Fruits and Vegetables (F&V) Supply Chains in
India: Emerging Models and Issues
Meeta Punjabi
Vijay Sardana
FAO & MoA
New Delhi, India
Outline
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Background of the Study
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Literature Review: Situation in other Developing Countries
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Emerging Models
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Requirements for setting up Supply Chains
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Issues in Setting up the Chain
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Areas of Intervention by Govt. agencies/donor groups
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Examples: Co-ordination between different players in setting
up the chain (Role of Govt, NGO, Credit, supermarket chains)
Background of the Study
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The marketing of F&V in India is changing dramatically
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Change from the traditional markets to modern formats
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Entry of big retail names – Reliance, ITC, Aditya Birla Group,
Godrej, Bharti Airtel, Adani Group
Initiation of organized retailing and wholesaling of F&V:
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Reliance Fresh, Chopal Fresh, Namdhari’s Fresh
FAO and MoA undertook the current study to understand the
ground situation
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Emerging models for backward and forward linkages
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Issues in setting up the chains
Literature Review
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The perception of retail chains being a phenomena of the
developed countries has changed significantly
Significant presence in developing countries – Latin America,
Asia, Africa
What does retail chains have to do with development?
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Development perspective: farmers involved in modern value chains
earn much higher by bypassing the traders
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Large and medium farmers have the resources to meet the requirements
of the chains, easier to co-ordinate
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Development efforts: linking small farmers to these chains
Emerging Models
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Co-operative (HOPCOMS, Karnataka; Mother Dairy, Delhi)
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Exports with EUREPGAP Certification (Namdhari Fresh,
Bharti Airtel)
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Farm to Fork -- Complete Chain (Godrej, Reliance, ITC)
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Wholesaling – (Adani Fresh, Metro)
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Front end – Convenience Stores (Food Bazaar, 3Cs)
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Economy Stores (Subhiksha)
Requirements for Setting Up the Chain
Infrastructure (Back end to front end)
 Collection center
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Soil-testing Laboratory
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Packing House/Distribution Center
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Packing infrastructure -- tables
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Cold-Storages
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Transportation – Refer trucks
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Retail outlets
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Real estate
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Investment in refrigeration facilities at the stores
Requirements for Setting Up the Chain
Knowledge Inputs
 Extension advice to farmers:
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use of different varieties
production techniques
harvesting (time of harvesting, harvesting techniques)
grading/sorting, packaging
Setting up Grades and Standards for purchase by the company
Training staff at packing centers (grading, sorting, packing)
Post-harvest experts (handling and storing needs of different
F&V)
Cold Storage Technology (?)
Packaging Technology for Fresh
Requirements for Setting Up the Chain
Co-ordination
 Developing linkages with farmers
 Inputs for farmers (Credit, seed, fertilizers, pesticides,
harvesting tools, packaging materials)
Information flow
 Communication regarding the quantity and quality needs in the
company
 Communicating the requirements to the farmers
Issues in setting up the chains
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Developing linkages with farmers
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Post-harvest manpower
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Commitment from farmers
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Infrastructure (level of operation, not everyone needs to invest
or can invest in packing house)
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APMC Act (paper work, operational hindrance, time involved,
grading, sorting, packaging)
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Farmer’s training in pre-cooling, storing, grading, sorting,
packaging
Packaging technology for fresh
Areas of Intervention by Govt/Donor Groups
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Create an enabling policy environment that promotes mutually beneficial
partnerships between farmers and organized sector
To give credibility to the project (low faith/fear) in dealing with
corporations,
Develop linkages with small farmers
Training to farmers regarding post-harvest issues
Investment in Infrastructure: Not all firms dealing in fresh fruits and
vegetables have the level of operations to set up cold stores and packing
houses. To give a level playing field to the smaller firms, govt. investment
in cold storages and packing houses will be useful.
Investment in transportation infrastructure – refer trucks, (import taxes?
subsidy?)
Air-port infrastructure for shipping, cold-storages,
Example (USAID)
USAID/Michigan State University Partnerships in Food Industry
Development in Nicaragua, (Weatherspoon and Membreño, 2004).
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US university facilitates the market connections for small
farmer organisations with the local supermarket chains,
NGOs (Technoserve) provide technical assistance
Supermarket chains -- CSU and La Colonia provide the
guaranteed market
Donor funds from USAID provide the financing.
The project has a graduation policy whereby the small farmer
organisations progressively take over the needed investments
and then maintain the market link themselves
Example
Governments, NGOs, and donors can facilitate tri- or quadripartite relationships that facilitate smaller farmer
participation.
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Example, melons in Indonesia, Reardon (2004)
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Small farmer organisation (Makar Buah),
Supermarket chain (Carrefour),
Seed/chemical company (Syngenta),
Government extension programme,
Specialised/dedicated wholesaler (Bimandiri)
Carrefour provided guaranteed market, Syngenta the
financing, and the wholesaler the intermediation and
coordination