Agriculture based Livelihoods: Opportunities and Potential
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Transcript Agriculture based Livelihoods: Opportunities and Potential
"Agriculture based Livelihoods:
Opportunities and Potential"
Access Livelihoods India Conference
17th -18th Nov, 2010
Hotel InterContinental Eros, New Delhi
Reliance Retail Ltd.
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Reliance agri supply chain
Reliance Retail created a farm to fork supply chain for fresh fruits &
vegetables.
Developed base with growers
Retail operations spread across country
Handling of all fruits & vegetables
Different supply chain models as per product need
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Reliance banana supply chain
Established robust end to end supply chain for banana
Inclusive business model – Co-opting the entire agri value chain
Also caters to external customers
Developing upon the strength of existing channel partners
Reduce post harvest losses ,improve quality , better market access
Profitable business proposition - scalable and sustainable model
Win-Win situation - enhanced value to growers, customers and the
company
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Traditional Supply Chain
Growers
• Harvested in
looms
• Transported
loose
• Maturity stage
based on
distance
travelled
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Village level
Consolidators
• Finances
growers
• Arranges
loading and
transportation
• Charges
commission and
cost incurred to
growers
Wholesalers
in terminal
markets
Semi Wholesalers
/ Ripeners
• Auctions in mandi
• Finances
consolidators
• Extends credit to
buyers
• Charges
commission and
recovers advances
& cost
• Uses unscientific practices for
ripening
• Extends credit to retailers.
• Also owns push carts
• Gets known people from villages
to operate them
• Gives a price band to sell
• Operator makes up for any loss
• They get fixed amount per day
paid as lump sum amount when
leaving for home-town
Retailers/
Consumers
• Poor quality.
• Low shelf life
• Often sold at
mark-down
price
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Traditional Supply Chain
Village auction
Loading of loom
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Loader standing on loom
Loose transportation
Conventional ripening
Poor quality for customers
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Drawbacks – Traditional Supply Chain
Many intermediaries - adding costs but little value addition
No ownership of produce quality - No effort channelized towards reducing losses
Once harvested, farmer is at the mercy of traders
More than 30% of produce in the value chain becomes unsalable
Waste handled in city – unhygienic environment and additional cost
Financial value loss passed onto grower , quality value loss passed onto consumer
Poor shelf life
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Reliance Value Chain
Growers
• Buying directly
from field
• Fixed farm gate
price
• Payment linked to
quality
• Secured payment
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Company
appointed
vendors
• Trained on post harvest
handling
• Simple infrastructure/
gadgets to follow
practices.
• Fixed logistics cost per Kg
• Payment on quality &
quantity received at
company
• Weekly indent
Company
owned
ripening
facilities
• Scientific ripening
under controlled
condition
• Quality check of green
fruit
• Control of dump,
shrink and transit loss
of each consignment.
• Dispatch quality check
Distributors
/ Retailers
Consumers
• Purchases at fixed price • Consistent
from company
quality with
• Price as per quality
better shelf life
• Daily supply as per
• Appreciation of
requirement ensures
quality offered fresh stock available for
willingness
customers.
to pay premium
• Training on fruit display &
handling
• Retailing losses reduced
with fruit at right stage of
ripeness
• Mark-downs minimized
due to better shelf life
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Reliance Value Chain
Transportation in crates
De-handing
Store display
Ripening chamber
Display at pushcart
Washing
Raw banana
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Labled banana
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Reliance Value Chain – salient features
Paradigm shift from trading driven operation to a value addition based supply chain
Draws on strength of existing players but transforms role towards improving quality
Purchase price fixed before harvesting – de-risking farmer from market uncertainty
Secured payment to farmer as per commitment
Right maturity stage harvesting – improves quality of fruit and productivity
Price benchmarked with quality – motivates farmer to adopt practices for improving quality
Tie ups for better planting materials to improve yield
Developing existing channel partners for marketing produce
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Major impact areas
Improvement in farmers income
Farmer access to new markets
Reduction in losses
Creation of rural employment
Improved quality to consumer
Environment friendly
Benefits of the model enticed unorganized sector to adopt best practices
Inclusive Innovative Agri model suited to the local context
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Key milestones
Sourcing from 40 banana growing clusters across the country
Linkages with more than 2000 growers
Developed 150 plus vendors for procurement
Marketing in 16 major cities to internal as well as external customers.
100 plus distributors & organized retailers
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Thank You!
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