Transcript Slide 1

Welcome to the Experience Sharing Session on
Delisting F&Vs from APMCs: Uttarakhand
Perspective
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Ashutosh Singh MBA, Ph.D.
College of Agribusiness Management
GBPUA&T, Pantnagar-263415 India
email: [email protected]
INDIA …….. A LAND OF OPPORTUNITIES
52% cultivable land as against 11% world wide
• Unsurpassed Natural Advantages
• All the 15 major climates of the world
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46 out of the 60 soil types
• 17% animal, 12% plant and 10% fish genetic resource of the world
• Second largest producer of fruits and vegetables
• Aims to double its horticulture production to 350 million tonnes by 2015
• Horticulture contributes nearly 28 per cent of GDP and 54 per cent of
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export share in Agriculture from the cultivated area share of 8.5% only
Tremendous scope of increasing production and exports in Horticulture
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The marketing of F&V in India is changing drastically
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Change from the traditional markets to modern formats
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Entry of Reliance Fresh, Choupal Fresh, Namdhari’s Fresh, Premium
Farm Fresh etc.
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GROUND REALITY- A CONTRAST
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The largest grower of fruits – 15% of world output
Low share of global Exports at 0.5%
The second largest grower of vegetables – 11 % of world output
Low share of global exports at 1.7%
High Cost of Production fruits, vegetables & flowers
Low farmer income
Cold storage facility available for only 10% of produce
Farmer sells immediately due to perishability & absence of proper
infrastructure to keep it for longer period
Post Harvest wastage of fruits & vegetables – 18 to 30% valued at over Rs
45,000 crores
Losses as above in India is more than consumption of same in UK
Farm gate price 25% of domestic consumer retail price against 50% in
developed countries.
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WHAT A FARMER THINKS ?
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Agrees that a lot is being done for ‘Reviving Agriculture’
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But of what use if he can not be facilitated to sell his produce?
Wish to have ………
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A Remunerative Price for his blood and sweat
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Decide over his Buyers
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At a Place and Time Convenient to him
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Escape the fleecing of multiple intermediaries
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AGRICULTURAL MARKETS IN INDIA
 No. of Regulated Markets – 7246
 No. of Principal Market Yards- 2433
 No. of Sub Market Yards
- 4813
 No. of Rural Primary Markets - 21238
 No. of Wholesale Markets - 6,539
Availability of Markets
Area Served
 Average area Served by a Market
115 sq. km
 Av. Area Served by a Regulated
Market
454 sq. km
 Area served per Regulated Market
Varies from 103 sq km in
Punjab to 11,215 sq km in
Meghalaya
 Recommendations by National
Farmers Commission - Availability of
Markets within 5 km radius
Average approx. 80 Km
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As on 31.3.2011 CSO, Govt. of India
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STATE WISE PROGRESS OF AMENDMENTS
IN APMC ACT
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UTTARAKHAND: SNAP SHOTS
Statistics
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Geographical Area- 53484 Sq. Km.
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Population- 1.01 Crore
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Decadal Growth Rate – 19.17 %
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Density of Population- 189/Sq. Km.
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Urban to Total Population- 30.49 %
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Sex Ratio (Females/ 1000 Males)- 963 against 940
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Literacy Rate- 79.60 against 74% NA
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Per Capita Income-Rs. 90843 (FY 2012-13) against Rs. 74920 NA
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4.6 million ha (86%) is hilly area and 0.74 million ha (14%) is
plain area.
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Only about 14 percent of the geographical area is cultivable
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Agriculture contributes 23.4% in State Domestic Product
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The average size of land holding in the state is 0.95 ha against
NA of 1.57 ha.
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APMC SET UP IN UTTARAKHAND
25 PMYs, 31 SMYs, 27 WMs
Revenue generated 61.31 Cr in
11-12 and 90.32 Cr. in 12-13
3 WSM under Mini Mission-III
at Dehradun, Haldwani,
Haridwar
Established Uttarakhand
Horticulture Marketing Board
FCI has 02 Lakh MT storage
capacity in the state with
utilization level of 82%
Total 15 cold storages (1 in Cooperative, 2 in Public and 12 in
Private sector)
One CA storage of 1000 MT for
Apples in Naugaon, Uttarkashi
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APMC JOURNEY SO FAR….
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To ensure selling of agricultural produce only in the government
regulated markets
APMC Act has helped mainly the medium and small farmers to
access orderly market places
Farmers have to transport their produce over long distances
Most of these markets have limited facilities — only 9 per cent
offer cold storage, and only 33 percent have grading facilities.
