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SUPPLY CHAIN MANAGEMENT IN VEGETABLE MARKETING : A COMPARATIVE ANALYSIS

Thesis submitted to the University of Agricultural Sciences, Dharwad in partial fulfillment of the requirement for the Degree of

Master of Business Administration in Agribusiness

By SHILPA, K.

DEPARTMENT OF AGRIBUSINESS MANAGEMENT COLLEGE OF AGRICULTURE, DHARWAD UNIVERSITY OF AGRICULTURAL SCIENCES, DHARWAD-580 005 JULY, 2008

ADVISORY COMMITTEE

DHARWAD July, 2008

(BASAVARAJ BANAKAR) MAJOR ADVISOR

Approved by:
Chairman: __________________________ (BASAVARAJ BANAKAR)

Members:

1. _______________________ (H.S. VIJAYAKUMAR)

2. _______________________ (L.B. KUNNAL) 3. _______________________ (A.R.S. BHAT)

CONTENTS
Sl. No. CERTIFICATE ACKNOWLEDGEMENT LIST OF TABLES LIST OF APPENDICES 1 2 INTRODUCTION REVIEW OF LITERATURE 2.1 2.2 2.3 2.4 3 Roles played by intermediaries and firms in the supply chain Marketing Efficiency Factors influencing the effectiveness of supply chain Problems faced by the farmers, firms and consumers Chapter Particulars Page No.

METHODOLOGY 3.1 3.2 3.3 3.4 3.5 Description of the study area Nature and source of data Sampling procedure Analytical tools and techniques employed Terms and concepts used in the study

RESULTS 4.1 Comparative roles played by the intermediaries as the traditional format as well as contracting firms in the different formats of the supply chain. 4.2 4.3 Marketing efficiency of different formats in the supply chain Factors influencing the effectiveness of the supply chain

4.4 Comparison of price received by the farmers vis--vis price paid by the consumers. 4.5 Problems and expectations of farmers retail formats and consumers in the supply chain. 5 DISCUSSION 5.1 Comparative role played by the intermediaries in the traditional format as well as contracting firms in the different formats of the supply chain. 5.2 5.3 Marketing efficiency of different formats in the supply chain Factors influencing the effectiveness of the supply chain.

5.4 Comparison of price received by the farmers vis--vis price paid by the consumers. 5.5 Problems and expectations of farmers, retail formats and consumers in the supply chain. 6 7 SUMMARY AND POLICY IMPLICATIONS REFERENCES APPENDICES s

LIST OF TABLES
Table No. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 Title Functions performed by the intermediaries in Traditional as well as the Contracting firms in the different formats of the Supply Chain of Vegetable marketing Material used for packing during the sales by the farmers in the different formats in the Supply chain in Vegetable Marketing Physical losses at the Wholesaler level in the Traditional supply chain Physical losses at the retail format level in the Traditional supply chain Physical losses at the retail format level in the Cooperative supply chain Physical losses at the retail format level in the Modern supply chain Physical loss at different levels in the supply chain of different formats Cost of Marketing Vegetables by farmers per day per farmer in Traditional supply chain Cost of Marketing Vegetables by farmers per day per farmer in Cooperative supply chain Cost of Marketing Vegetables by farmers per day per farmer in Modern supply chain Aggregate average cost of marketing Vegetables by farmers per day per farmer under different supply chain Cost and returns in Vegetable marketing by Commission agent in Traditional Supply chain Cost and returns in Vegetable marketing by Wholesaler in Traditional Supply chain Cost and returns in Vegetable marketing by retail format in Traditional supply chain Cost and returns in Vegetable marketing by retail format in Cooperative supply chain Cost and returns in Vegetable marketing by retail format in Modern supply chain Aggregate average cost and returns in Vegetable marketing under different formats in supply chain Marketing costs, Marketing margins and Producers share in Consumers rupee under different formats in the supply chain Disposal pattern of produce by the farmers in supply chain Reasons for sale of the produce by farmers to particular formats in the supply chain Pattern of purchases per day by different retail formats Buying Management by firms in different formats Pattern of sale of vegetables by different retail formats per day Pattern of buying by consumers in the different formats in each purchase in the Supply chain Reasons for buying vegetables from the particular formats by the consumers in the Supply chain Price received by the farmer vis-a- vis price paid by the consumer in the supply chain Problems faced by the farmers in selling the produce to different formats in the Supply chain Problems faced by different retail formats in their vegetable marketing in the Supply chain Problems faced by the consumers in buying the vegetables from different Retail formats in the supply chain Page No.

LIST OF FIGURES
Figure No 1. Title Area map of the Bangalore city

LIST OF APPENDICES
Appendix No. 1 Questionnaire for farmers

Title

Page No.

Questionnaire for intermediaries

3.

Questionnaire for traditional retail outlet

4.

Questionanaire for cooperative retail outlet

5.

Questionnaire for modern retail outlet

6.

Questionnaire for consumers

1. INTRODUCTION
In todays highly competitive global market place, the pressure on organizations to find new ways to create and deliver value grows even stronger. Gradually, in emerging economies as well as mature markets, the power of the buyer has overtaken that of the customer. The rules are different in a buyers market. In particular customer service becomes a key differentiator as the sophistication and the demands of customers continually increase. At the same time, market maturity combined with new sources of global competition has led to over capacity in many industries leading to an inevitable pressure in prices. Prices have always been a critical competitive variable in many markets and the signs are that, it becomes an issue to think upon as commoditization of markets continues. In this context, logistics and supply chain management have become the crucial areas of management and national focus. Though India spends over 12 per cent of its GDP on logistic and supply chain management, customer value provided is unsatisfactory. This area becomes even more important in the sector of agribusiness because most of the agricultural products are perishable and have a very short shelf life. Supply Chain Management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory and finished goods from point-of-origin to point-of-consumption. The term supply chain management was coined by a consultant Keith Oliver, of strategy consulting firm Booz Allen Hamilton in 1982. Supply Chain Management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. Supply chain management plays an integral role in keeping business costs at a minimum and profitability as high as possible. There are many factors involved in Supply chain management. Flow is the foremost element, the foundation for all aspects of the process. There are three main types of flow, such as the product flow, the information flow, the finances flow. The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules etc., to ensure prompt, efficient and accurate monetary transactions within these categories, various other elements falls, which includes the sourcing of raw material, coordinating, manufacturing and assembly of products, maintaining accurate warehousing and inventory accounts, researching supply and demand, and much more. The challenge for us in Supply chain management is to maintain all three flows and all three unique in an efficient manner, resulting in optimal results for the company. Components of supply chain management: Production: focuses on which suppliers to use, how much to produce, when to produce, where to produce (in source vs outsource, quantities, time, location) Inventory: decides where to store their produce and how much to store (make to order vs make to stock, consolidated vs break bulk, location). Distribution /Logistics: addresses issues about how the products should be moved and stored (Logistics methods own fleet vs 3PL). Payments: Looks for the best ways to pay suppliers and get paid to customers (Pricing policies, promotion and discounts). The concept of Agriculture supply chain refers to the activities of procurement, order fulfillment, product design and development, distribution, delivery and customer service executed by two or more separate organizations in the agribusiness industry, to fulfill customer orders. Agriculture supply chain consists of small and medium enterprises, such as farmers and raw material producers, suppliers of agricultural inputs, processors of agricultural

outputs, farmers co-operatives, brokers, suppliers, distributors, wholesalers and retailers, that either tend to operate independently or in co-operation, mainly in the last stages of supply chain. An efficient supply chain can contribute to an increase in the marketable surplus by lowering down the inefficiencies in production, processing, storage and transportation. It ensures better prices to the farmers inducing them to invest more in the vital inputs so that productivity leaps frog. It widens market opportunities for products and thus helps in maintaining an ever increasing demand for the same. An organized retailing acts as a stimulator to promote growth of agro based industries, helping the farmers in production planning in advance, based on demand forecast. Economic efficiency in a system can be examined as: 1. Technical efficiency 2. Allocative efficiency In marketing the produce, the technical efficiency is said to have increased when operational cost is reduced for performing a function for each unit of output. This can be achieved by reducing physical losses and improvement in the technology to carry out particular function viz. storage, transportation, handling and processing. A change in the technique can result in the reduction of per unit cost. Allocative efficiency of farm products either over time or across the space among the traders, processors and consumers protects the economic interests of the producers and consumer. Alternative methods employed in agriculture: Some of the alternative methods employed in agriculture in achieving the efficiencies in the system are 1) Contract farming 2) Direct, uncontracted purchases from farmers

