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The Role of Logistics in Agri-Food Supply Chain

By Cat Dewinta - March 22, 2021

The Role of Logistics in Agri-food Supply Chain

The agri-food sector plays a vital role in a country’s growth. It acts as a primary contributor to the Gross Domestic Product (GDP) of many countries in the world, especially the developing ones. Handling the logistics processes of such agricultural products is indeed intricate. The role of logistics is to safeguard the quality of and well-being of the products, including livestock produced and transported to different locations within the country. Wherever you are in the world, the role of logistics in the agri-food supply chain has become increasingly recognized by many organizations globally.

Logistics management in the agricultural industry ensures that agricultural goods have a continuous flow from manufacturers/suppliers to producers and eventually to every customer’s doorstep. The most necessary activities in the agri-food supply chain and logistics management are agricultural production, acquisition, storage, handling, transportation, and distribution.

Effective logistics management is essential to guarantee customer satisfaction and demands are met on time with high-quality products. Moreover, agri-food supply chain handlers should minimize distribution costs, improve the circulation of agricultural goods, reduce unnecessary losses, and strive for environment-friendly and compliant logistics.

Recently in the Philippines, prices for agricultural products such as vegetables, fruits, and meat have drastically increased. It skyrocketed with an average percentage increase of 50%-90%, which greatly affected the budget of every Filipino household. The long-term neglect of providing ample support to agribusinesses resulted in a price increase in these products’ production and transportation cost. But the light at the end of the tunnel may be found once the current Build, Build, Build program is completed. This government project includes improving public infrastructure, including farm-to-market roads that is a challenge in transporting agricultural goods from the countryside.

The recent events in the Philippines have reflected how important the role of logistics is in every sector of the economy. An effective success in production systems and in-time deliveries will translate into more efficient and affordable operational costs, thus having a low price in different commodity goods. Efficiency in logistics and the application of technology will help manufacturers, wholesalers, and retailers sell more products at lower prices.

Logistics should also meet new objectives in terms of operational efficiency and agricultural policies, which include:

  • Protection of the environment
  • Sustainable distribution practices
  • Food safety and security
  • Animal welfare (for transporting livestock)

The Philippines have so much work to do to catch up with its Southeast Asian neighbors, especially Thailand, Malaysia, and Vietnam, in improving the competitiveness of its agribusiness sector. Let us hope that more projects will be established to increase support in the agri-food supply chain.