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Response For Impact Of Overproduction On Food Wastage Economics Essay

4.1 INTRODUCTION

Agro Industry is an extension of Agriculture. The development is almost directly proptional, more the development in agro industry more development in agriculture like more stabilized agriculture and more employment opportunities. It directly contribute to infrastructure i.e., both social and physical.

It provides more opportunities for farmers to earn more and create food surplus. Agro Industry includes post- harvest activities. It included activities like preserving and processing. Agro industry plays an important part in development of economy. Agro Industry can be categorized into one Village Industries, second Small Scale Industry, and third large Scale Industry.

The development of this industry has started back from pre independence days. An increase in environmental concerns has played a positive part for these Industries. Replacement of plastic bags by Jute and cotton bags. This industry does processing of agricultural products and converts them to usable form. The private sector is yet to make a mark in this industry. There is a big market for tea, sugar, coffee. The market for processed food is also very big.

The modernization in the food supply chain will lead to doubling of food production in India in next ten years. This also has a significant effect on trade opportunity in Agro industry; this also leads to other business opportunity. Indian agriculture industry is the world’s second largest producer of food.

Agriculture industry contributes to around thirty five percent of GDP and employees around sixty-five percent. Indian agricultural industry that have the capacity to lure foreigners with promising benefits are the deep sea fishing, aqua culture, milk and milk products, meat and poultry segments. The Industry and the service sector contribute to eighty percent of GDP. The GDP contributed by this industry can attract investments. It contributes to around thirteen percent of countries total exports. Due to the huge market potential, Indian Agricultural Industry has become the home to a number of top agricultural companies.

Agriculture has been regarded as mainstay of our economy. It provides food to million and raw materials to our industry and also has an economic potential for export of agricultural commodities. Indian variety of climatic types and natural conditions offer a conducive environment for the cultivation of a large variety of agricultural produce.

Latest development includes providing an environment for agribusiness. For this government encourage private investment in this area like deregulation of the sector from licenses, import duties and relaxing FDI norms, changing policy regulations for private sector activity in market. Investing are done in Food Parks, Agri Export Zones, terminal markets etc.

Investment by Indian conglomerates in agribusiness is increasing because of Indian Governments development initiatives. Investments are done by agro-exports, processing, organized retailing, marketing etc. In recent years agricultural sector has huge investments by companies such as, Bharati's Field Fresh, Reliance Industries Limited, ITC, PepsiCo, Aditya Birla Group and M&M's Mahindra Shubhlabh among others.

A big challenge is faced is the availability of satisfactory quantity and quality of raw materials to meet the demand of market. Modern value chains are a way to satisfy the required quality and quantity of raw materials...

The value chain needs to be relooked to streamline agriculture industry in India. Varied scope of farm and intricate supply chain makes India a favorable investment spot. Sustainability and environment management is given more importance for agro development. More investments are needed in distribution, logistics, marketing and agro business consulting. What makes India more attracted towards marketing technology is increase in consumer spend, growing food retailing, increase in food exports.

4.2 PURPOSE OF THE STUDY

The purpose of the study is to find out the occurrence of wastage in each part of the supply chain. According to statistics of the total produce close to 40 percent are wastes among various entities of supply chain. It also means we are price of these wastage also adds up to the selling price of the product which ultimately the customer has to bear. The purpose was to identify the areas where the maximum wastage occurs so that steps could be taken to minimize the amount of wastage which would add value and benefit to each entity in the supply chain i.e. from framer to the customer. This study is also done to propose some solutions to the problems found so that the supply chain can be made more effective and efficient.

4.3 SIGNIFICANCE OF STUDY

The study of the post-harvest wastage in the agriculture supply chain will help us understand where in the supply chain we are occurring more of wastage. It not only specifies the amount of wastage but also gives importance to the ways and means it is occurred. This study is important because it is high time to have a control on our food waste. Statistics show that out of whatever is produced close to forty percent is wasted, that is a huge figure and ultimately customers have to bear all the added cost due to wastage. The purpose of the study is to understand the most common ways waste occurs and to suggest ways to eliminate that. The study will benefit the society by giving them an insight on what are the common errors which they make adds up to close to forty percent wastage. This helps the society to keep a control on the ways they operate so that they can tame the food wastage. And importantly this study will help the supply chain to be more effective and efficient.

