upgrading as chain actor, adding value
through vertical integration and developing partnerships/ ownerships, feedback to farmers to ‘grow what sells’
ICAR-DSR, Indore 4
Integrated Agri Supply Chain: Concept
An integrated supply chain provides access to knowledge, technology, finance, markets: leading to shared benefits
Market segmentation, consumers demand & low cost strategy -driving factors for supply chain collaboration
InputInfrastructure
Production and
Harvesting
Processing Infrastructure
Distribution and Export
ICAR-DSR, Indore 5
Guar Supply Chain: Pre-production
Chain Actors SupportActivity
Input Supply
Farmers
Dealer Network
RetailersFIG/ Producer
Company/ Contract Farming !!!
Res. Inst./Univ.- variety?? - seed??- agro technology- knowledge
Production
Seed Fertilizers Pesticides Inoculants
ICAR-DSR, Indore 6
Pre-Production: Issues and Options
Issues OptionsLow yield , high instability of APYRainfall dependence
Ensure availability of quality seeds , improve seed replacement rateProtective irrigation at critical stages
Low seed replacement rate
Increase availability of HYV seed
Low gum content and low viscosity varieties
High gum content and high viscosity varieties (like HG 365)Activate industry to fund R&D
Low agro-technology adoption
Popularize short-duration, drought, insect-pest resistant varietiesImproved crop production technology
ICAR-DSR, Indore 7
India’s share in total import of importing countries
Issues OptionsLow value addition
Development of HYVs / high viscosity for fasthydrating guar.
Technology Use of molecular breeding, biotechnology
Fragmented input supply chain
Integrate input supply chain along with support services
ICAR-DSR, Indore 8
Improved Guar Production Technology: Farmers knowledge
S. No.
Guar Production Technology Knowledge Score (%)
Knowledge Gap (%)
1 Soil testing 58 422 Improved variety seeds 68 323 Spacing 32 684 Seed treatment 18 825 Inoculation with culture 15 856 Nutrient management 52 487 Weed management 38 628 Plant protection measures 59 41
Source: Singh et. al. 2011
ICAR-DSR, Indore 9
Dependence of Guar Yield on Rainfall
1970-71
1972-73
1974-75
1976-77
1978-79
1980-81
1982-83
1984-85
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
2008-09
2010-11
2012-130
100
200
300
400
500
600
700
800
Guar Yield (kg/Ha)
June-Sept Rainfall (mm)
Rajasthan
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Guar area under diff yield levels in Rajasthan
Rajasthan Haryana Gujarat Punjab IndiaYield CV 54.1 31.4 39.4 22.7 35.7
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Low seed replacement rate
Seed Replacement rate in Rajasthan (%)
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
5.59 2.29 2.27 2.49 3.75 7.38
ICAR-DSR, Indore 12
Varieties and Seed
Guar Varieties ReleasedPeriod NumberBefore 1980 51980-1990 161990-2000 92000-2010 11
Varieties in Seed Chain (15)
Bundel Guar-3 (IGFRI-1019-1)Gaur Lathi (RGC-1066)Gaur Uday(RGC-1055)Guar Kranti (RGC-1031)HG-365HG 2-20HG-563Rajasthan Guar-1 (RGC-471)RGC-1002RGC-1003RGC-1017RGC-197RGC-936RGC-986Kanchan Bahar (M-83)
Source: DAC, MoA, GOI
ICAR-DSR, Indore 13
Potential yield of Guar
State IP FP Yield Gap I
State Yield
Yield Gap II
Area ('000ha) TE
2012-13
Higher potential
(Ton) at YG-1At 50% of
YG-II
Rajasthan 1067.6 833.8 233.8 297.8 769.8 3536 826729 13,61,070
Haryana 1394.0 1242.2 151.8 1255.2 138.8 286.3 43450 19,871
Total increased potential (Ton) 8,70,179 13,80,940
Average yield for the period 2004-2008
Yield Gap Analysis and Expected Production
ICAR-DSR, Indore 14
Guar Supply Chain: Post-Production
Chain Actors SupportActivity
Contract Farming
Commission Agent
Village Trader
Farmers
Wholesaler
Processor (Split/ Powder)
Farmer Groups/ Coop
AggregationWholesale
- APMC- AGMARKNET- News paper- TV/ radio- University
Animal Feed (2%-5%)
ICAR-DSR, Indore 15
Post-Production: Issues and Options
Issues OptionsLong chain (Lack of farmer-industry linkage)Assured Supply of Guar??
