5 Biggest Challenges In Sourcing & Procuring Agri-Commodity — How Do AgriTech Solutions Help Overcome Them?

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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. They 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 supply chain problems, and how agricultural technology is helping agribusinesses overcome them.

How Does Agritech Help Overcome Supply Chain Challenges?

  1. Limit post-harvest losses at the earliest point in the supply chain
  2. Enable quality compliance for export and food safety
  3. Ensure quicker movement of produce along the supply chain
  4. Establish traceability of agri-food produce for increased trust in the brand
  5. Promote sustainable local sourcing

Limit 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.

Agriculture is extremely climate-sensitive, and numerous factors can affect the cultivation of crops at different growth stages. Unpredictable and unfavorable 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 unarguably the most effective way to enhance the agricultural productivity and efficiency of the field staff. It facilitates the digitalization of the various field operations to constantly improve farming practices based on the ground-truth intelligence that provides 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 to determine a yield estimate around the time of harvest.. Subsequently, this prevents the procuring companies from incurring heavy losses after the purchase has been made.

Enable 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 agri-food products. Each country has its own specifications, and exporters strive to comply with them to get the clearance for trade.

On one end, it empowers the consumers to know about the product they consume in much detail. On 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?

Commodity traders and companies that procure agricultural commodities from farmers and export them to another country can establish a system that allows them to monitor crop cultivation. They can use farm management solutions to ensure growers adhere to farming practices that are compliant with regulations 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 customized reports to provide evidence of compliance with import/export regulations along with vital information from lab reports and quality control processes. The infusion of agritech to achieve transparency and traceability in the cultivation process has empowered organizations involved in procuring and exporting to proceed with the process without any setbacks or delays.

A farmer producer company that is one of Asia's largest exporters of grapes partnered with Cropin to adopt a tech-enabled system that helped it comply with the strict requirements on traceability, compliance, and quality control set by buyers in Europe. Read the story here.

Ensure 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 organized system for logistics is highly critical to ensure perishable commodities such as fresh fruits and vegetables remain 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 organizations to overcome such supply chain problems by providing a reliable multi-stakeholder platform for clear communication between the different parties involved. Earth observation systems 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.

Establish 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 California, 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 organizations, being indispensable players in the agri supply chain, can leverage state-of-the-art agritech solutions tools to track all the processes involved in the cultivation of the agri-commodity and utilize this intelligence to further strengthen the supply chain and earn the trust and loyalty of the end-consumers.

One of the other supply chain problems where traceability is beneficial is product recalls. Brands can swiftly identify products unfit for consumption using unique codes and take immediate action, thereby reducing losses and ensuring continued trust in the brand.

How does Cropin's digital traceability system empower brands that sell packaged honey? Know more here.

Promote 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 capitalizes on quality raw materials while making operations cost-effective.

However, how does a company from know where to source these ingredients, which will eventually determine the quality of the final product?

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Leading global brands are now utilizing advanced technologies to arrive at smart procurement decisions. The combined power of remote sensing, artificial intelligence, machine learning, and cloud computing, when tailored to local complexities, enables these organizations to identify crops of interest in relation to the hectarage planted, the health of the crop, and its predicted yield output. 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.

For instance, 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. SmartRisk's insights would also empower their local sourcing teams with a procurement toolkit so that they could better plan their purchasing targets. The technology solutions provided by Cropin further enabled them to procure the right quality and quantity of ingredients required for its beverage.

Cropin mapped 6 Nigerian states to identify sorghum growing areas. As the next step, SmartRisk's proprietary algorithms helped determine the health of the crop and estimate its yield weeks before harvest. SmartRisk also analyzed 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 inter-cropping, 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.

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