Private Sector is willing to invest in agriculture sector but
regulations such as the APMC Act pose a major hurdle
As a consequence, private investment in agriculture and allied
sectors has remained negligible
Many of the APMCs don’t have adequate infrastructure to
support efficient trading
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HAS THE APMC BEEN
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ABLE TO SERVE THE PURPOSE
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Limited interest have been served of small farmers
In many states, the regulated markets are non-functional.
Out of 35 states and UTs only 17 has amended it by November
2012.
The catchment area of regulated markets also varies drastically
ranging between the plain, hilly and NE states
Impose substantial taxes on buyers over and above the
commissions and fees
Only registered traders/commission agents can transact in the
markets
Without amending APMC Act, the entry of private players is
restricted, No Contract farming, No Farmer-Consumer Market
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FOCAL POINTS FOR TODAY…
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Will it enable farmers to sell directly to consumers/buyers and
avoid traders/commission agents?
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Does the farmer sell at the APMC market even today?
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Will the buyers get F&V at a cheaper price?
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Revenue generated by Mandi Board?
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Is there any threat from corporate buyers to procure directly
from the farmers?
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How will they reach farmers immediately?
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What happened in Bihar and Andhra Pradesh ?
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F&V SUPPLY CHAIN CONSTRAINTS
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Predominantly marginal or small farmers – Hence small marketable
surpluses and limited bargaining power
Poor availability of markets & monopolistic tendencies of APMCs
Inadequate infrastructure in wholesale markets/ rural primary
markets
Lack of fair price discovery mechanism
Multiple and exploitative intermediaries – low returns
Fragmented supply chain, poor cold chain & high post-harvest losses
Lack of cleaning, grading, standardization, packaging & quality
certification facilities
Limited access to market information and marketing opportunities
available
Leading into:
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Low Exportable Produce
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Farmers getting very less share in consumers’ rupee
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Pictures speak better than
words……………
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TRANSPORTATION
OF FRUITS AND VEGETABLES
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F&V SUPPLY CHAIN: INDIA V/S DEVELOPED
India
Consolidator
Farmer
Commission
agent
Trader
Wholesaler
COUNTRIES
Retailer
Consumer
High wastage and low
margins
Consumer
Developed countries
Farmer
Wholesaler/Retailers
High investments –
Low wastage - better
margins
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F&V PRODUCTION SCENARIO IN UTTARAKHAND
Fruits
Vegetable
Year
Area (000’ha)
Production
(000’MT)
Productivity
(MT/ha)
Area (000’ha)
Production
(000’MT)
Productivity
(MT/ha)
2008-09
171.71
725.27
4.22
81.82
1077.55
13.16
2009-10
193.80
723.60
3.73
82.60
997.20
12.07
2010-11
197.62
752.56
3.80
86.87
1023.45
11.78
2011-12
200.73
802.12
4.00
89.29
1066.71
12.00
2012-13
200.85
805.67
4.01
88.03
1059.57
12.03
Source: NHB, 2012
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FRUIT PRODUCTION SCENARIO IN UTTARAKHAND
(000'MT)
Fruits
2009-10
2010-11
% growth over
20011-12
previous year
% growth over
previous year
Mango
120.8
135.3
12.00
147.79
9.23
Citrus
126.6
134.5
6.2
138.45
2.93
Apple
114.0
135.9
19.21
122.65
-9.74
Pear
102.78
105.45
2.59
108.10
2.51
Peach
47.34
48.56
2.57
49.68
2.30
Plum
40.01
40.56
1.37
41.22
1.62
Khumani
30.67
31.34
2.18
32.26
2.93
Wallnut
20.56
21.19
3.06
21.82
2.97
Litchi
15.7
18.7
19.10
19.01
1.65
Source: Directorate of Horticulture, Uttarakhand 2012-13
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VEGETABLE PRODUCTION
UTTARAKHAND (000'MT)
2009-10
2010-11
Vegetable
SCENARIO IN
Growth over
2011-12
Growth over
previous year
previous year
(%)
(%)
Tomato
95.60
97.1
1.56
102.39
5.44
Pea
71.0
86.9
22.39
78.05
-10.18
Cabbage
68.1
70.5
3.52
72.70
3.12
Reddish
55.34
56.45
2.00
57.96
2.51
Frenchbean
38.45
39.54
2.83
40.05
2.56
Onion
40.50
38.0
-6.17
39.27
3.34
Cauliflower
34.6
34.0
-1.73
36.67
7.85
Okra
24.6
27.1
10.16
27.90
2.95
Brinjal
24.6
25.9
5.28
27.04
4.40
Source: Directorate of Horticulture, Uttarakhand 2012-13
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POST HARVEST LOSSES IN FRUITS AND VEGETABLES
Activity
Losses (in kg.) per quintal
Malta
S and M
Tomato
Large
Pea
S and M
Large
S and M
Large
Physical losses at the level of farmers
Harvesting
2.23
1.12
5.12
3.23
3.46
2.87
Sorting and
Grading
Packaging
0.14
0.06
0.21
0.19
0.19
0.11
0.24
0.12
0.84
0.78
0.35
0.24
Loading
0.19
0.08
0.59
0.56
0.45
0.43
Transportation
12.78
7.78
19.58
15.87
9.78
6.43
Unloading
0.98
0.78
1.28
1.87
1.09
0.89
Weighing and
losses at
wholesale level
Total loss
0.67
0.09
1.34
0.98
0.91
0.78
17.23
10.12
28.96
23.48
16.23
11.75
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Experiences in the Other States ……
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PUNE EXPERIENCE
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National Initiative for Vegetables in Urban Clusters
Maharashtra State Agricultural Marketing Board
(MSAMB) was to help the farmers’ groups market their
products directly in Pune, Mumbai and Nagpur.