3) Purchases from wholesalers, who either work directly with farmers or through wholesale market 4) Purchases through government sponsored centres 5) Purchases through informal groups, farmers associations or co-operatives 6) Multiple channel India is likely to become the food basket of the world considering 52 per cent of total land under cultivation as compared to global average of 11 per cent. Having the labor cost advantage; organized research is growing very speedily owing to these developments, farmers could get latest market prices and various products, weather reports and best farming practices. As such, horticultural crops occupy around 13 per cent of Indias gross cropped area, having the production of 177.41 million metric tones during 2005-06. One of the most fundamental issues, which actually requires research, is the method by which we can minimize the post harvest losses, which is quite substantial at present. This needs the designing of efficient and cost effective and also environment friendly storage systems. There is also a requirement for value addition to agricultural produce in order to maximize their returns. Hence, there is an importance of supply chain in improving marketing activities of retail business in agricultural areas in Indian economy. The middlemen and poor supply chain facilities have resulted in the hike of agricultural prices up to 60 per cent without actually adding any value. India is the second largest producer of fruits and vegetables with the production of 134.5 MT, but due to inadequate cold storage and preservation facilities and improper supply chain infrastructure, there is enormous wastages. About 30per cent of the fruits and vegetables grown in India gets wasted annually resulting in instability of prices, farmers not getting remunerative prices, rural impoverishment culminating in farmers' frustrations and suicides. Enough attention has been paid at the pre-harvest stages for bolstering the levels of production by innovative techniques like crop rotation, soil conservation, pest control, fertilizers, irrigation, etc., but, post harvest issues have not been addressed adequately. Despite having achieved national food security, the lives over 200

million Indian farmers and farm workers and their well-being who have been the backbone of Indian agriculture continues to be a matter of grave concern. Agriculture and its allied industries sector employs 67 per cent of the country's population. By practicing improved supply chain management practices, there will be significant reduction in the wastages of fruits and vegetables which in turn will benefit both the farmers as well as the consumers by means of increased returns and decrease in prices respectively. Important advantages of supply chain management are: 1. Reduction product losses in transportation and storage 2. Increasing of sales 3. Dissemination of technology, advanced techniques, capital and knowledge among chain partners 4. Better information about the flow of products, markets and technologies 5. Tracking and tracing to the source 6. Better control of product safety and quality 7. Large investments and risks are shared among partners in the chain 8. Increasing efficiencies and increasing the volume of trade 9. Customer satisfaction Hence, supply chain management is defined as the design and operation of physical, management information and financial systems needed to transfer goods and services from point of production to point of consumption in an efficient and effective manner. The entire supply chain management process is a value chain where bottlenecks, value adding factors and liability factors are identified and addressed, thus enabling the retail organization to have an efficient supply chain. The supply is the part of retail operations that ensures that the right product is in the right place, at the right time and at the right cost. India is endowed with abundance of skilled labour and very favourable agro climatic conditions for the cultivation of a wide variety of fruits and vegetables and has the distinction of being the second largest fruits and vegetable producer in the world with significant increase in the production which has been made possible with the support of government and use of technology to increase the farm output. But on the other side there is a colossal waste during the post harvest storage and handling due to improper bagging without crating, lack of temperature controlled vehicles, no cold chain facilities for preserving the produce, coupled with significant processing of the agricultural produce resulting in enormous losses to the nation. Given the characteristics of fruits and vegetables such as perishability, seasonality, bulkiness and delicate nature of the products coupled with inadequate storage and transport facilities the supply chain can make efficient by reducing the length of the chain improving cold chain facilities. Procurement cost must decrease, introduction of uniform tax rates, modernization of farm production technologies and usage of IT in Agri-business needs to be enhanced. There are several players involved in fulfilling the needs of the consumer in the supply chain management of vegetables like farmers, traders, transporters, processors, retailers etc linked with material, information and financial flows. The supply chain management in vegetables has to be improved in all the stages of the supply by adopting global best practices in storage, packaging, handling, transportation, value added service etc. And also by disintermediation and participation of organized players i.e., modern supply chain with a view to benefit both farmers as well as ultimate consumers. Scope of supply chain An organized retailing penetration/ modern supply chain is very low in India as to other developing countries. All of them are based out of major urban centres in India. The penetration of these retailing experiences is very low in smaller cities and towns. It is only recently that they are opening up in other Tier A cities, excluding the leading metros. The reason for success of modern supply chain in India is two fold as illustrated below.

Benefits to customer i) ii) Option of bulk purchases at discount rates Due to effective supply chain management at these retail stores, the operating and distribution costs are kept low, reflecting in lower product prices for customers. Continuous stock availability Good quality control Good overall ambience and positive shopping experience in terms of ease of shopping.

iii) iv) v)

Benefits to producers i) ii) iii) iv) Opportunity to show case brands to a wide target audience A single point distribution network suffices, through which the products get distributed to all areas of the city. Reduction in distribution costs translates to higher opportunity spend on promotion and advertising Helps them to easily understand market trends and hence forecast sales

Since modern chain provides the right kind of benefits to the customers and producers/manufacturers, it has been widely accepted. But most of the growth has happened through the major urban centres. As and when these centres get saturated, the existing players will move into smaller cities and towns. Though the amount of investment in smaller towns is substantially less today, it is projected to grow at a much faster pace in near future. What the current retail players have done is build upon a strong pile of cash reserves from their operation in the urban centres and hence is now in a position to expand into others areas and formats of retailing. Also since there are comparatively fewer big retail players as compared to some of the western countries, they have not yet been involved in cut throat competition amongst each other. Besides the market is far from being completely tapped by these players and hence there is a immense scope for entry of newer players with very low entry barriers. Considering that traditional supply chain is fragmented, there is a presence of large number of intermediaries, and existing market yards are dominated by the association of a few traders, the growth of organized retail provides several advantages. It brings in new technical know how in marketing and reduces inefficiency in supply chain. It improves quality of services to the consumers and creates employment for youth. It also helps in achieving international quality standards and thus boost exports leading to increase in farmers income. The organized sector is using contract farming model for meeting its requirements for retailing, processing or export purposes. Despite several advantages of contract farming, the coverage continues to be limited. Contract farming has been traditionally a common practice for paper industry, match stick manufacturers, and now in seed production and to few extent in vegetable marketing.. Contract farming lowers transaction cost for the company and reduces market risks for the farmers. In Bangalore the modern food retail chains are self service stores having a wider range of products and also own brands for groceries and home products. Fresh fruits and vegetables, bakery products, dairy products as well as frozen meat have different sections devoted for them. A typical food retail chain has about 6,000 stock keeping units. In 1971 Nilgiris Super market got established paving way for the starting up of the food retail chains in Bangalore. There was no much growth of food retail chains for the next two decades as there were no new players in this field. But there has been a rapid expansion of organized food retail chains, with the entry of Food World in 1996 and also many new players like Fab Mall, Subiksha, Trinethra, Namdhari Fresh, reliance Fresh, etc. entering the market and opening up their outlets in the city. The spiraling in the super market chains can also be attributed to many national and international players showing interest for starting their retail outlets in Bangalore.

India is land of agriculture diversity. With 2/3 of population still dependent on agriculture and contributing about 20 per cent to Indian GDP, the condition of Indian farmers is still miserable. The main reason for this can be accounted due to poor price realization by the farmers in consumer rupee. This ranges from 35-65 paise per rupee. This low realization can be attributed to large number of intermediaries present in the chain between producers farmer and ultimate consumer, hence to counter this problem what is needed is a development of a proper supply chain so that farmers, intermediary and consumer get their objectives fulfilled, that is farmer get proper price realization in consumer rupee, intermediaries get their required margins and consumer get good service and product at affordable price. Keeping the above aspects in consideration the study was carried out with the following objectives Specific objectives of investigation 1) To study the comparative roles played by the intermediaries in the traditional and modern supply chains in vegetable marketing. 2) To compare the marketing efficiency between traditional and modern supply chain 3) To compare the factors influencing the effectiveness of supply chain in the modern formats as compared to traditional formats. 4) To compare the price received by farmers vis-a-vis price paid by the consumers in the traditional and modern supply chain 5) To identify the problems and expectations of producers in transacting under traditional and modern supply chain. Presentation of the study The study has been presented in six chapters as indicated below. chapter-I deals with the nature, importance and specific objectives of the study; Chapter-II describes the comprehensive review of the relevant research work done in the past related to the present study; Chapter-III outlines the features of the study area, nature and source of data, sampling procedure and analytical tools and techniques employed in the study; Chapter-IV is devoted to present the main findings of the study through tables; Chapter-V discusses the results of the study; Chapter-VI provides the summary of the of the whole study and also suggests the policy implication based on findings of the study. At the end, important references have been listed relating to the present study. Limitation of the study Since, the data collected by survey method, the inherent lacunae associated with this type of inquiry have crept into the study. Mainly the study is limited to Bangalore city only. Even though, the estimates were provided by recall memory on account of the nonmaintenance of the records with regard to quantity sold by farmer, quantity procured by intermediaries, quantity purchased by the consumers. Quantity unsold by the intermediaries. Similarly at retail formats the quantity sold at lower prices at the end of the day hence price variation with in a day was a major limitation. But, sincere efforts have been made to elicit accurate and reliable information as far as possible by cross questioning. However, the degree of discrepancy if any would be negligible as the estimates presented are in averages and aggregate averages.

2. REVIEW OF LITERATURE
The review of past studies helps us in framing objectives, developing research design, variable selection, interpreting the results and in drawing meaningful conclusions. In accordance with the objectives of the study, a brief review of literature is presented here under the following headings. 2.1 2.2 2.3 2.4 Roles played by intermediaries and firms in the supply chain Marketing Efficiency Factors influencing the effectiveness of supply chain Problems faced by the farmers, firms and consumers

2.1

Roles played by intermediaries and firms in the supply chain

Singh and Sharma (1983) studied the management of milk procurement from three villages by cooperative, private and public sectors in Karnool district of Andhra Pradesh. They found that monthly variation in milk prices was almost constant in case of cooperatives, whereas in private sector it was high, during three months of the study period that is April to June. While the public sector prices varied quarterly. Andrew (1994) in his study building effective partnership in the meat supply chain which was conducted in U.K. Many of the features of the livestock partnerships reported in this study are specific to the UK, the degree of retailer dominance. However there are three important features of livestock partnership in the UK which we feel apply to most sectors of the food industry in most developed countries. a. The paradox of power as the power of food retailers increases along with their interest in own label products, so they become increasingly dependent on fewer and fewer larger suppliers who can deliver safe products of consistently high quality on a large scale at competitive prices and who have the potential (and desire) to innovate and add value to the commodity oriented categories. b. The learning supply chain competition between firms within firms within supply chains is being replaced by competition between supply chains themselves, as retailers seek to establish competitive advantage by creating closer links with their upstream trading partners. c. Those people operating at the start of the supply chain the producers of raw materials need to accept the fact that the financial benefits which come from partnerships will invariably be distributed in relation to distribution of value added. Successful partnership should deliver cost savings and higher value but it is essential that all members of the partnership are actively engaged in finding ways to achieve them.

