ENTREPREUNEURIAL LEADERSHIP
ASSIGNMENT – 01
VEGETABLE SUPPLY CHAIN IN TAMIL NADU
GRINTY BABU
TTGI170306
HC 2017
INTRODUCTION
In a collaborative effort, ICRISAT, with the Department of Agriculture Marketing and Agribusiness,
Government of Tamil Nadu, has overseen the implementation of the Tamil Nadu Supply Chain
Management (TNSCM) project. Recently, they designed and executed initiatives to connect farmers,
processors, retailers and consumers directly and swiftly in Tamil Nadu state. This could serve as a
model to be scaled up in other regions too as India tries to assist farmers during the nationwide
lockdown due to COVID-19.
ICRISAT and Tamil Nadu government collaborative initiative
Over the past two years, TNSCM has established 64 Primary Processing Centers (PPCs) for fruits,
vegetables and other perishables across 10 districts of Tamil Nadu. The established PPCs were
handed over to local Farmer Producer Organizations (FPOs) for their operations and management.
As a result, FPOs are aggregating produce from their member farmers through PPCs and producer
networks, selling directly to consumers through mobile shops and to private food marketing
companies and HoReCa (Hotels; Restaurants; Café). For instance, the FPO Tamil Nadu Banana
Producer Company Ltd. procures and packs vegetables at Pochampalli in Krishnagiri district,
supplying 5-6 tons of fresh vegetables to Tamil Nadu Horticulture Development Authority’s
(TANHODA), Adyar Ananda Bhavan, etc. Totally, about 27 FPOs are aggregating almost 120
tons/day of fruits and vegetables directly from farmers.
Ahimsa Organics
Ahimsa Organic, a farmer producer company, has joined hands with the state-owned Tamil Nadu
Supply Chain Management (TNSCM) to doordeliver vegetables sourced from farmers in Krishnagiri
and Dharmapuri districts. Taking care to focus on hygiene, the vegetables are sorted and cleaned at
Palacode, under the supervision of officials from the Tamil Nadu agriculture marketing wing. These
are packed in bags, each containing 5kg of assorted vegetables and transported in disinfected minitrucks for distribution to homes in Chennai and Coimbatore. Ahimsa has tied up with RISE, an NGO,
for distribution in Chennai, besides Sowkea, a private firm that sells vegetables online. For
Coimbatore, Maasilla Vegetables, a social enterprise in R S Puram, has come on board. It is planning
to work closely with more organisations to create a supply chain connecting major cities in the state.
Cash Flow with Government Financial Assistance
To create an enabling market and policy environment of business during these challenging times, the
Tamil Nadu government passed a Government Order (GO) in April 2020 to facilitate the following:
1. A revolving fund of ₹ 3-5 lakhs (≈US$ 4000-6600) per FPO to eight FPOs with a total outlay
of ₹ 32 lakhs (≈USD 42,250) from the Market Committee Funds for three months.
2. ₹ 10 lakhs (≈13,200 USD) under Mezzanine Capital Assistance Scheme for each eligible FPO
involved in supply of fruits, vegetables and other essential commodities. The Capital
Assistance provided in the first year can be redeemed at the end of the fifth year.
3. Waiver on rents for fruits and vegetables stored in the government-operated cold storage
during the lockdown duration.
4. Waived market fees for transactions through government-regulated wholesale markets until
the end of May 2020.