MSAMB’s role was to help groups identify potential
markets and provide subsidies in setting up kiosks,
refrigerated vans and logistic support
68 farmers’ groups are directly selling their products at 226
locations in Pune and Pimpri-Chinchwad
Lack of proper marketing and awareness is making it
difficult
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APNI MANDIS
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After studying the concept of “Saturday Market”
prevalent in U.K and U.S.A, the Punjab Mandi Board
decided to organize “Apni Mandis” 1987 at S.A.S Nagar,
Mohali (Punjab)
The number of farmers participated - 10,278 (1988) which
has been increased to 4,14,610 (2012).
Sale of produce - Rs. 2,96,24,761/- (1988) which has been
increased to Rs. 82,13,49,474/- (2012)
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RYTHU BAZAAR
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Rythu bazaar is run by Government of Andhra
Pradesh for small farmers with small landholdings.
No market fees is collected from the Farmers of
Bazars.
Rythu
All facilities are provided to Farmers with free of cost
Rents are being collected from Self-Help Groups & Govt.
Agencies only
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SAMRIDDHII: MBA SABZIWALLAS STRIKE GREEN GOLD
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Samriddhii (Jan,2008) is capable of creating livelihood
opportunities to ensure economic empowerment of hitherto
marginal farmers.
Touched the lives of more than 7,000 farmer families and 500
vendors.
Samriddhii Rs. 7,50,000 (2008-09) - Rs. 2.60 crore (2011-12)
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INTERVENTIONS: AC CARTS
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Keeps vegetables fresh for longer period
Maintain the temperature of 5 to 15 degree Celsius
depending on the surrounding temperature
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Light weight ( only 70 Kg)
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Carry more weights ( can carry upto 200 kg vegetables)
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Better display of vegetables ( 10 different compartment)
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Easy to pull & push
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Space for advertisement – helps vendors in earning more
income per month
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CASE OF APPLE GROWERS OF HIMACHAL PRADESH
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To assess the awareness and perception level of
apple growers towards amended APMC Act
To analyze the impact of amended APMC Act on
production practices, post harvest management
practices and marketing practices of producers
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To evaluate the efficiency of traditional and
modern supply chain.
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ANALYSIS OF MARKETING CHANNELS
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MARKETING COST AND NET RETURN UNDER
DIFFERENT MARKETING CHANNELS IN GROUP 1
N=58
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MARKETING COST AND NET RETURN UNDER DIFFERENT
MARKETING CHANNELS IN GROUP 2
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GROWER’S SHARE IN CONSUMER’S RUPEE AND PRICE SPREAD
TRADITIONAL
CHANNEL
CORPORATE CHANNEL
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UTTARAKHAND’S INITIATIVE
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Opening 50 Apnu Bazar
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One is operating at Nanurkhera
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Three more are planned at Danda Lakore, Maziri Grant and
Garuda
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Shed, Godown and Electronic Weighing
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No other retail outlet within the 100 meters
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No Marketing Fee as against 2% Marketing fee and .5%
Development cess charged in APMCs
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Delisting of 93 agriculture produces (fruits and vegetables)
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Mandis at least in seven places in hilly areas
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Loss of Rs 8-9 crores on the revenue generated
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APPLE SERVICE PROJECT
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OF UTTARKASHI
Pilot basis in April 2007 in Syuri-Nogoan and Dhari-Kafnol village of Uttarkashi
Consortium partners Fresh Food Technology (FFT), Agriculture & Organic Farming
Group (AOFG) and Shri Jagdamba Samiti (SJS) under the financial assistance of SHGW
(A Private Dutch foundation)
Initially 880 apple growers were covered under social business model
Eliminate well organized intermediaries who controlled the entire process from credit
supply for farm inputs, transportation to the marketing of the produce
Engaged small and marginal farmers in the apple value addition business chain
Four collection centers and five grading centres (2 in Naugaon, 1 in Purola, 1 in
Chakrata)
