Innovations in
Post-Harvest
Management of
Agriculture
produce- Case
studies
By
Aravind T.
GRIIT
Prof. Anil Gupta
INTRODUCTION
This report talks about three organizations which tried to bring innovations
into the management of post-harvest management of agriculture produce.
These three are selected in terms of scale they would be needing for
replicability in other areas or scenarios. All talks about vegetable produce
and this should be noted.
WHY IS THIS IMPORTANT?
The current annual production of fruits and vegetables combined in India is
227 million tonnes (77 for fruits and 150 for vegetables) and the
compounded annual growth rate for the same ranges between 5-6 percent.
As per Bennett’s law, as the economy grows and per capita income rises,
the consumers shift from staple dietary products to high value products like
fruits and vegetables. So, the demand of fruits and vegetables is going to
grow exponentially in the coming years. However on the other hand, India
is incurring post-harvest losses of more than 2 lakh crore every year and
only 22% of the fruits and vegetables produced reach the wholesale market.
Clearly, there is a significant need for alternative marketing channels for
reducing Post-Harvest losses. While there are production constraints,
research also shows the following supply chain post-harvest constraints:
1
1)
Post harvest losses resulting in huge economic loss
2)
Unplanned and non-existent infrastructure
3)
Unable to build economies of scale
4)
Insufficient cold storage space
5)
Inefficient transportation
6)
Imperfect markets
Along with it, the case of multiple intermediaries in post-harvest supply
chain management adds up to marketing cost which reduces the share of
farmer in the final price is not sustainable.
The typical marketing infrastructure (supply-chain till reaching the market)
for the marketing is as follows:1)
Farmers
2)
Agents or Auctioneers
3)
Wholesalers
4)
Cart vendors or retailers
5)
Consumer
Keeping this in mind, three models are discussed further.
KAUSHALYA FOUNDATION- KNIDS GREEN PVT. LTD.
Kaushlendra Kumar, an IIM-Ahmedabad alumnus started this venture to
increase the potential and income of small farmers. NGO team works
towards capacity building of farmers whereas KNIDS try to provide assured
market for the produce of small and marginal farmers.
In this model, NGO kaushalya foundation provides all the back end support.
The details of their intervention is as follows:1) Baseline study to understand key aspects such as crop suitability,
production volume potential, understanding existing infrastructure
and present marketing platforms available to farmers.
2) The specific clusters based on their potential discovered through
baseline study are identified and customized implementation plan is
formulated.
2
3) Execution of plan starts in which they call as Farmer interest Groups
(FIG’s) are formed.
4) These FIG’s are trained and exposed to field demonstrations of
scientific practices.
5) In recent times, the model has evolved to form Farmer producer
companies also.
Why does this evolution towards FPO’s?
Aggregation models holds major significance for small and marginal
farmers in increasing their income and making them economically viable.
Actually aggregation brings in both cost reduction and increase in price
realization. Cost reduction through minimization of input costs and resource
pooling. Price realization as scale builds up the larger access to markets and
also further increasing the bargaining power. Apart from this, the
aggregation models in the form of FPO’s can attract incentives and policy
assistance from institutions like SFAC (small farmer’s Agri-consortium).
FPO’s also increases the access to finance and already discussed availability
of inputs at competitive prices.
Role of NGO in the model
Kaushalya foundation’s concept is collective production and marketing
through farmer’s organizations. Presently, its operations are in four blocks
in Bihar with an estimated base of 3500 farmers. Farmer Producer Company
in each block is headed by a block project manager with 8 local resource
personnel supporting him. Interestingly, the block project manager
designate is a farmer himself with track record of leadership. He monitors
the field activities and acts as a liaison between NGO and farmer Producer
Company. The local personnel do all the extension services like imparting
technical training for scientific crop management. The NGO plays a critical
3
role in linking farmer to KNIDS which acts as the ultimate link of the valuechain in this model.
The role of KNIDS Green
Knids Green bare-beginnings were with an idea of selling pre-packaged
branded vegetables through refrigerated pushcarts. The model scaled up
through association of NGO as it strengthened the procurement.
Knids Green primary processing and distribution centre is located in Patna
with an area of 10,000 square meters. This point is the aggregation point
and cleaning, sorting, grading, packaging, branding and bar coding happens
at this place. It has storage capacity of 200 metric tonnes and cold storage
capacity of 10 tonnes. Cold storage is of low cost innovation. KNIDS Green
uses 1 ton capacity pickup trucks to bring produce from collection centre to
distribution centre. KNIDS GREEN also possesses 30 push carts and a
vegetable retail store.
The operations
At present, KNIDS Green is procuring around 45% from farmers (total
statistics given later) and 55% from the whole sale market. It particularly
procures certain vegetables like Potato, Onion and Tomato from whole sale
market. Procurement from farmers (direct procurement) is a daily activity
and it happens through 15 collection centres which are located in a 50 km
radius in four blocks. Payments are made weekly. Patna mandi price is the
base for price fixation to make payments.
The vegetables are cleaned and sorted in primary processing centre and then
packed in plastic bags. The vegetables are branded as “Samridhi” and bar
coded.
The vegetables are sold through refrigerated push carts using low cost
technology of temperature control. Presently existing 30 push carts are
4
operated by road side vendors (hired employees). The carts location is a
strategic placement considering the potential sales. Each cart is estimated to
sell Rs.3000 to Rs.4000 per day. The company also runs a retail store by
name “Bihar Fresh.” Customers can buy through the website and can avail
home delivery. The institutional sales are also a proportionate chunk where
hotels, restaurants and caterers form the pie. These sales are through a
forward contract of one year. The contract agreements doesn’t contain the
price and it depends on referral price i.e., Patna mandi.
From farmers’ perspective, KNIDS model seems superior to traditional
mandi model as farmer doesn’t incur transportation cost, transportation
losses, shrinkage losses and commission agent charges. These costs are
expected to be 25% - 40% of the final price realization thus catering a huge
value to the customer. (Commission agent himself charges 10% of the final
price realization).
Advantages of this model
Aggregation and cluster based approach is building up scale and it’s easy
to disseminate technology as communication becomes quite easy. Spot pick
up of the produce offering both comfort and value to the farmer. Forward
Contracts with Ho-Re-Ca segment adds certainty to the model and also
provides chance to cultivate high-value exotic vegetables suitable to the
agro-climatic conditions. Sale through refrigerated carts gives required
mobility to strategic locations, provides advertisement for brand Samridhi.
