1. Fruits and Vegetables (F&V) Supply Chains in India: Emerging Models and Issues Meeta Punjabi Vijay Sardana FAO & MoA New Delhi, India New Delhi, India

2. Outline Background of the Study Background of the Study Literature Review: Situation in other Developing Countries Literature Review: Situation in other Developing Countries Emerging Models Emerging Models Requirements for setting up Supply Chains Requirements for setting up Supply Chains Issues in Setting up the Chain Issues in Setting up the Chain Areas of Intervention by Govt. agencies/donor groups Areas of Intervention by Govt. agencies/donor groups Examples: Co-ordination between different players in setting up the chain (Role of Govt, NGO, Credit, supermarket chains) Examples: Co-ordination between different players in setting up the chain (Role of Govt, NGO, Credit, supermarket chains)

3. Background of the Study The marketing of F&V in India is changing dramatically The marketing of F&V in India is changing dramatically Change from the traditional markets to modern formats Change from the traditional markets to modern formats Entry of big retail names – Reliance, ITC, Aditya Birla Group, Godrej, Bharti Airtel, Adani Group Entry of big retail names – Reliance, ITC, Aditya Birla Group, Godrej, Bharti Airtel, Adani Group Initiation of organized retailing and wholesaling of F&V: Initiation of organized retailing and wholesaling of F&V: Reliance Fresh, Chopal Fresh, Namdhari’s Fresh Reliance Fresh, Chopal Fresh, Namdhari’s Fresh FAO and MoA undertook the current study to understand the ground situation FAO and MoA undertook the current study to understand the ground situation Emerging models for backward and forward linkages Emerging models for backward and forward linkages Issues in setting up the chains Issues in setting up the chains

4. Literature Review The perception of retail chains being a phenomena of the developed countries has changed significantly The perception of retail chains being a phenomena of the developed countries has changed significantly Significant presence in developing countries – Latin America, Asia, Africa Significant presence in developing countries – Latin America, Asia, Africa What does retail chains have to do with development? What does retail chains have to do with development? Development perspective: farmers involved in modern value chains earn much higher by bypassing the traders Development perspective: farmers involved in modern value chains earn much higher by bypassing the traders Large and medium farmers have the resources to meet the requirements of the chains, easier to co-ordinate Large and medium farmers have the resources to meet the requirements of the chains, easier to co-ordinate Development efforts: linking small farmers to these chains Development efforts: linking small farmers to these chains

5. Emerging Models Co-operative (HOPCOMS, Karnataka; Mother Dairy, Delhi) Co-operative (HOPCOMS, Karnataka; Mother Dairy, Delhi) Exports with EUREPGAP Certification (Namdhari Fresh, Bharti Airtel) Exports with EUREPGAP Certification (Namdhari Fresh, Bharti Airtel) Farm to Fork -- Complete Chain (Godrej, Reliance, ITC) Farm to Fork -- Complete Chain (Godrej, Reliance, ITC) Wholesaling – (Adani Fresh, Metro) Wholesaling – (Adani Fresh, Metro) Front end – Convenience Stores (Food Bazaar, 3Cs) Front end – Convenience Stores (Food Bazaar, 3Cs) Economy Stores (Subhiksha) Economy Stores (Subhiksha)

6. Requirements for Setting Up the Chain Infrastructure (Back end to front end) Collection center Collection center Soil-testing Laboratory Soil-testing Laboratory Packing House/Distribution Center Packing House/Distribution Center Packing infrastructure -- tables Packing infrastructure -- tables Cold-Storages Cold-Storages Transportation – Refer trucks Transportation – Refer trucks Retail outlets Retail outlets Real estate Real estate Investment in refrigeration facilities at the stores Investment in refrigeration facilities at the stores

7. Requirements for Setting Up the Chain Knowledge Inputs Extension advice to farmers: Extension advice to farmers: use of different varieties use of different varieties production techniques production techniques harvesting (time of harvesting, harvesting techniques) harvesting (time of harvesting, harvesting techniques) grading/sorting, packaging grading/sorting, packaging Setting up Grades and Standards for purchase by the company Setting up Grades and Standards for purchase by the company Training staff at packing centers (grading, sorting, packing) Training staff at packing centers (grading, sorting, packing) Post-harvest experts (handling and storing needs of different F&V) Post-harvest experts (handling and storing needs of different F&V) Cold Storage Technology (?) Cold Storage Technology (?) Packaging Technology for Fresh Packaging Technology for Fresh

8. Requirements for Setting Up the Chain Co-ordination Developing linkages with farmers Developing linkages with farmers Inputs for farmers (Credit, seed, fertilizers, pesticides, harvesting tools, packaging materials) Inputs for farmers (Credit, seed, fertilizers, pesticides, harvesting tools, packaging materials) Information flow Communication regarding the quantity and quality needs in the company Communication regarding the quantity and quality needs in the company Communicating the requirements to the farmers Communicating the requirements to the farmers

9. Issues in setting up the chains Developing linkages with farmers Developing linkages with farmers Post-harvest manpower Post-harvest manpower Commitment from farmers Commitment from farmers Infrastructure (level of operation, not everyone needs to invest or can invest in packing house) Infrastructure (level of operation, not everyone needs to invest or can invest in packing house) APMC Act (paper work, operational hindrance, time involved, grading, sorting, packaging) APMC Act (paper work, operational hindrance, time involved, grading, sorting, packaging) Farmer’s training in pre-cooling, storing, grading, sorting, packaging Farmer’s training in pre-cooling, storing, grading, sorting, packaging Packaging technology for fresh Packaging technology for fresh

10. Areas of Intervention by Govt/Donor Groups Create an enabling policy environment that promotes mutually beneficial partnerships between farmers and organized sector 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, To give credibility to the project (low faith/fear) in dealing with corporations, Develop linkages with small farmers Develop linkages with small farmers Training to farmers regarding post-harvest issues 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 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?) Investment in transportation infrastructure – refer trucks, (import taxes? subsidy?) Air-port infrastructure for shipping, cold-storages, Air-port infrastructure for shipping, cold-storages,

11. Example (USAID) USAID/Michigan State University Partnerships in Food Industry Development in Nicaragua, (Weatherspoon and Membreño, 2004). US university facilitates the market connections for small farmer organisations with the local supermarket chains, US university facilitates the market connections for small farmer organisations with the local supermarket chains, NGOs (Technoserve) provide technical assistance NGOs (Technoserve) provide technical assistance Supermarket chains -- CSU and La Colonia provide the guaranteed market Supermarket chains -- CSU and La Colonia provide the guaranteed market Donor funds from USAID provide the financing. 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 The project has a graduation policy whereby the small farmer organisations progressively take over the needed investments and then maintain the market link themselves

12. Example Governments, NGOs, and donors can facilitate tri- or quadri- partite relationships that facilitate smaller farmer participation. Example, melons in Indonesia, Reardon (2004) Example, melons in Indonesia, Reardon (2004) Small farmer organisation (Makar Buah), Small farmer organisation (Makar Buah), Supermarket chain (Carrefour), Supermarket chain (Carrefour), Seed/chemical company (Syngenta), Seed/chemical company (Syngenta), Government extension programme, Government extension programme, Specialised/dedicated wholesaler (Bimandiri) Specialised/dedicated wholesaler (Bimandiri) Carrefour provided guaranteed market, Syngenta the financing, and the wholesaler the intermediation and coordination Carrefour provided guaranteed market, Syngenta the financing, and the wholesaler the intermediation and coordination