Market Infrastructure Essay

Market Infrastructure

The inadequate infrastructure for storage, sorting, grading or post-harvest 
management and the reluctance of the private sector to invest in logistics or infrastructure under the current prevailing conditions are major problems faced by the food sector. The stressed infrastructure in the power and irrigation sectors and outdated marketing arrangements also seen as a result of ‘infrastructure bottleneck’ experienced in developing countries like India. The most important consequence of lack of infrastructure is wastage. Around 7% of food grains, 30% of fruits and vegetables and 10% of spices are lost before even reaching the market. This is attributed to lack of proper handling (cleaning, sorting, grading and packaging)

In India, the high value supply chain is very complex and the infrastructure linking each stakeholder (farmers, wholesalers, retailers, distributers) is weak. The sDirectorate of Marketing and Inspection (DMI) studies revealed that Costs and Margins because of inadequate infrastructure account for 30 to 35 per cent of consumer’s price in food grains, 45 to 55 per cent in fruit and vegetables and 12 to 36 per cent in oilseed crops. Substantial investments are required for the development of markets, post harvest and cold chain infrastructure to avoid the overall increase in food prices.

For Specialized Commodities- like fruits, vegetables, livestock and produce, fisheries- the Task force on Development of Cold Chain Development recommended an investment of Rs.8150 crores for various infrastructures to prevent the wastage of perishable commodities in a food supply chain.

According to the International Food Policy Research Institute (Washington, USA) studies, poverty reduction and acceleration in economic growth are the higher due to road construction than irrigation, watershed development and education, despite that almost half the villages are still not connected by

Centralized food distribution system needs procurement and storage. A centralized well-managed procurement and storage is useful for preventing crisis during extreme situations like famines. However, it will require proper infrastructure to be built, mostly, warehouses, specialized vans, cold storage, specialized ports (aiports and seaports) and food processing plants with provision access special railway racks for swift distribution. The necessity to develop the post-harvest storage technology and food processing technology isn’t limited to it. In India, we process less than 3% of fruits and vegetables while wastage accounts for 20%-30%. Basic food processing and warehousing incentives should be provided, especially in the private