Refrigration is a low-cost innovation providing value to customers in the
form of fresh vegetables. Branded and bar coded products providing
assurance to customers in terms of quality and eliminating the
inconvenience of bargaining which is high in vegetable sales.
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Final take on the model
KNIDS achieved break-even in a few initial years only and this model
brings in certain value to both farmer and customer by reducing layers of
intermediaries in the model. This also brings new things to vegetable sales
like branding, barcoding etc.
But the point also to be noted is that the further scaling up of model requires
more investment in infrastructure. The front player which is a private player
determines the scalability of this model. In short, this model suffers from
scalability issues as of now because of limited procurement capability of the
front-end KNIDS GREEN and this is the top reason for not being able to
procure the entire produce from the farmer
Institut
Refriger
ional
Growth
ated
sales
Refriger
in
carts
Instit
ated
refriger
contribu
ution
Volume
carts
ated
tion
(in
contribu
carts
total
sales
institutio revenu
in al
contrib
Growth
ution
in
in total
Financi
metric
Growt
Revenue
tion (in segmen
revenue
(in
nal sales e
al year
tonnes)
h
(in ₹’s)
₹’s)
in %age
₹’s)
segment
t
200708
758580
379290
50%
200809
6
90
50%
3896
720
860%
8658885
200910
%age
3792
75
4762387
1156%
55%
1232016
1540
114%
20881641
8
498
927%
45%
120%
41%
8561
159%
59%
473
in
2010-
2162799
2310
11
50%
34883867
201112
76%
2650
15%
41220082
3
24%
65%
2281014
2320
-12%
38016901
1
-4%
24%
7029
76%
35%
5%
40%
1520
-15%
Volume (in metric tonnes)
3000
2500
2000
1500
1000
500
0
639
1442
Analysis based on the Financial Summary
7
62%
2679305
201213
8
8218
60%
6760
Revenue
50000000
40000000
30000000
20000000
10000000
0
Revenue Vs Volume Growth
150
100
50
0
-50
2009-10
2010-11
Volume Growth
8
2011-12
2012-13
Revenue Growth
Per tonne Growth percentage
20
15
10
5
0
2008-09 2009-10 2010-11 2011-12 2012-13
MARKET LED EXTENSION BY SYNGENTA FOUNDATION INDIA
Syngenta Foundation India is a not for profit entity supported by Syngenta
Foundation for Sustainable Agriculture and Syngenta India. Apart from
many other programmes, Syngenta Foundation India (SFI) is running a
program called “Market led extension” in which it is raising small and
marginal farmer’s (Vegetable growers mainly) income through collective
marketing.
Though SFI works in 6 project locations, we chose to look at SFI-Jawahar
as it is the most successful among other project locations.
In Jawahar area, the tribals are more tilted towards subsistence paddy
farming and it educates farmers about vegetable crops as they fetch higher
income. It follows a cluster based approach and it identifies potential
villages based on the farmer profile, possible acceptance for scientific
practices and then it intervene in those villages to support vegetable
cultivation.
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The surveys are also conducted to assess the demand of vegetables in the
nearby markets. Crop planning actually happens in link to the demand of
various vegetables across various time-lines. They do sensitivity analysis to
link harvest times and market demand to fetch optimal price for the farmer.
SFI works in 6 clusters of villages in Jawahr with 3 NGO’s. A field officer
for every cluster is appointed by NGO through the funding received from
SFI. A support of 7 member expert team in Agriculture is provided by SFI
who takes care right from sowing, intercultural activities, and marketing
issues.
SFI supports farmers in different ways and in different stages which can be
broadly classified as following:Pre-production Support
Primarily, this model works on the basis of aggregation model. SFI forms
groups with 10-15 farmers and these groups are formed based on the
farmer’s cultivation interests mainly. Training related to procurement of
inputs, raising seedlings, managing nurseries etc., are given through
different techniques. Improved techniques are shown to them through field
demonstrations, pre-sowing exposure visits etc.
Production support
Crop planning is a function of agro climatic zone, resource availability and
marketability analysis. In Kharif, slopy areas (Jawhar is a hilly-area) will be
used for vegetable cultivation. Field preparation, spray schedules of
pesticides, fertilizer use are closely monitored.
Marketing Support
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Price information is the important market support in this model. The regular
price information in the nearby mandis is being provided to the farmers thus
aligning the post-harvest activities of the farmers towards better price
realization. The contacts with commission agents at mandis helps SFI in
getting timely price information which is provided to farmers through field
staff. Generally the group leaders coordinate with field staff in these
activities. This helps farmers in making decisions such as harvesting time,
location to sell etc., other support in the form of consultancy for packaging
material, transportation of the produce.
For aggregation of produce, a low cost collection centre has been
constructed which is used by various groups. The pickup trucks of 2 tonnes
capacity are available to farmer groups to use on shared basis and the
produce is transported to mandis through these. Farmers groups bear all the
costs though credit support may be provided in same cases.
Though at very minimal scale, SFI also provides export linkage to chilli
farmers. The export linkage is estimated to increase the returns by 10- 12 %.
In case of this linkage, the produce is also collected from farms thus no
transportation cost incurred by farmers.
Analysis
In short, the model is such that SFI builds the scale of the activities through
aggregation model. It enables the farmers to procure inputs in aggregation
thus making them avail certain discounts. On the other hands, farmers to
sell their produce to mandis through collective transportation. The beforehand available price information brings the certainty in decisions regarding
transportation of produce. This reduces the cost of irrelevant transportation
which is quite common and significant for other farmers. Sometimes, high
transportation cost makes the economies unviable because of the prevailing
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market prices. The support of packaging material and handling material
(like crates in case of tomatoes) reduces the wastage during transportation.
Impact analysis of the model
The aggregation model which on back-end becomes collective farming and
marketing of produce in clusters on front-end increases the production scale
and brings down the costs due to sharing of resources in every form. Cluster
approach being crop-specific makes market linkage quite feasible.
The target of this model being poor tribal farmers, it takes a lot of effort to
make it a feasible standalone sustainable enterprise. But cluster based
marketing approach and collective production considering the marketability
and pooling of resources keeps this model scalable. Presently SFI is trying
to focus on institutional building by converting this into Farmer Producer
Organization on one side and micro-enterprises on other side like poly
house nurseries, agri-entrepreneurs on other side. Still, Price volatility in
vegetables is an issue and the institutions addressing this issue is a highly
optimistic take.
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KRISHI STAR MODEL
(Identifying niche products for price stabilization)