Promote contract farmingFarmers’ GroupsDirect procurement from farm place
Market information Market intelligence needs to be strengthened, disseminated to farmers
Transportation (high cost, Availability)
Farmers’ groups
Market fees, state entry tax (differ with states)
Needs to be harmonised
Market infrastructure Cleaning-grading units at markets
High price fluctuation Risk management- farm to export
ICAR-DSR, Indore 16
Pre-Production: Issues and Options
Agricultural Produce Market Regulation Act amended to include provisions for
- Contract farming
- Direct marketing
- e-trading
- Private markets
ICAR-DSR, Indore 17
Price Risk: Management
Year
Rajasthan (CV in %) Haryana (CV in %)
Sri Ganganagar Hanumangarh Fatehabad Hisar2003 26.5 17.4 7.7 24.72004 21.3 21.1 18.6 3.52005 10.2 8.6 8.3 8.12006 7.9 7.2 8.0 7.22007 5.5 5.9 6.7 6.92008 7.2 7.8 7.1 9.62009 20.9 22.0 21.5 20.22010 7.8 8.0 8.3 14.72011 29.4 36.1 29.5 25.42012 46.1 33.8 56.3 56.72013 29.1 28.3 23.5 56.6
Commodity futures as a platform for minimising price risk
- Guar spot price volatility decreased post-futures (Sen Committee Report, 2008)
- Awareness is required
- FIG/ Farmer Producer Companies can help farmers
Source: Sharma, 2011 & Yadav, et. al., 2013
ICAR-DSR, Indore 18
Guar Supply Chain: Post-ProcessingChain Actors SupportActivity
Processor
Splits Powder Churi/ Korma
-R&D- Processing- Products- Market intelligence
Processing
Export
Animal FeedCompany
Trader/ WholesalerExporter
Farmers/ Dairy Owners
Retailer Animal Feed
Domestic Industries
-R&D-Transport-Containers-Testing-Export Support
Processing/ Export
ICAR-DSR, Indore 19
India’s share in total import of importing countries
Country2006 2007 2011 2012
CompetitorsQ V Q V Q V Q V
USA 87.1 69.6 85.0 68.2 95.1 94.5 95.2 96.5 Pak, China, Spain, Nether, Italy
Canada 40.9 22.7 37.7 21.7 37.9 33.8 42.9 56.6 US, China, Pak, Italy, Spain
Germ 80.1 40.8 80.2 44.9 72.4 56.4 68.7 59.9 Spain, Switzer, Italy, Pak, Fr, UK
Aust 77.0 54.5 71.2 46.2 83.8 72.2 86.1 89.0 Spain, Pak, US, Italy,Switzer, China
Italy 58.0 26.1 65.1 31.0 88.3 72.5 82.6 61.0 Pak, Germ, Belgium, Spain, Fr, UK
China 66.0 37.5 57.5 36.4 45.5 30.4 45.1 37.3 Pak, US, Spain, Italy, Morocco
Japan 24.6 7.9 25.3 10.3 28.6 17.9 21.5 20.0 Pak, Spain, Denmark, US, Italy
Russia 13.0 6.3 17.9 37.0 52.9 40.7 54.3 44.7 US, Germ, China, Pak, Denm, Spai
Denm 33.6 8.8 36.4 8.3 26.5 11.1 30.0 26.2 Spain, Pak, Pourtg, Nether, Germ
Nether 51.8 30.0 36.7 18.2 36.0 31.6 42.4 43.9 Germ, Sweden, US, UK, Belgium
France 41.0 11.1 40.2 11.1 39.5 21.4 28.1 18.9 Italy, Morroc, US, Spain, Germ, UK
Q= Share in Import Quantity (%), V= Value share (%)
ICAR-DSR, Indore 20
India’s export mix and price relation
Year% Splits
(Qty)% Splits
(Val)% Powder
(Qty)% Powder
(Val)Split/Powder Price Ratio
2006-07 21.8 17.2 78.2 82.8 0.742007-08 31.2 27.2 68.8 72.8 0.822008-09 24.5 19.3 75.5 80.7 0.742009-10 18.2 14.6 81.8 85.4 0.772010-11 20.7 17.7 79.3 82.3 0.822011-12 16.3 11.7 83.7 88.3 0.682012-13 21.3 16.0 78.7 84.0 0.712013-14 17.6 13.0 82.4 87.0 0.70
ICAR-DSR, Indore 21
India’s share in total import of importing countries
Issues OptionsLow value addition
Industry, cess on guar export to fund R&D. Hydrolysed guar for dietary fibre use.Cationic guar for personal care use.Hydroxypropyl guar for construction, personal care,oil field uses.Removal of odour of guar meal and its use as a proteinsupplement for human consumption.Research – industry linkage to be strengthened.
