Need for farm-to-market roads
Over the last 20 years, with an exceptional rise in the size of the world’s population and demand for food, the amount of agricultural produce and food products transported by road has also doubled. The globalized settlement pattern of people has further added to the number of kilometers travelled by agricultural products and food.
Apart from the disasters brought by floods and natural calamities, the farm-to-market roads network in Pakistan, involving supply chain processes and technologies, has always received a disproportionate share of attention.
Globally, international retail chains are engaged in seizing opportunities to green the supply chains. This is being done by reducing transportation and logistics costs and marketing this value to the customers. In addition, the international retail sector is supporting the local growers by sourcing key items from local producers.
This is linked with transportation efficiency which complements local sourcing models where just-in-time seasonal deliveries and shorter transportation routes eliminate product shrinkage and costs.
Moreover, better transportation is a common means of cost reduction for the farmers and also for each component in the cycle. Better feeder roads or highways may reduce the cost of moving produce from the farm to the consumer but most importantly, the benefit realized is distributed among farmers, truckers and consumers.
Historically, agrarian sensibilities have paved the way for the modern-day trucking industry, providing sustenance to the local supply chain and acting as a stimulus for economic activity. This logistics component is no less important, as it leads to improved marketing of farm products. With efficient transportation, the products are sold at a time when prices are more favourable.
A grain storage project is essential in this regard, to hold grain from the harvest period, when the price is at its seasonal low, until late in the year when the prices have risen. The benefit of storage investment emanates from this change in temporal value.
Other projects may include investment in trucks and transport equipment to carry products from the local area where prices are low to distant markets where prices are higher. For example, the Fruit and Vegetable Export Project in Turkey included provision for trucks and ferries to transport fresh produce from southeastern Turkey to outlets in the European Common Market. The benefits of such projects flow from the change in ‘locational value’. Similarly, Pakistan can also benefit from such ‘locational value’ by placing the required logistics network and fully benefit from the partnership of neighbouring regional markets.
To meet this objective and ensuring that the farmers receive a larger part of the increased value arising from marketing projects, formal structures must be ensured. It is also important to reduce monopolistic power of the marketing firm to benefit the farmer. By building storage at farms and inviting facilitation from the private sector, farmers can receive a larger share of the profit. It should not be considered as a loss to the market but a strength for the primary producer.
Another cost reduction strategy in agricultural projects is investment in agricultural machinery to reduce labour costs. These include tube wells substituting hand-drawn or animal-drawn water, pedal threshers replacing hand threshing, or tractors replacing draft animals. In this case, the total production may not increase but a benefits would come from cost reduction.
In order to strengthen the agriculture economy of the country, experts suggest the following modern changes in the farm-to-market logistics:
Clustering – Combining farm activities to prevent the spatial scattering of primary production, processing and distribution of agricultural produce. Besides minimizing the need for transport, clustering will also promote the development of industrial ecology by providing companies with opportunities to re- use each other’s by-products. Reducing the movement of plants and animals will greatly reduce the risk of disease being spread.
Connectivity – Combining transport links used for the supply of raw materials between clusters and those used for the removal of products and by-products. These combined fast supply lines require fewer kilometers per vehicle and offer the opportunity to deploy other means of transport such as trains, boats or pipelines.
Directing – The direction, management and organization of agricultural product flows must adopt modern information and communication technologies. Technology has opened up new ways of cooperation, thus improving not only efficiency but also food safety