UNIVERSITY OF PETROLEUM & ENERGY STUDIES

DEHRADUN

INDIVIDUAL ASSIGNMENT

A Comparison of Transportation Cost of various modes of Transport for any Food Grain for a specific route

QUANTITATIVE TECHNIQUES

(MBCQ 721)

Submitted to:

Dr. NEERAJ ANAND

Associate Professor & HOD – QT/RM/Operations CMES

Submitted by :

AYUSH MEHROTRA (R600212011) ASTHA KHANDELWAL (R600212010)

MBA (LSCM) Sem IA Comparison of Transportation Cost of various modes of Transport for any Food

Grain for a specific route

1. INTRODUCTION

A trade route is a logistical network identified as a series of pathways and stoppages

used for the commercial transport of cargo. Allowing goods to reach distant markets, a

single trade route contains long distance arteries, which may further be connected to

smaller networks of commercial and noncommercial transportation routes.

What we are transporting?

Rice

From KOLKATA to Delhi

2. Rice Production Scenario in West Bengal

West Bengal is the largest producer of rice. Rice occupied almost 53% of the total agricultural

crop areas of the state during and it contributed the same percentage (53%) towards

the total production of all agricultural crops during the same period. In West Bengal, the

area and production under food grains were 63.70 lakh hectare and 160.61 lakh metric

tonnes respectively, out of which percentage share of rice (total) alone was 91 in the

case of area and 93 in production. Rice grows in the state in 3 different seasons viz., Aus

(autumn rice), Aman (winter rice) and Boro (summer rice). The percentage shares of

these three categories of rice during 2007-2008 were 4.92, 68.65 and 26.43 with respect

to area and similarly 3.84, 62.69 and 33.47 in production of total rice respectively.

Table 1: Rice cultivation in major rice producing States of India

STATE AREA YIELD

(million hectares) (kg/hectares)

West Bengal 5.78 2509

Uttar Pradesh 5.58 1996

Orissa 4.48 1531

Andhra Pradesh 3.98 2939

Punjab 2.64 3858

Tamil Nadu 2.05 2546

Karnataka 1.49 3868

Haryana 1.05 3051

Source: Government of India

VARIOUS FOOD GRAIN’S SALES IN WEST BENGAL

3. IMPORTANT ASSEMBLING MARKETS  

The following are the major assembling markets for paddy/rice producing states in the country.  

  Despatches from major paddy producing states in India  

States Despatches to states apart from local markets  

1.Andhra Pradesh : Karnataka, Kerala, Tamil Nadu, Gujarat, Maharashtra, West Bengal

2.Bihar                   : Uttar Pradesh, West Bengal, Madhya Pradesh, North Eastern States

3.Gujarat                : Kerala, Maharashtra

4.Haryana              : Assam, Bihar, Delhi, Madhya Pradesh, Maharashtra, Orissa, U. P.

5.Karnataka           : Maharashtra, Andhra Pradesh, Tamil Nadu, Kerala

6.Madhya Pradesh: Andhra Pradesh, Maharashtra, Assam, Gujarat, Orissa, West Bengal

7.Maharashtra       : Madhya Pradesh, Uttar Pradesh, Gujarat, West Bengal, A. P., Orissa

8.Orissa                 : West Bengal, Madhya Pradesh

9.Punjab              : Assam, Bihar, Delhi, Uttar Pradesh, West Bengal, Madhya Pradesh, Maharashtra, Rajasthan, Andhra Pradesh

10.Tamil Nadu       : Kerala, Karnataka, Gujarat, Pondichary, Orissa

11.Uttar Pradesh   :  Assam, Delhi, Bihar, Haryana, Uttaranchal, Rajasthan, Maharashtra,

13. West Bengal    : Delhi,Bihar, Uttar Pradesh, Orissa, North Eastern States

4. Availability of cheaper and convenient modes of transport  

            There are different modes of transport used in paddy/rice transportation.  Road and rail transport are normally used for internal markets.

1)     Road transportation : Road transport is the most predominant mode of transport used in the movement of paddy/rice.  Road transport is used in right from the producing fields to the ultimate consumer.  The initial movement of paddy/rice is done on village roads, which are generally non tarred (Kachha), and mostly tracks wind through the fields. Over the years, road transport has expanded phenomenally, due to the development of roads in rural areas, as well as by the increase of numbers and efficiency of different types of vehicles i.e. trucks and tractors etc.  The following means of road transport are employed in different parts of the country to transport paddy/rice. 

                   a)  Head load                b)Tractor trolley                      

                   c)  Bullock carts          d)   Trucks      

 2) Railways              :      Railway is one of the most important means of transportation of paddy/rice. Railway is cheaper than road transport and more suitable for longer distance, as well as for large quantity of paddy/rice.  The rate charged for the transport of paddy/rice depends on distance, quantity etc.  Railway transportation requires more handling cost, as it requires loading and unloading charges and local transportation cost. However, losses are more in case of transport by railways. 