Hence, in seeking to exploit the opportunities which partnerships provide, considerable care needs to be given to the treatment of costs and prices. Julie et al. (1994) in the study of supply chain management in cereal grains; a case study from the U.S. milling wheat industry, it focuses on supply chain management in the grain industry by investigating the effects of wheat quality on marketing arrangements between producers, grain handling companies and processors, wheat quality is defined by many different characteristics, broadly categorized into physical and intrinsic quality attributes. The complexity of wheat quality places limitations on the effectiveness of industry grading schemes in assuring end use quality. In the US wheat grading factors mostly reflect physical characteristics. Moreover, the US wheat industry does little to regulate the intrinsic quality of new cultivars. Consequently, there is functional quality uncertainty in the U.S. wheat market, encouraging some individual processors to segregate wheat based on their own quality specifications. The costs and benefits of wheat segregation are illustrated with a case study of wheat procurement taken from the U.S. flour industry. Pendleton flour mills Inc. operates a stringent testing program to segregate wheat supplies with specific intrinsic quality attributes from the U.S. wheat market. The paper concludes that the inadequacy of the US grading

system in guaranteeing functional quality provides some processors with an incentive to manage the supply chain for milling wheat. Raghuvir Vedhantham (1998) Conducted a study in order to trace the chain of intermediaries between the manufacture and the end consumer in the marketing story. In the study, describing the history of distribution is a story of shifting power structure. After 1960s, the power of manufacturers grew as thee size of their operations increased, primarily due to innovations in production processes. As production became a dominant factor in seeking competitive advantage manufacturer designed brands came to be offered more widely. This process went too far resulting in over supply, and the emphasis switched towards marketing. This evolutionary process also had effect on distribution function itself. It was identified that the number or types of distributors involved in a particular system will depend on various factors, including type of product and listed some of the distribution function like transport, Bulk breaking and storage, credit, local knowledge and feed back, display, advertising, delivery speed relationship between intermediary and buyer, Price Discount structures, manufacturer credibility, Documentation, Product training, value added by dealer and joint sales calls. Fearne (1999) in his study on Success factors in the fresh produce supply chain: insights from the UK, found that power of retailer increases along with their interest on own label products. So they become increasingly dependent on fewer larger suppliers who can deliver safe products on a large scale at a competitive price. He suggested that farmers and growers should directly link with other sector of the marketing chain in order to supply the right and consistent quantity and quality of different products. The producer of raw material need to accept the fact that the financial benefit, which comes from partnership will invariably distributed in relation to value added Ricks (1999) in his study revealed that the appropriate combination of vertical coordination arrangements like contracts, informal agreement and joint venture can improve supply chain performance by providing adequate supplies to the shippers from packers and growers, aiding standardization and packaging of fruit products and risk sharing between the shippers, packers and growers. Burma et al. (2000) in studying the development of a sustainable agri supply chain which requires commitment of the various stakeholders like growers, traders and supermarkets. An important condition or even prerequisite for commitment is mutual understanding and benefit. The aim of this study was to understand the interest and matching behaviour of the various stakeholders in the supply chain for vegetables in Thailand and to recommend appropriate strategies for chain development, taking the respective interests into account. The stakeholders considered in the vegetables supply chain are the general management of the super market organization, the management of the distribution centre, the buying of the super market organization, the vegetable suppliers, the vegetable growers and the input suppliers of the vegetable growers. The various stakeholders perceive weaknesses and threats in the misuse of pesticide, the delusion of good quality vegetables, the irregular supply of vegetables, the obscurity of cost of production and handling, the strong price fluctuations for vegetables and the strong competition in the market for inputs. These weaknesses and threats can be surmounted by certification growers association and production system innovation along with cost monitoring. Helen (2000) in his study on Buyer-Supplier relationships in the UK fresh produce industry found out that the relationship development in fresh produce retailing is dependent on product, service performance, levels of trust and commitment. The average life expectancy of relation measured was 8 years and one third of relationships were more than 10 years. Both the suppliers and retailers gain more profit if they attain a mature supply chain stage Ricks (2000) in his study revealed that the important area of need for fruit industry supply chain is consistent but not excessive supply of products to meet the market demand. This involved the supply of products balanced with demand in the same seasonal years and over a period of several years. Ioanna Reziti (2003) in a study An investigation into the relationship between producer, wholesale and retail prices of Greek agricultural products verified the nature of the response of the wholesale price to changes in the producer price and also the response to the retail price to producer price changes. Monthly price information was analyzed by testing for

the existence of a long-run equilibrium between the price series. The study facilitated that markets should be integrated in the long run, because in the long-run equilibrium relation exists between prices at different levels and price transmission is incomplete in the short-run. In most markets the causality runs from retailers to wholesalers and to producers. He found out that changes in the price at one stage need some time to be transmitted to another stage for various reasons, such as policies, storage and inventory holding and delays caused in transportation and processing. Narayana Reddy (2004) in his study efficiency benefits pass on to consumers. New development in retail market environment in India, he reported that most (61per cent) of the retailers get their requirements from wholesalers, 15 per cent from the large and other retailers. Over 17 per cent of the selected retailers get their goods from more than one source, but a small per centage of retailers get some of their requirements from producers. From the side of the terms of supply 67 per cent of retailers get their requirement by paying cash. Only 13 per cent of the retailers get their requirements on credit and 19 per cent get credit partly from the suppliers. Apart from this, the study also shows that the organized retailers and super markets get wholesalers margin plus concession as they buy in bulk. Subha (2004) in a study of managing supply chain, the study conclude that seeking sustainable and defensible competitive advantage has become the concern of every manager who is alert to the realities of the market place. Adding value through differentiation is a powerful means of achieving an edge in the market place. When companies create vision, try to restructure their organizational structure, exercise caution in implementing supply in their organization and it will definitely be able to enjoy a competitive position in the market. By suitably integrating the members of the supply chain and maintaining the information flow within the organization will surely help it to meet the demand in the market place providing satisfaction to the customer. Suresh (2005) supply chain management (SCM) is the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole. Thus the focus of supply chain management is upon the management of the relationships in order to achieve a more profitable outcome for all parties in the chain. Organizations use SCM to reduce or eliminate the buffers of inventory that exists between organization in a chain through the sharing of information on demand and current stock levels. Suneel Arora and Mukesh Vyas (2006) discussed the importance of IT in organized retail management. With the use of information technology, a retailer can link with supplier order and planning systems to enable more accurate forecasting and production planning. With small cost increments, a retailer can provide better customer service and manage the inventory and get value propositions of such investments.

2.2

Marketing efficiency

Hugar (1980) in his study on marketing of vegetables in Belgaum city found that marketing cost incurred by producer sellers for cabbage, brinjal and tomato was Rs. 7.73, Rs. 8.62 and Rs. 8.17 per quintal respectively in the supply chain of producer to consumer with the involvement of wholesalers and retailers. But, in the supply chain of producer to consumer with involvement of cooperative society and retailers the marketing cost was Rs. 6.65, Rs. 7.40 and Rs. 9.00 per quintal of cabbage, brinjal and tomato respectively. The cost incurred by producer seller in the cooperative supply chain was lower as compared to traditional supply chain. This was mainly due to lower rate of commission charged by cooperative society as compared to wholesaler or commission agents. This suggested that relatively more efficient performance of cooperative supply chain over traditional supply chain. Jairath et al. (1981) the study valuated Mandi milk scheme which collected milk from hundred villages covering a distance of fifty kms with five chilling centres. They found that the milk procurement cost worked out to be 40 per cent of the total cost of marketing milk. Naidu and Tirupathaiah (1991) worked out prices spread in groundnut marketing under different chains in vijayanagaram district of Andhra Pradesh. They found that a large proportion of their produce through the village merchant followed by direct sale to oil miller. The share of the producer in the consumer rupee was found to be higher in the direct sales to oil miller i.e., 86.63 per cent compared to chain followed that is sales through village merchant

