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Paddy soon after harvesting, duetoits importance as basic food, the largest area under cultivation and the prevailing agro economic conditions of farmers, constitutes a wide length and partners in its supply chain. Once paddy is hulled in mills it gives the main product rice, cut rice and by products husk and rice bran. This paper attempts to find out through empirical research, the practices, end products and estimates of value creation, value realization and value loss to the stakeholders across its extended value chainof paddy in the state of Karnataka. With the existing estimates for legitimate variables of the analysis, it is found that supply chain of paddy is a very complex processdominatedbynetwork of intermediaries called “mill owners and stockists” who make an investment worth not less than Rs.8000 Crores.(where $13.3 bn should be $1.33 bn) every year during harvesting through stocking, milling and packing and create a value above 45% of their investment in the value chain. In the process it is observed that farmer is the only stakeholder who is paid least and supply chain management of paddy suffers from huge losses to the government as more than 65% farmers sell paddy to the local agents of “mill owners and stockists”. Taking stock of the issues and opportunities, a conceptual model is suggested using e-governance and Public Private Partnership(PPP) in managing the supply chain of paddy which ensures fool proof mechanism not only to control prevailing losses but also arrives at a unique wealth creation opportunity, which can redefine the face of agricultural developments in the state.

Value Chain Analysis for Derived products from Paddy: a Case of Karnataka State