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 ASTHA KHANDELWAL MBA (LSCM) Sem I (R600212011) (R600212010)

A 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

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) West Bengal Uttar Pradesh Orissa Andhra Pradesh Punjab Tamil Nadu Karnataka Haryana
Source: Government of India

(kg/hectares) 2509 1996 1531 2939 3858 2546 3868 3051

5.78 5.58 4.48 3.98 2.64 2.05 1.49 1.05

VARIOUS FOOD GRAINS SALES IN WEST BENGAL

S ales
3% 6% 4% 8% 53% 18% 6% RICE FRUITS VEGETABLES POTATO FIBRE CROP OIL SEED WHEAT

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 1.Andhra Pradesh : 2.Bihar 3.Gujarat 4.Haryana 5.Karnataka 7.Maharashtra 8.Orissa 9.Punjab 10.Tamil Nadu 13. West Bengal : : : : : : : : : Despatches to states apart from local markets Karnataka, Kerala, Tamil Nadu, Gujarat, Maharashtra, West Bengal Uttar Pradesh, West Bengal, Madhya Pradesh, North Eastern States Kerala, Maharashtra Assam, Bihar, Delhi, Madhya Pradesh, Maharashtra, Orissa, U. P. Maharashtra, Andhra Pradesh, Tamil Nadu, Kerala Andhra Pradesh, Maharashtra, Assam, Gujarat, Orissa, West Bengal Madhya Pradesh, Uttar Pradesh, Gujarat, West Bengal, A. P., Orissa West Bengal, Madhya Pradesh Assam, Bihar, Delhi, Uttar Pradesh, West Bengal, Madhya Pradesh, Maharashtra, Rajasthan, Andhra Pradesh Kerala, Karnataka, Gujarat, Pondichary, Orissa Assam, Delhi, Bihar, Haryana, Uttaranchal, Rajasthan, Maharashtra, Delhi,Bihar, Uttar Pradesh, Orissa, North Eastern States

6.Madhya Pradesh:

11.Uttar Pradesh :

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 c) Bullock carts

b)Tractor trolley 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 : This system is used in some states like Uttar Pradesh, Bihar, Orissa, Kerala, Tamil Nadu, West Bengal, Assam, etc.

4) River transport :

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) 2) 3) The mode of transportation should be comparatively cheaper among available alternatives. It should be convenient during loading and unloading of paddy/rice. It should protect paddy/rice during transportation from adverse weather conditions i.e. rain, floods etc. It should be insured against any accident. It should be safe from pilferage etc. The delivery of paddy/rice to consignee should be made as per specified time schedule. It should be easily available particularly during post harvest period. It should be producer friendly for the payment of transportation.

4) 5) 6) 7) 8)

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. Transportation cost in that channel. Commission charges and market margins received by the intermediaries, such as trader, commission agent, wholesaler and retailer. Financial resources. The shorter channel with minimum market cost should be selected.

2. 3.

4. 5.

The following are the important marketing channels existing in the marketing of paddy/rice.
1) 2) Producer Miller Wholesaler Retailer Consumer Producer Commission Agent Miller Wholesaler Retailer Consumer 3) Producer Itinerant Merchant Miller Wholesaler Retailer Consumer 4) Producer Wholesaler (Paddy) Miller Wholesaler(Rice) Retailer Consumer 5) 6) Producer Miller Retailer Consumer Producer Miller Consumer.

7) Producer Procuring Agency (FCI/State Govt./Co-operatives) Miller (FCI/Co-operatives/Private) Distributing Agency (State Govt.) Fair price/Ration shop Consumer.

7. TRANSPORTATION FROM KOLKATA TO DELHI

Time taken Distance Route

: : :

18hrs 12 min 1390.5 Km NH-2

MODES OF TRANSPORTATION OF RICE FROM KOLKATA TO DELHI

ROADWAYS TRUCK TRAILER TRACTOR (used within distribution in Amount in Kg Amount (Rs.) Distance(KM) 90,000 25,000 1390.5 50,000 80,000 1390.5 delhi) 700 5000-6000 50-100

RAILWAYS COMMODITY FOOD GRAIN (RICE) RISK RATE Railway Risk Rate(RR) BASE CLASS 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