Gap in process / technology for value-added products.
Import or develop process and technology.Establish techno centre to identify and make available the cost-effective and latest technology technology for processing.Export promotion council to assign techno-studies.
ICAR-DSR, Indore 22
India’s share in total import of importing countries
Issues OptionsCertification for export Certification Lab in processing area
New applications, action plan
R&D for development of new products and itstechnology, capacity building industry for food safety aspects.
Shortage of trained manpower in industry
Develop trained manpower by imparting technicaltraining.
Whole-of-the-chain industry body
R&D institution looking all aspects (right fromproduction to export) of guar.
Export policies Policies to encourage export of value- added products & discourage exporting intermediate products.Special assistance for adoption/ import of advanced processing technology.
ICAR-DSR, Indore 23
Enabling Factors of Guar Supply Chain
Key Enabling Factors of Guar
Supply Chain
Key Enabling Factors of Guar
Supply Chain
MonsoonMonsoon
Availability, price and quality of seed, inputs
Availability, price and quality of seed, inputs
APMC (Mandi)
APMC (Mandi)Policy and regulation
effectiveness
Policy and regulation
effectiveness
Processor- Ability to process and market
Processor- Ability to process and market
Logistics management
and efficiency
Logistics management
and efficiency
Research Information flow
ICAR-DSR, Indore 24
The Road Ahead…
Develop a R&D centre as the centre of excellence for Guar: • Collection and dissemination of information,
• Promoting usage of Guar and its derivatives,
• Development of processing technology according to changing market demand and food safety concerns
• Development of value added products.
• Have R&D facilities and pilot plant/ machinery for trial production of value added derivatives of Guar.
• Have facilities and authority for quality certification.
• Capacity building of small and medium enterprises in guar processing on the lines of growing food safety concerns.
Develop a R&D centre as the centre of excellence for Guar: • Collection and dissemination of information,
• Promoting usage of Guar and its derivatives,
• Development of processing technology according to changing market demand and food safety concerns
• Development of value added products.
• Have R&D facilities and pilot plant/ machinery for trial production of value added derivatives of Guar.
• Have facilities and authority for quality certification.
• Capacity building of small and medium enterprises in guar processing on the lines of growing food safety concerns.
ICAR-DSR, Indore 25
Further actions
Industry Association: How you can support farmers to stabilize yield, achieve
higher productivity, minimize post-production costs, and sustainability.
Access to processing technology: industry specific products
Research – Industry collaboration for higher and sustainable productivity and for processing
Industry Association: How you can support farmers to stabilize yield, achieve
higher productivity, minimize post-production costs, and sustainability.
Access to processing technology: industry specific products
Research – Industry collaboration for higher and sustainable productivity and for processing
ICAR-DSR, Indore 26
Guar
Greatest
Untapped
Agricultural
Resource
ICAR-DSR, Indore 27
Thank youThank you
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