The Informal food sector is playing an important role in the national economy of India. An informal economy is the part of any economy i.e. neither taxed nor monitored by any form of government. Although, the informal sector makes up a significant portion of the economy in developing countries, it is sometime stigmatized and unmanageable.
The food supply chain in the informal sector refers to the network of activities and processes involved in producing, processing, distributing and selling food outside the formal and regulated market systems. In most of Asian countries, the informal food supply chain has dualistic structure with majority of the market share being traditional and small quantum being modern. As such, informal food supply chains complemented the formal food industry, its networks and was an unofficial part of food supply security with “tolerable” health risks.
Informal food supply chains existed since humans moved from being hunter-gathers to farming, grazing animals and producing food. Excess from daily harvests from market gardens are traded or sold to neighbours and the general community even today, since the produce or products are freshly harvested and affordable.
Informal food sector is characterized by Small Scale Venders, Local Markets/ Traditional Market and street food, small food hotel, tea stall and unregistered or non-compliant enterprizes. It plays an important socio economic role in meeting food and nutritional requirements of consumers at less prices to the lower and middle income people. Homemade and street foods are described as wide range of ready to eat foods, usually sold by venders and hawkers in the streets. Women are more often active in informal employment than men. The informal sector is playing the vital role in country of the diverse culinary preferences of the population. The Law of food safety and quality leaves out the conditions and mechanism on managing and ensuring safety, quality, sanitation and literacy of food in all steps of food processing to take the health and safety of consumers as well as guarantee fair trade in food industries.
The main sectors of food supply chain are sources, intermediaries and Retail. The sources include production (farming) and wildcatch. Intermediaries include farm produce collector, wholesaler, Retailer and market vendor. Whereas Retail includes wet market, supermarket and convenience stores.
Risk management of food quality and safety issues are required to be addressed at every stage of these sectors to achieve overall objectives and success. Easing bank loans, use of agriculture technology, online business and directly buying from farmers may improve food safety and quality in informal sector.
Fresh produce sales locations were later referred to as “Wet” markets as ice used to cool products which wet the floors as well.
“Dry” section of the market sold sauces, and “dry” produce eg. Garlic, onions, potatoes, etc which do not require ice to be used.
The modern market chain relies on the formal flow of information and guarantees stable supply through contact farming. The main difference between the traditional and modern chain is highlighted by high quality products that are supplied to modern retail channels such as supermarkets and exports. Food safety and traceability, quality assurance and freshness are the primary attributes that set these products apart to attract higher income consumer.
To achieve these attributes, the modern chains took a more coordinated approach to procurement, utilizing contract farming or other organizational structures to manage production and to transfer technologies and knowledge. Agribusinesses as modern suppliers link smallholder farmers to modern supermarkets by setting up a network of farmers and investing in local pre-processing and packaging operations.
Main challenges and recommendations in a typical food supply chain are summarized in the table given below:
| Key areas | Challenges | Recommendations |
| Production | Packaging, sorting, old equipments, lack of mechan- ization, lack of raw material & knowledge, funding, | Standardization of products, setting of new markets, role of regulatory oversight agencies, training & capacity building to farmers – technical assistance, availability of raw material |
| Warehousing | Storage, infrastructure, material handling equipments, temp- erature control, lack of trained manpower | Equip warehouse with required technologies, effective inhouse logistics mechanism, cold storage facility, tracking system, modern assembly lines, temperature control. |
| Logistics | Lack of transportation, information flow, planning, road network, training & awareness program | Remove multilayered-middlemen from the entire supply chain, ensure accessible and affordable logistics system including transportation and warehousing facility in the entire supply chain, clustering & cooperatives by group of small farmers. |
Informal networks in food supply and retail, low-cost transportation / distribution, processing and agricultural productionprovide a base source of nutritious food. Often large population in Asia who depend on food sourced from smallholder growers providing affordable food and rural income.
As such, stabilizing yields, building capacity while managing crops, together with improved logistics / transport infrastructure, promoting productivity and sustainability are vital to local producers / farmers especially the indigenous and rural people in Asia.
There is an urgent need to set up knowledge-based governance and inter-connectivity to ensure resilient and affordable, socio-culturally inclusive access to food supply.
Incentives, training, education, media attention and the use of available handheld technologies should be included in the strategic goal achievements for overall success of the informal food supply sector.
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