Coming Full Circle in Agricultural Supply Chains

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Coming Full Circle in Agricultural Supply Chains

Of late, the planet is facing serious problems of sorts such as global warming, natural disasters, and unsustainable production and consumption practices, which have put the global supply chains under constant threat. Adding to it, our linear business models worsen the situation on the sustainability front. Other sectors included, the agricultural supply chains are critical for ensuring food security of a nation and these are marred by issues such as cropland reduction, supply-demand imbalances, and a fierce competition for resources. Therefore, a paradigm shift is required from the current linear practices to circular economy practices. The article discusses how digital technologies can enhance circularity in the agricultural supply chains and pave the way for sustainable agricultural practices.

The Agricultural Supply Chains (ASC) organizations can leverage various CE business models (such as ReSOLVE: Regenerating, Sharing, Optimizing, Exchanging, Virtualizing, and Cycling of Materials; various R strategies such as Reuse, Reduce, Recycle, Remanufacture, and Refurbish) for implementing CE practices. The adoption of CE practices will result in creating a regenerative economy. Technologies such as blockchain have provenance feature and can help in improving produce traceability, thereby effectively reduce food frauds and improve product recall. It is estimated that with the current linear practices, the world will soon run out of steam and therefore, a paradigm shift is required that focuses on the circular models instead of wasteful linear ones. Studies have highlighted that industrial operation in various sectors across the globe are majorly responsible for resource depletion/ scarcity and environmental degradation. The recent pandemic has highlighted how fragile global supply chains are: economic slowdown, flatlined trade across geographies due to global lockdown, reduced order volumes, and payment delays to name a few. The need of the hour is a resilient business model that will lead to sustainable growth while optimizing resource utilization. With meteoric urbanization, ever increasing population, and global phenomena such as climate change and environmental degradation, it is high time that business models in India move towards circular economy (CE) practices.

The sustainability of Agricultural Supply Chains (ASC) in India is a major concern for a variety of critical stakeholders. With the current business models and the technologies, it is very uncertain that the food security and safety of the current and the future generations will be met. Various supply chain shocks and supply-demand imbalances challenge the affordability of food by certain masses.

It is reported that annually, the ASCs lose produce to the tune of US$143 million annually and majority of these losses take place in the initial phases of the ASCs (i.e., from production to distribution). This wasted food not only produces a humongous carbon footprint (46.5 MT) but wastes a lot of scarce resources. Lack of information uptake, dependency on existing technologies, intensive fertilizer and pesticide usage, soil degradation, lack of post-harvest infrastructure facilities, and the make, use, dispose practices are responsible for such a scenario. This brings us to a tipping point where we must switch from the linear practices to CE practices for ensuring sustainability in the ASCs. The Linear and Circular Models As far as the definitions go, a linear model relies heavily on the make-use-dispose ideology while focusing on enhancing the resource efficiency; on the other hand, a circular model puts focus on the eco-effective utilization of resources. The circular model emphasizes on upcycling waste items for making high value products. CE is comparatively a nascent business model. Despite being a concept and a practice that is still in its development stages, CE has captured great attention from both practitioners and academia in a short span of time. The Ellen McArthur foundation states that CE is a restorative and a regenerative industrial system that is aimed at achieving sustainable and holistic development. Given its ability to minimize and reduce waste by closing the resource circles by changing the existing business models, CE holds immense potential in transforming the path towards sustainability. Studies have also highlighted that disruptive technologies will help in enabling CE practices.

ASCs in India deploy more than 45% of the population across all the phases and has a variety of upstream and downstream stakeholders. A typical ASC is depicted in Figure 1. This has its own pros and cons as many participants hamper the efficiency and competency of the ASCs. These are further complicated by non-standardized products and processes at different stages which result in poor quality and quantity of the produce, supply-demand imbalances, energy waste, food waste, and food insecurity. Majority of the operations in the ASCs are unsustainable and heavily resource intensive which highlights focus on linear economy practices. Therefore, it is high time that CE practices be applied in the ASCs for improving the resource and enhancing the operational efficiencies. Modern day information and communication technologies (ICTs) can play a pivotal role in the transformation of linear ASCs to circular ASCs. The ICTs will increase the ASC responsiveness and flexibility, improve resource optimization and profitability, reduce costs, improve risk mitigation practices, reduce food wastage, enhance traceability, and food safety.