Farmer organizations become equal business partners with the private sector parties
and a social investor
Resulted in creating more employment, income, technical skill and local capacity for the
apple growing farmers
Apple from Harsil, Taknor, Tyuni, Parola and Naugaon is now being sold in cities like
Delhi, Varanasi, Kanpur and Lucknow
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BUSINESS PREPOSITION
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During the apple season of 2011-12 880 participating farmers got prices of
Rs 40 to Rs 55 per kg from the collection point companies. A total of 430
MT of apples were procured and these apples were sold to the storage
company at the rate of Rs 55 to Rs 65 per kg. FFT Himalayan Fresh Fruit
sold these apples between February and April 2012 in the markets of
Varanasi, Delhi, Dehradun and Jaipur at the rate of Rs 75 to Rs 85 per
kg. A net profit of Rs 7 lakh (Rs 1.80 per kg) was earned in this regard by
the company. The collection centres also earned a net profit of Rs 5 lakh
(Rs 1 per kg)
Out of Rs 1, the collection point joint venture distributed a premium of Rs
0.25 per kg in cash on August 15, 2012, with a shareholding of Rs 0.25 per
kg. The remaining Rs 0.50 went to the collection point company for
capitalization
Out of the total profit of Rs 7 lakh earned by the FFT Himalayan, a
premium of Rs 0.50 per kg was given to the farmers. Besides, a
shareholding of Rs 1 per kg was given to the 880 participating farmers.
The farmers got Rs 2 per kg as added price as additional payment for
their apples, besides other benefits like immediate cash payments,
training support, saving of time and risk in selling apples to the
middlemen
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REACTIONS ON THE MOVE ………..
“APMC is needed for all classes of farmers. While arhatiyas provide finance and assurance of a
fair price for agriculture produce, they also provide funds to farmers in dire need. Small
farmers cannot afford to hire a vehicle and bring their produce for direct selling; arhatiyas
bring these to APMC.”
Sanjay Bhujbal, Arhatiya for vegetables at the Vashi APMC in Navi Mumbai
“An APMC yard is an important place for small vendors to sell their produce. However, the
Act must allow free flow of goods across the country. The farmer must have the right to decide
the buyer of his produce. The APMC yard must be made modern, with excellent handing
facility, ripening and cold chambers”
K Radhakrishnan, Director, Freskins Retail Chain
“Waiving of market fee and cess will put an additional burden of Rs 7.25 crore on the
state exchequer. We expect the prices of vegetables and fruit to fall by 10 per cent. The
government is yet to implement the Act in its spirit, which seeks to promote contract
farming, bring reforms in agriculture, provides for better regulation of marketing
agricultural produce and establish a more efficient marketing system.”
Harak Singh Rawat, Agriculture Minister , Govt of Uttarakhand
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DIGITAL SCREEN AT MANDI GATE
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WHOLESALERS ARE UPLOADING FRUITS AND
VEGETABLES AT MANDI
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TRADER’S PLATFORM
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EXPECTED IMPACT OF DELISTING OF F&V
Access of Farmers to Consumers
Facility for Loans and Advances
Time Consumed in Transaction
FARMERS
Grading and Sorting
Packaging Cost
Transportation Cost
Price Awareness before Sale
Fair Price Realization
Rejection Rate
Fluctuating Demand due to Seasonality
INTERMEDIARIES
Squeezed Commission
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Loss
Loss of
of Revenue
Revenue
Role in Private Yards
MARKETING BOARD
Lack of Consistent Supply
Lack of Post Harvest Handling Infrastructure
Availability of Quality Raw Material
PRIVATE PLAYERS
Consistent Supply
Just in Time
Logistic Issues
Economy in Procurement
Private Cartels
CONSUMERS
Availability of E&V at Cheaper Price
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Point of Purchase
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ROAD MAP FOR FUTURE ….
Challenges
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Ensuring Direct Contact between Farmer
and Consumer
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Limiting the role of Intermediaries
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Avoiding Distress sale
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Continuous Supply to Processors
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Market Intelligence
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Contract Farming
Strategies
 Developing linkages with farmers
 Restricting Marketing Cartels
 Linking small farmers to the modern
food retail chains
 Promoting multi mutually independent
players
 Farmer’s training in pre and post
harvest management practices
 Economical packaging technology for
F&V
 Integrated cold chain & logistics
infrastructure
 MIS Support at Village Panchayat level
 Enabling regulations
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THANKS!
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