i.e., 79.66 per cent. The foregoing studies revealed a considerable variation in the size of the marketing costs and margins in oilseeds. The commodity passes through from producer to mills and consumers appeared to be a crucial factors in influencing the magnitude of marketing cost and margins. Vedini (1997) conducted the study on cost and margins in Jasmine flower marketing. The study was conducted in Mysore city. It was interesting to note that all the sample farmers sold their produce at their nearest markets in Mysore district. It was significant to note that the trader cum commission agents are playing a very crucial role in Jasmine flower marketing than the direct sale to consumer. The study results explicitly indicate that Jasmine flower trade is a profitable venture with a price spread of nearly 49 per cent among all the intermediaries the net return per kg of flower trade was the highest in case of retailers due to creation of form utility. The constraints call for orderly marketing by establishing co-operative for flower marketing. Devaraja (1998) conducted a study in Hassan district on channels and price spread in potato marketing, he selected 200 farmers from 30 village and 40 market intermediaries indexing 15 commission agent, 15 retailer vendors and 10 cart vendors. The study identified 3 supply chain, first chain included commission agent and retailer for the movement of produce from producer and consumer in the nearby market of Hassan. Second chain included commission agent and retailer for the movement of produce from producer and consumer but distant market of Bangalore and third chain included commission agent and cart vendor from producer to consumer. The price spread analysis revealed that producers got the net price of 48.57, 51.15 and 52.32 per cent of the consumers rupee in first, second and third supply chain respectively. In third chain representing distant market Bangalore, the consumers rupee was the highest. Hence selling of produce at the distant market was found to be more profitable to the farmers. The study also revealed that the producers net price could be increased by taking suitable measures by government like (a) providing cold storage facilities to producers (b) present system of commission charges being collected from producers should be stopped (c) providing support price facilities to producers when there is heavy price fluctuations in peak seasons (d) efficient and cheap means of transportation by the market committee (e) fluctuations in the market prices of potatoes may be eliminated by regulating and streamlining the supply by establishing potato processing plants in the production centres of manufacturing of processed potato products. Sen and Maurya (1998) for studying the marketing of vegetables in Sewapuri block of Varanasi city it included ten sample villages for 10 vegetables and 150 sample farmers; it was conducted during 1993-94. The study revealed that for the total marketing charges (including cost of transport0 payable, 65.92 per cent and 66.98 per cent are payable by the sellers (producers) 12.22 per cent and 11.84 per cent by wholesalers and 21.86 per cent and 21.18 per cent by retailers in Chandwa and Kamachcha markets respectively and a little more than 28 per cent and 31 per cent of the marketing charges are accounted for by the cost of transport in the two respectively. While studying price spread between the price received by producers in selected villages and that paid by the consumers in Varanasi city included all the marketing charges (including commission and transport charges) paid by the wholesalers and retailers. By the study it also observed that the producers share in consumers rupee for the vegetables was the lowest for tomato and highest for brinjal in both the markets. Totally, the share of the producers was highest for vegetables with less perishability or with facilities of cold storage while it was lowest for vegetables with greater perishability. The margin of wholesalers and retailers for such vegetables (like tomato, greenpea) was highest. Finally, the price spread accounted for more than 33 per cent of the price paid by the consumer for major vegetables under study. Anil Kumar and Arora (1999) conducted study on post-harvest management of vegetable in Uttar Pradesh hills found that non-availability of cold storages, highly perishable nature of the vegetable, low marketing demand for the produce at the time of storage are the major problems as perceived by farmers. Gupta and Rathore (1999) they conducted a study on disposal pattern and constraints in vegetable marketing in Raipur district of Madhya Pradesh in 1995-96. The study followed two supply chains one was producer to consumer with the involvement of wholesaler and retailer and other one was directly from producer to consumer. They compared the pricing in both the supply, price in direct sale from producer to consumer was higher than the

price in sale of produce from producer to consumer with the involvement of wholesaler and retailer for all the crops they covered i.e., tomato, brinjal and chilli. The maximum difference between the two prices was observed in case of tomato where producers received 6 to 59 per cent higher price in supply chain where wholesalers and retailers where involved followed by brinjal, where this difference varies from 24 to 35 per cent in both prices. The minimum difference i.e., 11 to 18 per cent between two prices was observed in case of chilli. The various marketing costs incurred by wholesalers and retailers along with 8 per cent commission charged by commission agent was the main reason for lower prices realization by farmers in supply chain of direct sale of produce from producers to consumers. On the marketing cost incurred by vegetable producers in different marketing operations include charges taken by commission agent as commission constituted to more than 60 per cent to 46.63 per cent transportation cost constituted 22 to 39 per cent of total marketing cost. The efficient use of means of transportation and distance covered by farmers may influence the transportation cost, expenditure incurred by farmers on packaging shared about 8 to 9 per cent of total marketing cost. The farmers spent almost equal amount for these two operations. They generally used gunny bag to pack the vegetables like brinjal, chilli and cauliflower, while bamboo baskets were used by them for tomato. Other expenditure incurred on octroi and mandi, combinedly were about 4-5 per cent of total marketing cost. Susanta (2000) Conducted the study on integrated post production management and food processing in India with the national objective. The study findings identifies that India produces over 200 million tones of food grains and about 132 million tones of fruits and vegetables. The wastage cost of fruits and vegetables is estimated to be Rs. 23, 000 each year in our country. The unnecessary wastage of valuable commodities can be checked if they are processed into value added products or adequately distributes in different apart of the country and by improving the post harvest distribution and processing facility. If fresh fruits and vegetables and also processed fruits are evenly marketed from the place of abundance to the place of scarcity not only will the consumer get the produce at a reasonable price but also the producer will not be found to sell at throw away prices and identified some of the techniques which are not followed in our country like primary processing packing station. On farm storage, packaging, palletisation, containerization, cool/cold chain etc. and lastly concluded that post harvest losses are more economically viable in future if they are not targeted. Angela Maria and Mathias Von Oppen (2002) study was conducted to know the efficiency of vegetable market in Northern Thailand and it indicated that wholesale markets present outside the cities have strong influence on price determination for retailers. The average price for Cabbage was 12.65 Baht/Kg, for Carrot it was 19.42 Baht/Kg, for Onion 22.31 Baht/kg and for Tomato it was 18.07 Baht/Kg in retail shops in the city. Whereas it was 11.06 Baht/Kg, 17.63 Baht/Kg, 20.33 Baht/Kg and 16.34 Baht/Kg for Cabbage, Carrot, Onion and Tomato respectively for the outskirt retail shops. Pandey et al. (2003) the study estimated the price spread and producers and market intermediaries share in the consumer price in the channel: Producer commission agent retailer consumer in potato marketing at Shimla. For the present study samples of 25 potato growers, 10 commission agents and 25 retailers were selected purposively. The result showed that the producer realized around 73 per cent share in consumers price. The retailer and commission agent earned profit of about 3.5 and 8.0 per cent of the consumers rupee. The price spread and marketing efficiency was found to be about 27 per cent and 3 respectively. Tom Fox and Bill Vorley (2003) study was conducted in UK and studied on the retail food chains pricing policy and found out that, the major retailers extracted more favorable terms from suppliers in order to deliver price deflation to the customers. In UK until the mid 2002, loose bananas were priced at 1.08 per KG for around six years. But as Wal-Mart cut the cost to 0.94 per kg, Tesco, Sainsburys Safeway and other retailers were made to lower the price. They also noted that the major retailers fight price wars both by accepting lower margins themselves and by demanding deep cuts in costs from suppliers. Ganesh et al. (2004) conducted the study of economics of production and marketing of vegetables. The study was conducted at Maccapahar and Calicut of the south Andaman island of Andaman district. It estimated that the marketing cost and margin of middlemen for vegetables at different level i.e., wholesalers and retailers level and found out that, marketing

cost was found to be highest for cabbage, followed by tomato, snakegourd. The main reason for the high marketing cost of certain vegetables was due to the fact that they are transported from far off islands to the main consumption point where they were located. The margin to both the wholesaler and the retailer was highest in ginger (Rs. 14.10 and Rs. 32.50 per kg respectively) and lowest in basal and Marsa (Rs. 0.90 and Rs. 2.00 per kg respectively. Marjatta Sihvonen (2005) in a study on retail-farm price the study was conducted in Finland and noted that the share of retail trade in consumers price of food has increased rapidly over the past five years. When Market margin was calculated found that the share of the retail price all along the supply chain has been progressive. Farmers in turn have been receiving an increasingly lower proportion of the retail price of the food. The farmers share in the price of minced meat had declined from 33.6 per cent in 1999 to 23 per cent in 2004. Farmers share for pork chops have declined from 19.4 per cent to 15 per cent for the same period. The two leading food retail chains increased their market share from 55 per cent in 1990 to nearly 80 per cent in 2005. This increased concentration meant that large retail outlets exert more control over others in food supply chain. Mohammed Jaffar and Namasivyam (2005) conducted marketing cost of banana in Theni district of Tamilnadu. For the study banana growers of Theni district was selected and also the different functionaries which the farmers followed. The study concluded that cutting, loading and unloading commission, transportation and the like were the marketing costs of the banana growers, which amounted to Rs 805, Rs 760 and Rs 734 in the case of small, medium and large growers, respectively. The pre-harvest contractors incurred a marketing cost of Rs 775 per tonne. Transport cost dominated other costs. The marketing cost, excluding interest on working capital was less to pre-harvest contractors than to the growers. Commission agents had to pay Rs 116.67 per tonne towards the marketing cost. The wholesalers incurred a marketing cost of Rs 417.09 per acre. More than 60 per cent of the marketing cost of the retailers was due to wastage. The total marketing cost of retailers was worked out to be Rs 336.67 per tonne. Timothy and Stephen (2005) the study was conducted in the Los Angeles market observation was taken in four major retail chains. They used data of two years of weekly data. They found out that there was lower elasticity of substitution among products within each chain than among chains and also that price promotion was highly effective in increasing product-level market share and variety had a strongly positive impact on sales volume in a particular product line. They also noted that sales at the chain level are nearly unit elastic with respect to price. Anonymous (2006) in the study food retailing in the 21 century riding a consumer revolution, the study was conducted in USA and found that in USA food retailing, labour was the largest single marketing cost, accounting for half the industrys expenses beyond the farm. Food retailers employ more than 3.5 million workers. The industrys next highest costs were for packaging (8.0per cent) and transportation and energy (combined 7.5per cent). Recent trends such as high energy costs and the rising demand for more convenient packaging have increased all these expenses. Anand and Ramesh (2006) in the study marketing distribution and marketing channel for fertilizer in Karnataka and for fertilizer passes through different marketing collected the observation from 400 farmers and studied the chain as fertilizer passes through different marketing intermediaries to reach the final consumers. The sources of fertilizers were retailers, cooperatives, wholesaler and fellow farmers, most of the farmers purchased fertilizers from retailers even though the price of fertilizers were highest in case of retailers because of the reason that the retailers were the most accessible source as it is located in the village itself. The next most popular source was the cooperatives because the farmers get fertilizers on loan with low rate of interest, this followed by wholesaler and fellow farmers. It also analyzed that efficiency of marketing of fertilizers; it is commonly worked out by price spread which refers to the difference between the price paid by the consumer and price received by the producer. But this does not hold good in case of fertilizers because the producers (fertilizer manufacturers) are given sufficient subsidy on production. There by efficiency of the chain in case of fertilizers was assessed by taking the comparative price differences which the ultimate consumer (farmers) pay to different sources for the same generic product. The chain in which the farmers pay the lowest price for the particular product is the most efficient chain having the smallest price spread. The study concluded that cost