3) Water transport :     This is the oldest and cheapest mode of transportation. This form of transport is used in case of cities situated on or near the bank of a river, canal or in coastal parts. The export of paddy/rice is mainly done by sea transport. This transport system is slow but cheap and suitable for carrying large quantity. The following means of water transport are used in paddy/rice transport : 

4) River transport   :    This system is used in some states like Uttar Pradesh, Bihar, Orissa, Kerala, Tamil Nadu, West Bengal, Assam, etc. 

5) Canal transport  :  Canals are used for paddy/rice transportation to certain extent in Uttar Pradesh, West Bengal, Bihar, Orissa, Tamil Nadu and Andhra Pradesh. 

6) Sea transport    :      The coastal trade is in practice mainly in Maharashtra, Orissa, West Bengal, Tamil Nadu, Kerala and Goa.   

5. Selection of mode of transportation

For the selection of mode of transportation, following points may be considered:  

1)         The mode of transportation should be comparatively cheaper among available alternatives.

2)         It should be convenient during loading and unloading of paddy/rice.

3)         It should protect paddy/rice during transportation from adverse weather conditions i.e. rain, floods etc.

4)         It should be insured against any accident.

5)         It should be safe from pilferage etc.

6)         The delivery of paddy/rice to consignee should be made as per specified time schedule.

7)         It should be easily available particularly during post harvest period.

8)     It should be producer friendly for the payment of transportation.

6. MARKETING CHANNELS  

     Criteria for selection of channels

 There are many marketing channels involved in marketing of paddy/rice.  The following are the criteria for the selection of efficient marketing channels.  

1.      The channel, which ensures reasonable return to producer, is considered to be good or efficient.

2.      Transportation cost in that channel.

3.      Commission charges and market margins received by the intermediaries, such as trader, commission agent,   wholesaler and retailer.

4.      Financial resources.

5.      The shorter channel with minimum market cost should be selected.

     The following are the important marketing channels existing in the marketing of paddy/rice.  

1)     Producer  ó Miller  ó  Wholesaler  ó  Retailer   ó  Consumer  

2)     Producer  ó  Commission Agent  ó  Miller  ó Wholesaler  ó Retailer    

ó Consumer  

3)     Producer  ó   Itinerant Merchant  ó   Miller  ó   Wholesaler  ó   Retailer 

óConsumer  

4)     Producer ó  Wholesaler (Paddy) ó  Miller ó Wholesaler(Rice) ó Retailer   

 ó Consumer  

5)     Producer  ó   Miller  ó   Retailer  ó   Consumer  

6)     Producer  ó   Miller  ó  Consumer.  

7)   Producer  ó  Procuring Agency (FCI/State Govt./Co-operatives)  ó      

         Miller (FCI/Co-operatives/Private)   ó   Distributing Agency (State Govt.)  

            ó   Fair price/Ration shop    ó   Consumer.

7. TRANSPORTATION FROM KOLKATA TO DELHI

Time taken : 18hrs 12 min

Distance : 1390.5 Km

Route : NH-2

MODES OF TRANSPORTATION OF RICE FROM KOLKATA TO DELHI

ROADWAYS

TRUCK TRAILER TRACTOR

(used within

distribution in delhi)

Amount in Kg 90,000 50,000 700

Amount (Rs.) 25,000 80,000 5000-6000

Distance(KM) 1390.5 1390.5 50-100

RAILWAYS

COMMODITY RISK RATE BASE CLASS

FOOD GRAIN (RICE) Railway Risk Rate(RR) 130

For Base Class 130 cost of transportation is Rs. 1326.80/tonne for (1301-1400)KM.

   

 

 

 

8. Storage facilities  

I)  Producers’ storage  

Producers store paddy/rice in bulk at farm godown or own house using various types of traditional and improved structures.      

II)      Rural godowns  

Considering the importance of rural storage in marketing of agricultural produce, the Directorate of Marketing and Inspection initiated a Rural Godowns Scheme, in collaboration with NABARD and NCDC. Its objective is to construct scientific storage godowns with allied facilities in rural areas and to establish a network of rural godowns in the States and Union Territories.

III) Mandi godowns  

Most of the paddy/rice is moved to the market after the harvest.  Generally, paddy is stored both in bulk and in bags in every State, while the rice is kept in bags. Most of the States and U.Ts. have enacted Both in producing and consuming centers/markets, traders also possess permanent storage in the form of godowns or warehouses, or on hire basis. 

IV)  Central Warehousing Corporation ( CWC )  

CWC was established during 1957. It is the largest public warehouse operator in the country.  Apart from storage, CWC also offers services in the area of clearing and forwarding, handling and transportation, distribution, disinfestation, fumigation and other ancillary services like safety and security, insurance, standardization and documentation. 

V) State Warehousing Corporations (SWCs)    

Different States have set up their own warehouses in the country. The area of operation of the State Warehousing Corporations is district places of the State.  The total share capital of the State Warehousing Corporations is contributed equally by the Central Warehousing Corporation and concerned State Government. The SWCs are under the dual control of the State Government and the CWC.   

VI) Cooperatives  

            Cooperative storage facilities are provided to the producer at cheaper rates, which reduces the storage cost. These cooperatives also provide pledge loan against the produce and storage is more systematic and scientific than traditional storage.

 

9. Reference

www.agrarianstudies.org

Agarwall Movers and Packers,Dehradun

www.Indianrailway.gov.in