Developing Appropriate Logistics for Perishable Goods and the Integration of Smallholders Farmers

Tomy Perdana Center for Agricultural Supply Chain and Logistics System Studies

Faculty of Agriculture, Padjadjaran University

Asia Pasific Trade Facilitation Forum 2014 in Bangkok

Challenges of the Small and Rural Farms

Being small farms

Lack of financial capital and small production below threshold capacity

Poor costs and operation efficiency

Low product quality

Locality

Distance from the collection centers, market and exit port

Poor access to reliable information

Physical inaccessibility due to terrains, poor transport infrastructure

Incur higher transportation costs in produce delivery

Production decisions

Lack of knowledge and information result in the inability to decide what,

when, how and how much to grow?

What capacities of the small farms able to engage into the Supply Chain

System

What motivations are needed to want to engage into the Supply Chain

System

What competencies are needed of small farmers to enable them into the

System 2

Advantages of small farms

Direct and precise control of farm operations

Detect crop problems quickly

Personal attention to crop care

Opportunities available to small farms

With global changes, new markets become available and accessible

Niche marketing

Innovate farm techniques

Innovate marketing approaches

Add value to products

Safe food

Rare cultivars / varieties

Differentiated produce

Quality Certification

Develop supply chain networks

Opportunities of the Small and Rural Farms

3

Determinants of an Efficient Logistics Management Program

Timing – correct time of implementation, shortest transit route

Reliability – right time of departure / arrival

Consistency – doing it again and again

Quality – best quality condition

Performance – full satisfaction of the customer

Cost – most efficient logistics cost, economies of scales, inventory

Price – most competitive price

Sustainable logistics system – fuel resources, transport mode, etc

Others – Security, Highest capacity utilization, Responsiveness,

etc.

4

5

Teaming-up a Farmers Group

Criteria of Membership

Capacity

Locality

Similar Problems

Membership Terms

Division of Responsibilities

Individual Financial Responsibilities

Sharing Equipment / Transportation

Production Rotation / Allocation

Share Costs

Penalty

Knowledge Management

Developing a logistics model for the small &

rural farmers group production

Compatible crops

Contracts

Agriculture extension

Selection

Source : Chan (2012)

6

Knowledge Management Internal

Production in Farm

Market Information

Acquisition

Good Farm Practices

Agronomy

P&D Control

Identify Buyers / Clients

Confirm Demand Criteria

Market conditions

Environmental conditions

Connectivity

Forecast conditions

Farm Logistics

Harvest

Farm Grading

Farm Packing

Temporary Cool Storage / PHH

Delivery or Collection

J.I.T

P.O.

B 2 B

Outsource Transport

System

External

Harvest on Demand

Implementation

Source : Chan (2012)

7

Logistics for Export Market

Farm Supply

Market Information

Acquisition

Quality Consistency Timeliness

Transport System

Shipping Co.

Shipping Agent

Haulage Co.

Port Authorities

Customs

Financial Inst.

Identify Buyers / Clients

Confirm Demand Criteria

Market conditions

Environmental conditions

Forecast conditions

Making Decision

Monitoring Production /

Market

Improving & Upgrading System

Control Operations

After Delivery

Payment

Regulations

Certification / Government

EDI System

Source : Chan (2012)

Facilitating Trade and Developing Approriate Logistics of Small Farmers

Farmers Farmers

FarmersGroup

Farmers Farmers

FarmersGroup

Farmers Farmers

FarmersGroup

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The Triple Helix Facilitation

Agro logistics management in the rural area

Agro logistics management in the rural area

10

Performance Management

Push System

Pull System

Value Added

Market Growth

Fee based Income

11

Logistics Mgmt

Market Acces

Technology Acces

Agroinput Acces

Financial Acces

Agro logistics services in the rural area

The Triple Helix Model in facilitating trade and developing approriate logistics of small farmers

FFVSC

Government

PrivateUniversity

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UniversitasPadjadjaran

APRINDO

Farmer

Farmers

Group Farmer

Farmer

Market

University

Gives services in technical, managerial, institutional,

access to technology, financing, and market.

Other Parties

(Banks, Syngenta Foundation,

Supermarket, food industry)

Reduce risks such as cancelled order, delayed payment, climate change

Ministry of Agriculture

Food Crops and Agricultural Services of

West Java

Giving the supporting facilities such as packing house with cold chain

system, irrigation etc

Central Bank,

Supporting Agencies

Funding trainings and building some

demonstration plots

The Role of Each Actor in Facilitating Small Farmers and Developing Appropriate

Logistics of Small Farmers

Market

guarantee

Supplying

consistency

Facilitating Trade of Small Farmers in Modern Agricultural Supply Chain

Developing approriate Logistics for Small Farmers : from farm to market

Developing approriate Logistics for Small Farmers : from farm to market

Developing approriate Logistics for Small Farmers : from farm to market

Developing approriate Logistics for Small Farmers : from farm to market

Thank You

Asia Pasific Trade Facilitation Forum 2014 in Bangkok