operatives was the most efficient chain. The price paid by the farmers for different fertilizers to co-operative was on an average Rs. 30 less than what they pay for the retailers. Lokanadhan (2007) conducted a study on supply chain management analysis of tomato from farm to modern retail outlet. The study was conducted in Hoskote taluk of Bangalore rural district. The specific objective of the study was (i) to identify the modern supply chain managements practices followed (ii) to evaluate the results of the first objective with traditional marketing supply of tomato through market intermediaries. A two stage random sampling was followed to select 60 tomato growers from the study area. The supply chain process of tomato sold through modern retail outlet indicate that plastic trays (25 kg each) were used by 92 per cent of farmers while the rest used bamboo basket. The packing in plastic trays reduced mechanical damages while transport. In case of spoilage of vegetables 10 per cent at wholesaler level and 15 per cent at retail level in traditional supply chain and only 15 per cent at retail level in the modern supply chain was noticed. In studying the price difference the customer price was very high in traditional supply chain (Rs. 1200) and low (Rs. 8.75) in modern supply chain. The net price received by producer was very low (Rs. 4.20) in traditional supply chain and high (Rs. 5.05) in modern supply chain. Hence they concluded that modern retail outlet management improved transparency, involvement of all levels of management, higher price to tomato growers and lesser price to consumers less spoilage of tomatoes than traditional system of marketing. Sreenivasa et al. (2007) conducted study on marketing losses and their impact on marketing margins : A case study of Banana Karnataka. To estimate the post harvest losses field level, transit and wholesale marketing level and retail marketing level was selected for the study and they found out that the margin of the retailers after taking into account the physical loss during retailing has been found to be negative (loss), which otherwise, was positive (profit) in the conventional estimation. Similarly, the producers net share and wholealers margins also decrease substantially. It has been shown that marketing efficiency is inversely proportional to the marketing losses. The cooperative marketing has been found to be a more efficient system in terms of both operations and price. Marketing cost has been identified as the major constraint in the wholesale marketing channel and bringing down the costs, particularly the commission charges as demonstrated in the cooperative channel, will help in reducing the price-spread and increasing the producers margin. The need for specialized transport vehicles for perishable commodities has been highlighted.

2.3

Factors influencing the effectiveness of supply chain

Nicholas (1993) evaluated the role of quality in the US fruit and vegetable production and marketing. The most important quality attributes which emphasized recommended external appearance were size, shape, colour and defects. The author recommended the quality attribute should be regulated for international trade. Acharya (1995) in a seminar on food product opportunities was organized at Bangalore by the Association of food scientist and technologist (India), concluded that food industries were poised for growth. In this the paramount player would be the consumer and the innovations which were necessary would constantly have to be related to consumer perception, especially in the phase of marketing, the major link between product and customer. New technologies in all the axis covered in the seminar offer exciting possibilities for food product development, and there would be scope for the devising of appropriate equipment for manufacture. Health foods of all kinds were certain to be in demand. Export of finished foods of impeccable quality was entirely possible, considering Indias competitive edge. It was reassuring to know that small processing industries appeared well placed to achieve success in the new millennium, if quality and hygiene were ensured innovative products that matched consumer needs. Biradar (1996) studied the marketing costs, margins and price spread of selected agricultural commodities in Kolhapur district of Maharashtra during 1990-92. Identified the supply chains with commodity wise with mainly involvement of cooperative, wholesaler and millers making difference with village merchant and commission agent. The study concluded that cooperative societies can play a greater role in processing, storing and transporting etc. for reducing cost of marketing especially the commission has to be reduced by encouraging the farmers to sell their produce without the commission agents. The marketing efficiency can be increased by employing the certain measures like reducing the costs of marketing and

margins through cooperative societies, widening the range of activities, increasing the volume of business, creating awareness of regulated markets among the farmers, to recruit qualified, trained and experienced market personnel, delinking middlemen and linking cooperative societies in the market, introducing innovative methods of marketing practices through managerial control. Especially the cost of marketing can be reduced by about 3 per cent if the farmers are encouraged to sell their produce without the help of the commission agents. Bridge (1996) conducted a study on supply chain management for fresh vegetable in United Kingdom, the key success factors from the point of view. It was concluded that supply chain management is concerned with the linkages in the supply chain from primary producers to the final consumer. In practices, it seeks to break down the barriers which exist between each of the units in the supply chain in order to achieve higher levels of service and substantial savings in costs. Using the two examples of broccoli and orisping potatoes in the UK the study discusses six steps required for good supply chain management from the perspective of the primary producers, scale of operation, strategic alliance, production/ storage flexibility, continuity of supply, quality control and good communication. Hugar and Vijay Kumar (1996) carried out a study in Dharwad city to identify various factors that influence the consumption of vegetables. A sample of 90 consumers was chosen at random. It was observed that the personal attributes such as educational level and sex had significant influence on the quantity and frequency of purchase. Price had a high influence on quantity purchased among the lower income groups but the effect was not pronounced for high income groups. Wilson (1996) in his study on supply chain of perishable products in Northern Europe found out that, the supermarket chain was more important in the retail marketing of fresh products and he suggested that increased use of supply chain management techniques could increase the margins of the innovative and competitive firms that remain in the chain. Also he found that the inherent cost of distribution networks and channels of fresh produce could be reduced substantially by using supply chain management. The fruit and vegetable supply chain has traditionally been fragmented. Some links have performed well but others have caused bottle necks. Chung et al. (1998) study revealed the factors influencing the furniture retailers purchasing decisions in Taiwan. Important factors of the furniture producers in choosing distribution channels were production capacity, salesmanship, type and grade of the products, transportation and storage. Many distribution channels were available to the producers. The retailers were under pressure to reconsider their management style and marketing strategy in order to obtain more profit. The most important business concerns to the retailers were the product quality and the number of locations selling the same furniture. The salesman in the furniture business agreed that education and training were very important, with 96.70 per cent of the retailers believing that service was the most important requirement for salesman. The factors influencing the retailers decision to purchase furniture were product quality (100per cent), style of finishing (100per cent), special functions (90per cent), assembly functions (90per cent), cheap price (90per cent) and the reputation of suppliers (90per cent). Lars-Fek (1998) conducted the study of understanding the modern cold chain in Sweden he concluded that frozen food consumption is estimated at 40 million tonnes a year and is a necessity for millions of families and institutional consumers in both developed and developing countries. It is no exaggeration to say that our food distribution systems are dependent on refrigeration. Mohamed Zairi (1998) in his study on the best practices of supply chain management in retail sector noted that the retail sector is undergoing major changes resulting from factors such as increased competition and tighter profit margins. He found out that integrated management through the extended supply chain is the most effective means to achieve good value provision to the end consumer, which can be achieved through better product, better quality, better assortment, better in-stock service, less cost throughout the chain, accurate and timely information and committed business leaders. Boklemann and Lentz (2000) conducted a study on pre-requisites for value adding partnerships between trade and producers in the vegetable growing sector, in Germany and it was found that present situation on the market for vegetables was indicated by over production and an unsatisfactory price situation for the producers in Germany. In face of

these conditions a great meaning be fits to the orientation on consumers demands. The marketing system is increasingly driven by changing requests of consumers. Due to this situation and to progress in the information and communication technology far reaching changes of the sales system for vegetables took place within the last year. The ability to compete does no longer depend only on single stage of the delivering chain. Instead of this whole chains are competing with other ones. Consequently the coordinating activities in the delivering chains also become more important to be efficient and competitive. Donald (2000) conducted study on chain management and marketing performance in fruit industry with the use of specific examples from U.S. fruit industries, which includes how supply chain management of agricultural commodity industries can lead to performance enhancing industry which can improve the overall competitiveness and economic viability of these industries. Poot et al. (2000) conducted the study on chain information to support Dutch supply chain effectiveness. For Dutch horticultural products, global competition is getting fierce information from the chain can support Dutch growers to develop competitive strategies. The goal of this project was to collect information from distribution chain of Dutch horticultural products, in order to support chain effectiveness. On the basis of literature and experts opinions, a list of twenty products specific and of twenty supplier specific characteristics was developed. All these criteria can play a role in decision making process of buying products for certain markets. The list was used in a semi-structured interview among Dutch traders of roses, sweet peppers and organic glasshouse vegetables. For horticultural products, freshness, absence of disease and damage and a good product quality price ratio are very important. Within a few years, ensuring the hygiene of edible products will become an important issue concerning the suppliers, exchange of information and willingness to make long term agreements was important. For the future, cooperation between growers and traders will be more intense. Growers should implement quality systems on their farms too. Burke (2001) has created a brand equity index comprised of three components, best described as brand equity molecule, which is overreaching device of retaining and attracting customers. The three atoms which embedded to molecule in (i) image, (ii) value and (iii) loyalty. Image and value perceptions pull in new customers while loyalty and value retain customer. Sangyong (2002) in his study on the growth of food retail chains in South Korea found out that following the liberalization of the food sector to allow foreign ownership during 1996, foreign retailers began introducing hypermarkets, supermarkets and convenience stores. Food sales accounted for 31 per cent of overall retail sales of $128 billion in 2001. Large outlets captured a share of 13.3per cent of overall retail sales and 26per cent of total food sales. Although traditional markets accounted for 67 per cent of retail food sales, the modern formats are making a steady progress. Somayajulu and Venkataramana (2002) in a study issues and challenges for organized retailing in India, in the retail markets in India during 1995-96 large retailers followed some issues like identifying customer segments and understanding differences in the shopping habits of consumers across income groups and also cost disadvantages vis--vis the smaller retail formats. In identify customer segments, it was found that India is mainly a groceries market and in this area super markets have not been able to cut into the customer base of the small retailers. While a typical Indian housewife might pick up toiletries at the super markets, she continues to use her local cart pusher for her daily needs such as fresh vegetables, fruits etc. infact organized retailing has only touched the self esteem and social recognition needs of the Maslows need hierarchy pyramid. And until organized retailing reaches out to the base level needs, the country wont witness a retail revolution. For that to happen, super markets need to replace traditional shops. This may not be as simple as it looks since the smaller retailer maintains excellent customer relationships while providing a range of services such as extending informal credit, home delivery of groceries etc. Hence they conclude that, organized retailing has definitely made headway in the upper class. However, in this segment, items such as milk, fruits, vegetables and a significant portion of through the month purchases seem to be done traditional outlets. The middle income class prefer shopping for processed food and personal care in super markets and fall back on traditional outlets for bulk shopping. Organised retail outlets seem to be associated with branded items and do not seem to have made an impact on the lower class, except for