4.4 LIMITATION OF THE STUDY

The conclusions were drawn on the basis of data collected during the small duration of the period.

Possibility of human error.

There was no proper support from organizations.

5.1 INTRODUCTION

In the background of the methodology of the study outlined in chapter 3 and the overview of Indian Agro industry sector in chapter 4, the researcher presents a micro analysis of the determinants of food wastage in the agriculture supply chain. The plan of the chapter consists of: profile of respondents of the sample survey in part 1; and finally an analysis of primary data in part 2.

5.2 RESPONSE OF RESPONDENTS OF THE SAMPLE SURVEY

5.2.1 Response for impact of overproduction on food wastage

Fig 5.1 Impact of Overproduction

5.2.2 Response for impact of improper packing on food wastage

Fig 5.2 Impact of Improper Packing

5.2.3 Response for impact of poor material handling on food wastage

Fig 5.3 Impact of poor material handling

5.2.4 Response for impact of warehouse effectiveness on food wastage

Fig 5.4 Impact of Warehouse effectiveness

5.2.5 Response for impact of mismanaged logistics on food wastage

Fig 5.5 Impact of mismanaged logistics

5.2.6 Response for impact of lack of temperature on food wastage

Fig 5.6 Impact of lack of temperature controlled vehicle

5.3 QUANTITATIVE ANALYSIS

5.3.1 RELIABILITY TEST

Reliability test is done to check the overall constancy of the measure. High reliability means similar results under consistent conditions. Degree to which a position is maintained in a sample.

Reliability Statistics

Cronbach's Alpha

N of Items

.676

7

Table 5.1 Reliability Statistics

INTERPRETATION

The alpha values equal to .676 shows that the sample is acceptable and reliable.

5.3.2 FACTOR ANALYSIS

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.698

Bartlett's Test of Sphericity

Approx. Chi-Square

88.685

df

15

Sig.

.000

Table 5.2 KMO and Bartlett’s Test

INTERPRETATION

The value of the Bartlett’s test shows that the samples are from population with equal variance.

Total Variance Explained

Component

Initial Eigenvalues

Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total

% of Variance

Cumulative %

Total

% of Variance

Cumulative %

Total

% of Variance

Cumulative %

1

2.73

45.535

45.535

2.73

45.535

45.535

2.10

35.077

35.077

2

1.30

21.732

67.267

1.30

21.732

67.267

1.93

32.190

67.267

3

.854

14.235

81.501

4

.516

8.593

90.094

5

.378

6.308

96.402

6

.216

3.598

100.000

Table 5.3 Total Variance

Fig 5.7 Scree Plot

Rotated Component Matrix

Component

1

2

OVERPRODUCTION

.811

IMPROPER_PACKING

.774

POOR_MATERIAL_HANDLING

.701

WAREHOUSE_EFFECTIVENESS

.853

MISMANAGED_LOGISTICS

-.149

LACK_OF_TCV

.141

Table 5.4 Rotated Component Matrix

Table 5.5 Anova

Descriptive Statistics

Mean

Std. Deviation

N

WASTAGE

2.7447

1.32645

47

OVERPRODUCTION

2.5745

.87836

47

IMPROPER_PACKING

3.2128

.99861

47

POOR_MATERIAL_HANDLING

3.7660

.86509

47

WAREHOUSE_EFFECTIVENESS

3.4255

.49977

47

MISMANAGED_LOGISTICS

3.4255

.49977

47

LACK_OF_TCV

4.2553

.64160

47

Table 5.6 Descriptive Statistics

Linear regression shows or models a relationship between dependent variable and independent variable. It also helps in determining the strength between variables.

5.3.3 LINEAR REGRESSION

ANOVA

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

Change Statistics

R Square Change

F Change

df1

df2

Sig. F Change

1

.944a

.891

.874

.46993

.891

54.418

6

40

.000

INTERPRETATION

The R value shown is the squared and shows the relationship among the observed and the foreseen values and the dependent variable. Example model 1 has the R value is .944 it signifies that there is high correlation between the observed and foreseen values.

R Square is the amount of deviance that is seen in dependent variable which is given by the independent variables. This shows the strong point of the link and as the value here is.891 there is high association strength.

Adjusted R square is a value given to the adjustment to the R square that disciplines the addition of extraneous predictors to the model. Here the value shows that there would not be any substantial predictability to the dependent variable.