The idea is to identify products suitable for niche markets and to
develop them in house from the raw material available with farmers.

The first product identified was “peeled tomatoes” which is used in
pastas. The restaurants used to import.

Krishi star team identified that the peeled tomatoes can be developed
in India with minimal cost and identified 400 restaurants in Mumbai
alone as a market in which they could capture around 40 restaurants
till now.

Krishi star procure tomatoes from a BAIF supported FPC’s and peel
them in a mango-pulp factory which they hire for the time when it
is not used for mango pulp processing.

Then they market the product through “Krishi Vita”

Recently they got funding of ₹18 lakhs from a CSR arm of an MNC
to identify and develop more such products
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REFERENCES
1. Kaushalya Foundation-KNIDS, Rekha Kumari,
http://www.kaushalyafoundation.org/
2. Krishi star, Bryan Lee, www.krishistar.com
3. Syngenta Foundation India, Baskar Reddy, Executive Director,
http://www.syngentafoundation.org/index.cfm?pageID=182
4. http://www.fao.org/fileadmin/templates/ess/documents/meetings_a
nd_workshops/GS_SAC_2013/Improving_methods_for_estimatin
g_post_harvest_losses/Final_PHLs_Estimation_6-13-13.pdf
5. http://tnau.ac.in/eagri/eagri50/HORT381/pdf/lec01.pdf
6. http://articles.economictimes.indiatimes.com/2013-0901/news/41663310_1_fruits-vegetable-production-harvest
7. http://www.apcoab.org/uploads/files/1312289562PHT%20Proceed
ings.pdf
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