curiosity shopping. While considering cost disadvantages vis--vis the smaller retail formats found that retailers have to get their strategies right i.e., correct identification of their target segment, a compelling value proposition and a flexible expansion strategy also they have to invest in processes and infrastructure. Now, companies have to make a beginning by inventing suitable approach. There is no specific international format or role model that can be easily adapted and applied in India. The Indian retailers, therefore, need to go through their own learning curve and get the right proposition only after some hits and misses. Some of the leading chains have succeeded to have a degree in convincing consumers that their quality products come at equal, if not lower, prices. This is largely due to efficiencies achieved in supply chain management. Such stores have done away with intermediaries in the supply chain. Thomas and Julio (2002) in their study on The Rapid Rise of supermarkets in Latin America found out that the percentage of retail food chains in the total food retailing has increased steadily. The percentage share of retail chains was 57per cent in Argentina, 45per cent in Mexico, 50per cent in Chile, 70per cent in Brazil, 50per cent in Costa Rica and 38per cent in Columbia in the total food retailing in these respective countries. The small traditional retailers were the main losers and many thousands of small shops, mom and pop stores, went out of business. About 64,198 small shops went out of business in Argentina from 1984 to 1993 and 5240 small shops were closed in Chile from 1991 to 1995. The winners have been the supermarkets and chains of smaller self-service stores such as the hard discounts and convenience stores. He also noted that there was acquisition of small retail chains by the larger ones and supermarkets spreading from urban areas to intermediate cities and from upper income neighborhoods to working middle class neighborhoods. Udaya (2002) studied the marketing management of pesticides in Karnataka. The result of the study shows that the price of preferred products was significant at 0.1 per cent influencing the dealers loyalty to the large extent. The malpractices prevailing at the dealers point also significantly influenced the farmer. Credit availability, discount / gift/ incentive, quality and availability of preferred brands were significant at 5 per cent level influencing the dealer loyalty. The multiple determination was found to be 0.57 explaining the variation of 57 per cent in dealers loyalty of farmers to the variables included in the function. Anonymous (2003) in their study on retail chain store which was conducted in the retail industry of Vietnam found out that it is heading for a format. They also noted that several enterprises are preparing to start their own retail chain store system under franchise model. Many retailers were in favor of selling their products in supermarket, as they can earn more profits by selling goods in bulk. The growth in Vietnam retail industry, as noted by them was due to various factors like steady economic growth, increasing number of people belonging to the middle class with higher disposable incomes, increased business opportunities and a stable political environment. The prime reason for their popularity among people is its ambience, quality of products and its capability to suit the needs of the consumers. Blent Sezen (2004) A study conducted on the pricing strategies for perishables products found out that Consumers are less likely to purchase perishable goods when their expiry dates are near. For this reason, retailers frequently implement a discount pricing policy when the products have reached closer to their expiry dates. Thus the retailer tends to gain by reducing losses due to spoilage. Carlos and Alberto (2004) Analyzed hypermarkets and supermarkets in Portugal to compare retail chains that compete in the same market. A two-stage procedure to benchmark the companies was adopted. In the first stage data envelopment analysis (DEA) was used and in the second stage a Tobit model was employed to estimate the efficient drivers. He found out that, on an average, the efficiency of hypermarket and supermarket retail companies is high compared with that in other sectors and also that larger retail groups are more efficient than the smaller retailers. He also noted that national retailers are more efficient than regional retailers. He concluded that scale played an important role in this market and the efficiency drivers were market share, number of outlets and location. McLaughten (2004) in the study of the dynamics of fresh fruits and vegetable pricing in the super market channel, it concluded that major factor that contribute to the complicated price formation process at several levels of fruit and vegetables in the US were marketing

channels, market structure changes, pricing techniques and promotional impacts, retail responses to supply changes, and price versus value. Nath (2004) conducted a study on promoting small scale fruits and vegetable processing industries through cluster development programme. Cluster development programme is growing in India with the initiative of government of India and united nations development organization for the study UNIDO has identified more than 2000 Astisan and 350 industrial clusters in India in which many are in food processing sector such as food processing cluster of Pune, Muzzafarpar and Petha cluster of Agra, Racsins cluster of Nasik and also some non-government agencies. The study identified the linkages with various actors of any industrial cluster are shown in the diagram below. Raw material suppliers

Machinery suppliers

processing unit

marketing - Dealers Traders, exporters

Govt. Regulatory bodies Packaging materials

Support institution

By this study concluded that, no development can be possible without proper linkage and co-ordination among the above actors in the diagram and particularly in marketing. It concluded that the small enterprises compete with each other with in a limited market segment; the larger market enterprises have got the advantage of catering to affluent section of the society through their brand image, advertisement and publicity and through procurement. Further it concludes that the age old system of procurement of fruits and vegetables and other raw materials from mandi with involvement of middlemen or commission agents is continued by most of the small enterprises. To reduce the cost of production, direct purchase from the source collectively by the cluster of units by forming where farmers are benefited with remunerative prices and processors are benefited with assured supply of right quantity and quality of raw materials may be thought of. Li et al. (2006) conducted a study on Food retailers pricing and marketing strategies and found out that retail grocery chains are the dominant players in the vertical market channel for many commodities. Retailers through mechanisms of vertical control exert a strong influence on upstream suppliers and determine the products offered in their stores. They also noted that large retailers posses some degree of oligopoly. The small scale producers revenue decreases when retailers use promotional sales as a selling strategy although the consumers are benefited. Venkateshwaralu and Ranjani (2006) conducted a study on small vs small in twin cities of Hyderabad and Secunadrabad. A total of 50 retailers were taken out of which 40 were kirana and 10 were super markets. The study firstly, identifies the impact of malls on the existing retailers i.e., 36 per cent of the retailers feel that there is no much impact of such mall, since their regular customers still patronize them and 24 per cent of the respondents opine that there is scope for healthy competition, 22 per cent feel that there would be cut in margin, remaining 10 per cent, there would be unhealthy competition. Secondly, identifies the impact of malls on small retail outlets i.e., 58per cent of small retailers are of the opinion that there would not have much impact on retail trade by the big retail outlets. The impact of malls on small retail outlets was towards cut in margins. Forced to widen the wide range of products, losing loyal customers, concentrate more on product range, inevitability of promotional tools and credit sales, visual merchandising and store design. Finally the impact of small retail outlets on malls was towards credit facility allowed by the small retailers,

personalized service rendered by the small retailers, proximity of small shop to customers residence, common phobia to enter big shop and many customer prefer smaller ones. Unlimited timings of the small shop and they found that 54per cent per cent of big retail outlets believe there would not have much impact on small outlets on their business. The study ultimately concludes that survival of the retailers, irrespective of size, big or small has become difficult and supermarkets are yet to get the Indian middle class and rural India in their fold. Vijaya (2007) conducted a study on the spread of organized retailing in India with special references to Vijaywada city. The study was carried out at retail outlets in Vijaywada city involving primary and secondary data and data was obtained by administred questionnaires to elicit information on various issues relatively to purchases made by them from retailers. The questionnaire was administered to a sample of 275 respondents. The findings of the study revealed that 71per cent of purchasing of household goods and items are made from local kirana shops, 27per cent getting goods from supermarkets and small percentage of 6per cent buy from big outlets. The study also revealed that 54per cent of respondents visit shops because it is convenient for them to go and purchase goods. Quality of the goods is also a matter of concern for 24per cent of respondents.

