5 Biggest Challenges In Sourcing & Procuring Agri-Commodity
The agri-food supply chain has been and remains intricate with its complex network of stakeholders who cater to diverse segments within the agri-ecosystem. Among them, actors involved in sourcing and procuring agri-commodities play an indispensable role in connecting farming communities with food processing companies around the world and ensure that the best quality raw materials reach the manufacturing units to produce the finest food products. The complexities in the supply chain do come with a fair share of challenges. Let us take a look at five major ones, and how agricultural technology is helping agribusinesses overcome them.
Limiting post-harvest losses at the earliest point in the supply chain
One of the biggest questions that procuring companies face at the time of harvest is whether the harvested produce they receive will be of the quality they expect and the quantity they were assured. It is a known fact that agriculture is extremely climate-sensitive, and numerous factors can affect the cultivation of crops at different growth stages. Unpredictable and unfavourable weather conditions, pest infestations, crop diseases, and a change in soil conditions are only some of the factors that can severely impact agricultural productivity. What can farming communities do to overcome this challenge in spite of the fact that these factors are out of man’s control?
The adoption of an agri-technology platform is inarguably the most effective way to enhance agricultural productivity and efficiency of the field staff by digitising the various field operations and constantly improving farming practices based on the ground-truth intelligence that provide actionable insights. As a result, farming companies can provide procuring companies with a near-accurate estimate of the harvest quantity and quality, and monitor the cultivation closely to ensure the end result is as close as possible to the agreed figures. Procuring companies can also remotely monitor the growth and the health of the crop from time to time through satellite monitoring. Subsequently, this prevents the procuring companies from incurring heavy losses after the purchase has been made.
Quality compliance for export and food safety
International markets protect the interests of their consumers by way of strict import regulations on the quality of the agri-food product. Each country has its own specifications, and exporting organisations strive to comply with them to get the clearance for trade. While at one end it empowers the consumers to know about the product they consume in much detail, at the other end it enables food producers to establish a rapport with the consumer through the transparency of processes. What more can agri-stakeholders do to provide high levels of transparency to add value further to their business?
Companies that procure agri-commodities from one country to export it to another can establish a system that allows farming companies to monitor crop cultivation and ensure that farming practices adhere to the compliance stipulated for trade. Digital farm management systems such as CropIn’s enable the field staff to capture farm data for each activity, which can be extracted as customised reports to provide evidence of compliance with import/export regulations along with vital information from lab reports and quality control processes. The infusion of technology to achieve transparency and traceability in the cultivation process has empowered organisations involved in procuring and exporting to proceed with the process without any setbacks or delays.
A farmer producer organisation (FPO) that is one of India’s largest exporters of grapes partnered with CropIn when they sought to adopt tech-enabled solutions to comply with the strict requirements on traceability, compliance and quality control set by exporters for Europe. CropIn’s farm management solutions SmartFarm® and mWarehouse® enabled the organisation to capture ground-level data and visuals at all levels of production, from pre-sowing to shipping. SmartFarm® is CropIn’s flagship smart farming solution that captures crop data straight from the fields, whereas mWarehouse® is a digital packhouse solution that enables farm-to-fork traceability, quality control and compliance with international trade regulations.
The Web- and mobile-based applications digitise every activity that goes into producing and distributing the produce, thereby bring about transparency and accountability in the entire process. While SmartFarm® helps agribusinesses to achieve higher farm productivity, mWarehouse® ensures minimal wastage during the produce’s movement along the supply chain. Being a cloud-based platform, CropIn allows key players within the agribusinesses to view farm and supply-chain activities in real-time and derive actionable insights that encourage efficient and dynamic business operations.
Ensuring quicker movement of produce along the supply chain
The ‘State of Food and Agriculture’ (SOFA) 2019 report states that we lose a significant 14% of the world’s food between harvest and retail sales, and logistics is a critical loss point in addition to various others. An organised system for logistics is highly critical to ensure the perishable commodities such as fresh fruits and vegetables, remains as fresh as possible until it reaches the consumer, particularly if it has not been locally produced. Furthermore, a lack of clear communication between the producers and the procuring companies can impede the commodity’s movement and lead to considerable post-harvest losses.
Cloud-based networks enable organisations to overcome this challenge by providing a reliable multi-stakeholder platform for clear communication between the different parties involved. Technologies such as satellite monitoring also allow the procuring party to monitor the growth of the harvest remotely and arrive at a near-accurate harvest date, which further facilitates them to plan the logistics more effectively. These digital systems offer a wide array of services to suit each user’s requirement and allow close monitoring of the commodity’s movement from end to end. Also, the direct link between the interested parties eliminates the need for a middle-man, thus making the process more cost- and time-efficient.
Traceability of agri-food produce for increased trust in the brand
Many food products are widely popular only for the ingredients they use, sourced from regions known for them — cocoa from Ghana, almonds from Californian, Bourbon vanilla from Madagascar, tea from Assam, spices from India, coffee from Columbia, or saffron from Kashmir, Iran or Spain. But how can a procuring company prove to the consumers that the food product’s label does tell the true story about the origin of the said ingredient?
Big brands that cater to consumers around the world need to keep a sharp eye on the supply chain to ensure they provide only the choicest products. Farm-to-fork traceability is an important factor in establishing the origin of a food ingredient, and is being perceived by the end-consumers as a benchmark of quality and food safety. Procurement organisations, being an indispensable player in the agri supply chain, can leverage state-of-the-art digital tools to track all the processes involved in the cultivation of the agri-commodity, and utilise this intelligence to further strengthen the supply chain and earn the trust and loyalty of the end-consumers.
Promoting sustainable local sourcing
Food and beverage companies that have operations in multiple countries commit to sourcing a significant portion of their raw ingredients locally. This not only provides a livelihood for the local farming communities, but also ensures that the company capitalises on quality raw materials while making operations cost-effective. However, how does a company know where to source these ingredients from, which will eventually determine the quality of the final product?
Leading global brands are now utilising advanced technologies to arrive at smart procurement decisions. The combined power of remote sensing, artificial intelligence, machine learning and big data analytics, when tailored to local complexities, enables these organisations to identify crops of interest in relation to the hectarage planted, the health of the crop and a predicted yield. This will not just facilitate better sourcing decisions for the company, but will also allow them to determine if they will have enough quantities of the produce for manufacturing their product.
One of the world’s largest brewing companies made a public commitment to locally source 60% of their raw materials for their manufacturing operations in the Africa region. The company partnered with CropIn to leverage the AI-led predictive solution SmartRisk® to mitigate risks relating to raw material availability and empower their local sourcing teams with a procurement toolkit so that they could better plan their purchasing targets. The technology solutions provided by CropIn also enabled them to procure the right quality and quantity ingredients required for its beverage.
CropIn mapped 6 Nigerian states to identify sorghum growing areas in relation to the hectarage planted, the health of the crop and a predicted yield. SmartRisk® also analysed the crops’ historical performance in the last 3 years to understand the sorghum planting and yield trends, to facilitate better sourcing decisions for the company. CropIn’s crop modelling methodology was tailored to the local complexities in Nigeria — small plots, heavy intercropping and cloud cover. Its deep-learning engine with interactive, user-friendly interfaces established the performance of every pixel at district and state level — both historical and present — to deliver insights at a fraction of the traditional cost and effort, helping key stakeholders to hedge risks and take informed business decisions.
Originally published at www.cropin.com.