CE Practices in the ASCs: Conceptual Framework

The traditional ASCs can be transformed into circular ASCs wherein, inefficiencies across all ASC phases can be enhanced and CE inspired resource recovery practices can be employed (conceptual framework for the same is highlighted in Figure 2). As depicted in Figure 1, an ASC consists of various phases and therefore implementation of CE practices is required across all phases.

ON THE ENHANCEMENT OF OPERATIONAL EFFICIENCY FRONT:

Usage of obsolete technologies and illdefined processes often hamper the operational efficiency. Therefore, in order to transform and incorporate sustainability practices in the ASCs, adoption of disruptive technologies and CE practices is anticipated to play a critical role. In the farming and cultivation phase, sustainable and integrated farming practices can be implemented.

Soil condition-based fertilization instead of intensive fertilizer applications, integrated resource management, and precision farming techniques will improve input operational efficiency. The farmers can switch to collective farming practices and rely on technology for improving process efficiency in farming and cultivation. For sourcing, farmers can focus on the short food supply chains as these improve participation from the local populations and help in reducing the food miles. Supply based scheduling practices, lean practices, and contracts can help in enhancing the scheduling efficiency.

Usage of artificial intelligence and machine learning algorithms for accurate forecasting will help in bridging the supply-demand gaps thereby optimizing resource usage in production processes. This will further reduce the supply demand uncertainties. In the packaging phase, eco-friendly packaging material can be selected during the procurement phase and therefore, more focus can be laid on the package design and material for making it recyclable and reusable. During transportation, GPS/ GIS enabled route planning can optimize resource consumption and help in reducing the carbon emissions. Network optimization and tracking based on Internet of Things (IoT), blockchain technology can be used for enhancing food safety and quality. The final phase consists of retail, distribution, and consumption. In this phase, effective reuse, recycling, and optimal resource usage will minimize the produce waste and improve efficiency. We have discussed how technology intervention and CE practices can improve the operational efficiency in the ASCs. We now discuss how to improve the resource recovery across different ASC phases.

ON THE IMPROVED RESOURCE RECOVERY FRONT:

Resource recovery will play a crucial role in the sustainable transformation of the ASCs. In the farming and cultivation phase, reuse of by-products and other consumed resources can improve resource recovery practices. Technologies such as IoT can play a major role in this case. In the production and packaging phases, resource recovery can be enhanced through reuse of by-products and waste product recycling. Effective nutrient recycling will also help in improving resource recovery. The CE practices will help in effectively closing the nutrient, material, and energy loops through activities such as reducing the over usage of raw materials, actively reusing the materials, recovering materials, and recycling them. It is anticipated that CE practices can improve sustainability holistically across all three dimensions viz. social, economic, and environmental. In the transportation phase, recycle and reuse of waste due to transport activities can be carried out. Resource optimization, looping, and regeneration are some of the prominent CE practices which can enhance resource recovery in the ASCs.

FOOD FOR THOUGHT

The ASC organizations can make use of various CE business models (such as ReSOLVE: regenerating, sharing, optimizing, exchanging, virtualizing, and cycling of materials; various R strategies such as reuse, reduce, recycle, remanufacture, and refurbish to name a few) for implementing CE practices. The adoption of CE practices will result in creating a regenerative economy.

Technology adoption across different ASC phases will further improve resource utilization practices and improve produce safety and quality. The practitioners are therefore urged to implement CE practices in their ASCs. Technologies such as blockchain have provenance feature and can help in improving produce traceability thereby effectively reduce food frauds and improve product recall. Blockchain can also be used as a tool for improving the financial inclusion of small landholders. Additionally, it can bring about market transparency and thereby progress real-time market information sharing to strengthen food security. The overall goal of implementing CE practices is to achieve sustainability holistically across all three dimensions (social, economic, and environmental).

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