2.4

Problems faced by the farmers, functionaries and consumers

Gopalan and Gopalan (1991) with regard to agricultural marketing system in India which suffered from severe constraints like high costs, the existence of middlemen, storage and transport bottlenecks and a lack of market information among farmers. This article uses a case study of the Tamil Nadu to evaluate various methods of raising marketing efficiency. The analysis suggests that the cooperatives has weakened the many small monopolies and malpractices of middlemen and has led to a considerable improvement in marketing efficiency. However, there is a need for more timely and adequate application of farm inputs, better coverage of potato growers, grading schemes and more efficient dispersal of information, among other requirements. Brumifield et al. (1993) found that customers is King. Super markets in New Jersey during the local season preferred tomatoes grown in New Jersey to tomatoes from other origins. A regression analysis was used to fit the data to determine the factors affecting the demand for fresh tomatoes, tomato origin significantly influenced consumer purchases, consumer perception of product characteristics such as colour, freshness, nutrition and appearance did not appear to significantly influence tomato purchase patterns. However, pests on the tomatoes or substitutes and income were important determinants of purchase of both New Jersey grown and other tomatoes. New Jersey grown tomatoes were generally perceived to be of superior quality. Horneburg and Hubner (1994) a survey was carried out on markets and in shopping centres in W and E. berlin, Germany between June 1991 and June 1992, to study the shopping habits of 303 sample of potato consumers. About 40 per cent of the consumers bought a 2. kg of lime potatoes once a week. Half of the consumers preferred the shopping centre than that of market. For almost 85 per cent of consumers, the potato quality was of primary importance, whereas price was secondary importance. However, consumers in E Berlin were slightly more concerned about the price than those in W. Berlin. More than 70 per cent of consumers were generally satisfied with the available offer and guatter. However, some consumers wished to choose between more varieties, and 7 per cent demanded a higher proportion of organically grown potatoes. About 3 per cent of customers would prefer a more environmentally friendly packing. Biradar (1996) studied the marketing costs, margins and price spread of selected agricultural commodities in Kolhapur district of Maharashtra during 1990-92. The study revealed that marketing margins, cost and price spread of different commodities in the two common channels under study was followed, it was found that the maximum average share of the farmer in the consumers rupee is found in two commodities i.e., jaggery and groundnut, being 80 per cent and 72 per cent respectively, as compared to the food grain commodities, i.e., paddy and wheat, being about 68 per cent and 56 per cent respectively. The average cost of marketing and margin are to be the lowest in jaggery as compared to other commodities under study by and large, the cost of marketing is found uniform in all the selected commodities, whereas the market margin is varying from commodity to commodity

and from market to market. The highest margin is claimed by the traders in wheat and paddy that is 32 and 21 per cent respectively while in groundnut and jaggery their margin being 17 per cent and 10.12 per cent respectively. Sarin (1996) in his study of marketing effectiveness for industrial growth, it concluded that marketing set up should share the following factors like product/ services development secrets, costing and pricing policies, guidance to change in the context of consumer needs, industry should have their own consortiums with least involvement of state, state should help by moderating levy of local taxes such as sales tax etc, municipal taxes must be levied selectively. The aim for a free economy with less state interference and also studying the marketing effectiveness for industrial growth he concluded that the industry should be make available information in respect of cost of inputs, size of the market, price preferences, consumer demands product innovations in foreign markets, R and D work in laboratories applied to the industry. Merrilees et al. (1997) describing the success of superstores states that the most essential ingredient is the greater ability of the organized retail format to met the needs of the time poor consumers seeking a convenient, one stop way of shopping with benefits from a much wider range, lower prices and usually a brighter, more interactive store atmosphere. Singh (1997) fifteen vegetable growers were selected randomly each of three village in the Patan sabzi mandi of Patan, Madhya Pradesh, during 1995-96. The growers all produced tomato, brinjal and okra are considered. The various components arising from market forces were analysed. The cost and return in vegetable production were estimated along with marketing efficiency, the result showed that tomato vegetable yielded the maximum return per hectare followed by brinjal and okra and in case of marketing efficiency, market existing in the locality was found to be reasonably efficient though not regulated. The problems faced by the vegetable growers were analysed and suitable remedial measures were suggested. The opinion survey revealed that problems were lack of post harvest technological services, such as grading packaging, transportation, cold storage, processing and weak linkage of institutional support, marketing information services etc. Sailaja et al. (1998) using data collected from 90 farmers in Guntur district, Andhra Pradesh, the resources use efficiency and productivity of tomato, brinjal, cauliflower and coccinia production are examined. Results indicate that vegetable production is profitable despite major constraints such as the non-availability of quality seed, inadequate credit and marketing facilities, shortage of water and inefficiency in post harvest handling. Fearne (1999) in his study found that super market strategies, food safety legislation and supply chain intensity, rationalization of the supply base and innovation are the four key driven the transformation of the fresh produce industry of UK. Under super market strategy he found out that own label products accounted for closely half of all foods purchased in the UK super market. Changing the location of fresh produce within the retail store yielded 50 per cent increase in their fresh produce sales. The search for improved supply chain integrity and greater consistency in the quality of fresh produce coupled with the need to squeeze the cost out of the supply chain, through greater control has resulted in the rationalization of supply base, with retailer seeking the deal with few numbers of larger, technically efficient and innovative suppliers. Gupta and Rathore (1999) they conducted a study on disposal pattern and constraints in vegetable marketing in Raipur district of Madhya Pradesh in 1995-96. The study followed two supply chains one was producer to consumer with the involvement of wholesaler and retailer and other one was directly from producer to consumer. In the study they found that the various constraints faced by vegetable producers and also expectation suggested during the production and marketing are noted such as lack of resources was the main problem in vegetables production. They suggested in this context that financial institutions should make easy process to sanction the loan for vegetable production. They should also increase per hectare limit of loan because vegetable production is capital intensive enterprise, unbalanced use of fertilizers due to lack of technical know-how was another problems. Hence farmers should apply recommended of doses of fertilizers according to soil test. Nonavailability of good quality seed is also a genuine problem of farmers. Until farmers do not get good quality seed, all the efforts in the direction of vegetable production will go waste. Producers also felt some post harvest problems. Some marginal and small farmers

experienced difficulty about efficient transportation from village to market. Due to small produce with them, they are unable to hire big and efficient means of transportation. Most of the farmers were of the opinion that vegetable based processing industries especially tomato must be established in producing areas in order to provide remunerative prices to farmers of their produce. Due to lack of storage facility, regulated and cooperative marketing producers are forced to sell their produce through commission agents, who charged 8 per cent of the value of produce which is quite high. A good number of farmers complained in this regard. Some of the farmers perceived that an adequate arrangement should also be made to disseminate the market news and rendering of grading service for vegetables in order to receive better prices of the produce. Orth (1999) study of a consumer survey was connected in a German city of 40,000 inhabitants to assess the competition at the local market for floricultural products and services 294 out of 300 distributed questionnaires could be utilized. The consumer barometer provided information of consumer shopping behaviour and on market shares of various competitors (retail institutions like garden centres, retailing growers, retail floral shops, etc.). Additional findings extended on individual strengths and weaknesses of relevant retailers structured by product groups and performance features indicating their current position in the competition. For one selected garden market an adequate marketing strategy had been developed to increase its competitiveness and to ensure future existence of the company. The paper concluded with considerations on an application of the method for evaluating marketing measures and to develop marketing controlling system. Gungor and Gungor (2000) in determining the marketing structure and developing possibilities of the cut flower sector in Turkey and while interviewing with the owners of the cut flowers shop. The problems were determined such as seasonal fluctuations occurred in the prices inadequate grading and standardization processing expensive chair hiring. Higher delivering costs of the cut flowers to the customers, high membership fee, unfair competition, consumers decision was varying for gifting as more substitute products/ gifts were available and easy set up of the shop by getting necessary certification from the association and some main problems of cooperative was cooperative management have difficulties in paying the producers, cooperatives have great financial problems, the quality of the products are affected negatively due to the lack of government support for the cut flower producers. The lack of effectiveness of the cooperatives on the producers for their production decisions such as separating production on a time schedule causes price fluctuations and irregular income. Pankaj and Ken (2000) in their study found out that most of the value created by a company is pocketed by its consumers. When Wal-Mart enters the market, prices decrease by 8 per cent in rural areas and 5 per cent in urban areas. This was mainly because the retailers source their products from the suppliers who supply the required goods at a lesser price than others. Poot et al. (2000) conducted study on chain information to support Dutch supply chain effectiveness. They found that Dutch growers are able to produce high quality products, but that they have problems to supply large quantities, at uniform qualities at low prices with their method it is possible to get insight in price and future demands on horticultural products and on the services of their suppliers. This information can be used by Dutch horticultural industry to develop customers driven production and distribution strategies. Wermund and Fearne (2000): conducted a study on key challenges facing the cherry supply chain in the UK. The study was conducted between September 1999 and April 2000. personal interviews were conducted with each link of the cherry supply chain, including 10 growers, 5 importers/marketing organizations, 5 major retailers and 3 researchers. The interviews were followed by further qualitative research into consumer purchasing behaviour of stone fruit in the UK. The ultimate result from their study was that the fruit sector in the UK is struggling to maintain its competitive position. Substantial competition from imports and the variable climate are major constraints on British fruit production, particularly in the stone industry. Multiple retailers believe that increased quantities of quality domestic produce can be sold easily if current production problems such as irregular cropping for cherries can be overcome. Qualitative research has been used to identify the key challenges facing the cherry supply chain in the UK. Initial result suggests that consumers are prepared to pay a price premium for home grown cherries, offering real opportunities, for UK stone fruit growers.

