Introduction

Better forward-backward linkages are a critical aspect of doubling farmers' income in India which at present is being pursued in mission mode by the government of India. One of the areas in this context is logistics cost. Logistics operate at both upstream and downstream level in agriculture and can ensure better management and operationalisation of value chain in agriculture. Ranked 44 in the World Bank Logistics Performance Index 2018, logistics costs in India are 13-15 per cent of the product cost, while the global average is six per cent. The Government has taken a number of steps to reduce the distribution logistic cost in farming which will help increase farmers' income and outreach.

Recent Government Initiatives

• The Government has implemented the policy for reimbursement of freight subsidy for distribution of subsidized fertilizers through coastal shipping or/and inland waterways. 
• In order to make timely availability of certified/quality seeds at affordable price to the farmers of hilly/remote areas of North-Eastern States including Sikkim, Himachal Pradesh, Jammu & Kashmir, Uttarakhand and hilly areas of West Bengal, Transport Subsidy on Movement of Seeds is provided under Sub-Mission on Seeds & Planting Material (SMSP).
• As per Union Budget Announcement, 2018-19, Government has announced for development and upgradation of existing rural haats into Gramin Agricultural Markets (GrAMs). This will provide farmers facility to make direct sale to consumers and bulk purchasers which will reduce the logistic cost.
• The Government is providing support to farmers for development of agricultural marketing infrastructure in the country through the scheme of “Agricultural Marketing Infrastructure (AMI)”, which is a sub-scheme of Integrated Scheme for Agricultural Marketing (ISAM). Under AMI Scheme, Refrigerated Van as a transport vehicle is eligible for subsidy assistance for Integrated Value Chain (IVC) projects.
• Mission for Integrated Development of Horticulture (MIDH) provides assistance for development of post harvest management and marketing infrastructure such as cold storage facilities, ripening chamber, pack houses, reefer vehicles to farmers to improve marketability of their produce.
• Further, in order to develop the infrastructure in farming sector including that of distribution logistics, the Government is implementing Rashtriya Krishi Vikas Yojana-Remunerative Approaches for Agriculture and Allied Sector Rejuvenation (RKVY-RAFTAAR) Scheme.
• Government has introduced National Agriculture Market (e-NAM) scheme wherein trading of agriculture and horticulture commodities is carried out by transparent price discovery method for produce of farmers through competitive online bidding system. A logistic module has been provided on e-NAM platform to provide efficient logistic facility for inter-mandi and inter-state trade on e-NAM platform.
• The Government has formulated and released model Agricultural Produce and Livestock Contract Farming & Services (Promotion & Facilitation) Act, 2018 which will facilitate reduction in supply chain for optimizing logistics.

Way Forward

India is now one of the fastest growing economies of the world, and is seeking superior logistics linkages with nations all over the world. The 2019 Economic Survey further put the strategic importance of logistics into perspective: "The Indian logistics industry, worth around $160 billion, has grown at a compound annual growth rate of 7.8 per cent during last five years. Improving logistics sector has huge implication on exports and it is estimated that a 10 per cent decrease in indirect logistics cost can increase 5-8 per cent of exports. With the implementation of Goods and Services Tax (GST), the Indian logistics market is expected to reach about $215 billion in 2020, growing at a CAGR of 10.5 per cent," the Survey states. A better performing logistics sector, it added, would also enable India to become an important part of the global supply chain and help generate better income across sectors thus being helpful in generating better incomes for the farmers.