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.
Access Livelihoods India Conference
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
2
Access Livelihoods India Conference
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
3
Access Livelihoods India Conference
Traditional Supply Chain
Growers
• Harvested in
looms
• Transported
loose
• Maturity stage
based on
distance
travelled
4
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
Access Livelihoods India Conference
Traditional Supply Chain
Village auction
Loading of loom
5
Loader standing on loom
Loose transportation
Conventional ripening
Poor quality for customers
Access Livelihoods India Conference
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
6
Access Livelihoods India Conference
Reliance Value Chain
Growers
• Buying directly
from field
• Fixed farm gate
price
• Payment linked to
quality
• Secured payment
7
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
Access Livelihoods India Conference
Reliance Value Chain
Transportation in crates
De-handing
Store display
Ripening chamber
Display at pushcart
Washing
Raw banana
8
Labled banana
Access Livelihoods India Conference
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
9
Access Livelihoods India Conference
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
10
Access Livelihoods India Conference
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
11
Access Livelihoods India Conference
Thank You!
12
Access Livelihoods India Conference