Challenges in Agricultural Supply Chains and Collateral Management
- Price Volatility:
- The prices are volatile due to the changes in demand, weather conditions, and global trends.
- Post-Harvest Losses:
- High losses are incurred because of poor handling, storage, and transportation.
- Poor Storage Conditions:
- Poor infrastructure results in spoilage and degradation of quality.
- Challenges for Financial Institutions:
- The financial institutions face problems in giving credit because there is no risk-free mechanism for collateral management.
Understanding Collateral Management
- Definition:
- Obtaining loans or credits with collateralized management and supervision of warehoused products.
- Credit Access:
- Facilitates the acquisition of loans by farmers, traders, and stakeholders, as the collateral provides an assurance.
- Main Ingredients:
- Warehouse Management, Insurance, Quality & Quantity assurance, and Transparent Financial transactions.