ANOVAa

Model

Sum of Squares

df

Mean Square

F

Sig.

1

Regression

72.103

6

12.017

54.418

.000b

Residual

8.833

40

.221

Total

80.936

46

Table 5.7 ANOVA

INTERPRETATION

The ANOVA test is carried out to check if the model is arithmetically substantial. The p value is to be ensured to be zero to have a statistically substantial model. It is used when more than one factor can be influenced and should be distinguished from randon effects. The ANOVA test is carried out to check if the model is arithmetically substantial. . This model here is having the required p value and the significance value.

Coefficients

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

Correlations

Collinearity Statistics

B

Std. Error

Beta

Zero-order

Partial

Part

Tolerance

VIF

(Constant)

-.901

.985

-.91

.36

OVERPRODUCTION

.288

.112

.191

2.57

.01

.65

.377

.13

.496

2.0

IMPROPER_PACKING

.519

.122

.391

4.26

.00

.84

.559

.22

.324

3.0

POOR_MATERIAL_HANDLING

.645

.123

.421

5.26

.00

.86

.640

.27

.427

2.3

WAREHOUSE_EFFECTIVENESS

.029

.167

.011

.173

.86

.36

.027

.00

.689

1.4

MISMANAGED_LOGISTICS

-.503

.148

-.190

-3.3

.12

-.45

-.47

-.1

.874

1.1

LACK_OF_TCV

.101

.131

.049

.767

.04

-.30

.120

.04

.675

1.4

Table 5.7 Coefficients

INTERPRETATION

The B value gives the relationship that each of the stated autonomous variables have with the dependent variable. The standard error indicates the boundary up to which the values would vary across different samples. The t and the sig. values are those values that represent the t statistics.

As the significance value for overproduction, improper packing, poor material handling and lack of temperature controlled vehicle is below 0.05, it means that the null hypothesis is rejected and in other two case i.e. warehouse effectiveness and mismanaged logistics the null hypothesis is accepted.

Charts

Fig 5.8 Histogram

Fig 5.9 Normal P-P Plot

5.4 TESTING OF HYPOTHESIS

The hypothesis that is to be tested by the tests is:

H0: Overproduction, Improper packing, poor material handling, ineffective warehouse, mismanaged logistics and Lack of Temperature controlled vehicle has an impact on wastage.

H1: Overproduction, Improper packing, poor material handling, ineffective warehouse, mismanaged logistics and Lack of Temperature controlled vehicle does not have an impact on wastage.

The regression analysis has helped us prove the hypothesis of Overproduction, Improper packing, poor material handling and Lack of Temperature controlled vehicle as there p value was below 0.05 and the hypothesis of ineffective warehouse, mismanaged logistics are rejected as their p value is above 0.05. It thereby proves which variable directly affect food wastage in supply chain.

6.1 FINDINGS

1>A lot of wastage happens in the farmers end of supply chain due to overproduction.

2>Improper packaging is a major contributor towards food wastage.

3>Material handling which is a major contributor of food waste is not given importance.

4> Temperature controlled vehicle is lacking in food supply chain.

6.2 CONCLUSION

The significance of the whole study can be concluded by saying that food wastage is an outcome of overproduction, improper packing, poor material handling techniques and lack of temperature controlled vehicles. The waste can be reduced to a significant level if proper investment is done in back end infrastructure, increasing the quality aspect in every process and standardizing the material handling techniques.

6.3 SUGGESTIONS

1>One solution for this problem is to allow states to produce those that are grown naturally, this will help reduce the wattage caused due to overproduction.

2> Improper packing causes not only loss in volume but also its value. The currently used jute bags are not able to prevent moisture and prevent pest. So there is a need for low cost 50 kg bag which prevents from moisture and pest.

3> Distributed production of certain products like wheat and rice which reduce need for transportation thus reducing a lot of waste produced in material handling. A proper training in manual handling should be given to the workers so that the damage caused can be reduced.

4> There should be more investment in the cold chain segment. Multiple purpose and various temperature control vehicles should be introduced so that capacity can be utilized to the maximum. It helps to reduce waste caused in perishable goods segment.

6.4 SUGGESTIONS FOR FURTHER RESEARCH

Food wastage is a high priority problem. Food wastage is influenced by different entities in the supply chain. Further research can be done by taking each entity in consideration and how food wastage can be reduced by integrating these entities.

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