Elsa et al. (2002) while studying the Consumer Behaviour and Supermarkets in Argentina from the perspective of differences over regions and categories of consumers noted that the more the education, income, durable assets and consumer credit of the consumer, the greater the probability that they will shop at a supermarket. They found out that those living in a northern region showed less probability of shopping at a supermarket. They concluded that Argentinean consumers were less likely to buy fresh fruit and vegetables, red meat, and bread at a supermarket, as they would rather buy these from shops offering personal attention and service for those products. Somayajulu and Venkataramana (2002) in a study issues and challenges for organized retailing in India in highlighting the challenges and impediments to growth of large retail formats, it found that first challenge facing the organized retail industry in India is competition from the unorganized sector. Organized retail in India is largely, a proposition of poor economies of scale. It was interesting to note that the unorganized sector are mostly owner operated, is very competitive and offers products to consumers at a lesser price since it has low operation costs, negligible real estate and labour cost and pay little or no taxes. In contrast, larger organized retailers have substantially higher expenses to meet, and yet have to keep prices low enough to be able to compete with the traditional sector of real estate (as high as 40-70 per cent of the total investment), much bigger premises, cost of providing facilities such as air conditioning and backup power supply, high cost of capital, high levels of taxation etc. This forces the larger modern formats on wafer-thin margins. And also the retail margins for fast moving consumer goods in India, range between 10-12 per cent the same margin in many other countries is in the range of 25-30 per cent. Nageshwar Rao and Bramhanandan (2003) in their study on problems of retail traders in Guntur district of Andhra Pradesh found that increasing salary, other incentives and working hours were major problems from the employees side. Rent on building was a problem of retail traders (62 per cent) since they were facing many problems from the building owner side like high rent, frequent repairs and demand for more good-will. Apart from these retailers (44 per cent) also had faced many problems on media like high rates, inadequate information and coverage of area and timing problems. Ayieko et al. (2005) in their study on fresh fruit and vegetable consumption patterns and supply chain systems in urban Kenya studied the urban consumption patterns of fresh fruits and vegetables. Study involved 524 consumers in Nairobi and 143 wholesale and retail traders involved in urban fresh produce trade. The results showed that while there are households consuming fresh produce at levels below WHO/FAO recommended levels across all income groups, the poorest people in urban areas were the lowest consumers of fruit and vegetables. Also, as income increases, the level of fruit and vegetable consumption increased and approached the WHO/FAO standards. The study further showed that fresh produce consumption is influenced by education level, age and the gender of household head. The fresh produce consumers tend to be highly specialized in terms of their shopping patterns as compared to other food groups, often dominating the open-air markets and kiosks. Mark Gehlhar (2006) conducted a study in Brazils retail industry noted that the industry was making a comeback after recovering from economic crisis in the previous decade. This was mainly due to rising purchasing power and stable middle class income. Brazilian Consumers preference was changing rapidly and the preference was shifting from household consumption to personal consumption. The retail trade was U.S $237.66 billion in 2005 of which retail food sales accounted for more than half of total retail sales with 54per cent. The top 3 players accounted for more than 40per cent of the total market share.

3. METHODOLOGY
The present study was carried out to examine the marketing efficiencies in performance of functions in the supply chain by traditional, co operative and modern formats in vegetable marketing. Hence the methods and procedure followed in conducting this research is furnished under the following heads. 3.1 3.2 3.3 3.4 3.5 Description of the study area Nature and source of data Sampling procedure Analytical tools and techniques employed Terms and concepts used in the study

3.1

Description of the study area

Bangalore is draped over the Deccan plateau in peninsular India at an altitude of 949 mts (3113 ft), above sea level. Bangalore lies in the south east of the south Indian state of Karnataka. It is positioned at 12.970N 77.560 East and covers an area of 2190 km2. The major city area of the city lies in the Bangalore urban district of Karnataka and surrounded by rural area and parts of Bangalore rural district. Bangalore district borders with Kolar district in the north east, Tumkur district in the north west, Mandya district in the south west, Chamarajanagar district in the south and the neighbouring state of Tamil Nadu in the south east. Bangalore enjoys a pleasant, salubrious and unflappable climate throughout the year. 0 The summer witnessing temperatures up to 39 C and the winter witnessing a lowest 0 temperature of 8 C. Monsoon begins in July and carry till September. Bangalore receives rainfall from both the southwest and northeast monsoons and the windiest months are September, October and August. The heaviest rainfall recorded in a 24 hour period is 180 mm. Bangalore has handful of fresh water lakes and water tanks, the largest of which are Madivala tank, Hebbal lake, Ulsoor lake and Sankey tank. Ground water occurs in silty to sandy layers of the alluvial sediments. Soils of Bangalore consist of red laterite and red fine loamy to clayey soils. Bangalore is the fastest growing Indian metropolitan city whose population is estimated to be 6.1 million, which is the third largest city and fifth largest metropolitan city. The city has the second highest literacy rate among the metropolitan cities in the nation. The area map of the Bangalore city is presented in Fig.1. Bangalore is famous as silicon city of India due to its fastest growth in software exports which accounts for 35 per cent of Indias total software exports and is also well known as garden city of India because of its climate, greenery and home for many public parks which also constitute the famous Lalbagh and Cubbon Park. Bangalore over the years has lead to growth of public sector heavy industries especially aerospace, telecommunication, heavy equipment, space, machine tools and defence.

3.2

Nature and source of data

In order to test the specific objective of investigation, data was collected from the primary sources. Primary data regarding the marketing efficiency of the Supply chain for the year 200708 was collected from the farmers with respect to cost of marketing, value added and price received by them. Similarly, the data on cost and return obtained by the market intermediaries as well as by the retail formats were obtained through interview schedule, which contains indicators such as physical losses involved, quantity sold, selling price and commission received by the intermediaries or by any firms. Similarly, the data regarding the roles played by intermediaries and contracting firms, factors influencing the supply chain, problems and expectations of the farmers, retail formats and consumers were also collected through a structured schedule by personal interview.

3.3

Sampling Procedure

3.3.1 Selection of the study area


Bangalore, the capital city of Karnataka is one of the biggest cities of India and is also fastest growing metropolitan and cosmopolitan in nature. Bangalore has a pleasant climate, which is a home place of different religions, castes, occupations, cultures, speaking diverse languages and of different food preferences. It is the IT and BT hub of India, with industrial estates, international air ports, many fruits and vegetable markets and numerous financial and educational institutions. Bangalore city was selected as the study area for studying Supply chain management in vegetable marketing as the city was the hub of retail revolution having many fruit and vegetable markets operating from a long period of time. Also, many Supply chain formats have opened their outlets recently in the city at many places. The retail formats have made Bangalore as their focal point of the managerial operations. Many vegetable growing districts surrounded the Bangalore city including Bangalore rural district. Farmers growing their produce in these districts bring their produce to wholesale vegetable market and to emerging retail formats established in Bangalore. To evaluate the objective of the study multistage random sampling technique was adopted. Mainly three models of Supply chain techniques were selected. They were traditional, co operative and modern Supply chain. At the initial stage farmers were selected in each chain who sold their produce in selected Supply chain. In the second stage, intermediaries involved in the supply chain specially in supply chain of vegetable marketing where large number of intermediaries existed. In the third stage retail formats of each chain was selected. Similarly, in the final stage the consumer who purchased the vegetables from each chain was selected. Firstly, in the Traditional supply chain 20 farmers, 4 intermediaries, 5 traditional retail formats and 20 consumers were selected at randomly. Secondly, in Cooperative supply chain 20 farmers, 5 retail formats and 20 consumers were selected at random that is from the organisations of HOPCOMS and Safal which working under Cooperative units. Thirdly, in Modern Supply chain 5 farmers, 15 retail formats and 20 consumers was selected at random from the organisations of modern retail firms such as Subhiksha, Namdhari, Spencer, Reliance, Fabmall. Only 5 farmers were available doing direct business with these formats hence only these 5 farmers were selected. However the total size of the sample with respect to farmers, retail formats in each type of formats was decided keeping in mind the time, resources and availability of sample for the investigator. Thus a total of 45 farmers, 4 intermediaries, 5 retail formats and 60 consumers were selected in aggregate from all the supply chain format models. For the homogeneity of the result 4 vegetables namely Tomato, Cabbage, Carrot, Capsicum which were commonly delt in large quantities in all the selected models of supply chain was selected for the study.

3.4

Analytical tools and techniques employed


Detailed description of the analytical tools employed in the study is given below.

Simple conventional method of tabular analysis was used to study the marketing efficiency. Average and percentage were worked out to examine the roles played by the intermediaries, contracting firms, factors influencing supply chain, cost and returns in the supply chains, problems and expectations of the producers, retail formats and consumers in the Supply chain was worked out.

3.5 Terms and concepts used in the study


Supply Chain Management (SCM) Supply Chain Management is the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the management as a whole (Suresh Reddy, 2005).

Traditional Supply Chain Traditional Supply Chain is the upstream and downstream relationships with Farmer to Commission agent to Wholesaler to Retail format to Customer. Cooperative Supply Chain Cooperative Supply Chain is the upstream and downstream relationships with Farmer to Cooperative unit to Retail format to Customer. Modern Supply Chain Modern Supply Chain is the upstream and downstream relationships with Farmer/Supplier to Consolidation centre to Retail format to Customer. Market intermediaries Market intermediaries are those individual who performs various marketing functions, involved in purchase and sale of goods and move goods from producers to consumer. Producers net price This refers to the price per unit that farmers realises after deducting the marketing costs from the gross price. Commission agents net returns It is the difference between commission agent gross returns and total marketing cost incurred by commission agent. Wholesalers net returns It is the difference between wholesaler gross returns and total marketing cost incurred by wholesaler. Retail formats net returns It is the difference between retail format gross returns and total marketing cost incurred by retail format. Marketing margin This refers to the net profit to the different market intermediaries of a particular produce after deducting costs incurred by them for handling the commodity. Producers share in the consumer rupee This refers to the farmers net price to the retail price of the produce expressed in percentage. Price spread This refers to the difference between the net price received by the farmer and the price paid by the consumer for the produce. Price spread= Consumer price Producer price Marketing efficiency index The ratio of the net price received by the production-seller to the total marketing cost and total net margins of intermediaries as suggested by Acharya and Agarwal (1998). FP ME = ------------MC+ MM Where, ME FP MC MM : : : : Marketing efficiency Net price received by the producer-seller Total marketing cost Net marketing margin

Aggregate average It is the respective total value of the four vegetables divided by number of vegetables i.e., four vegetables.

Fig.1: Area map of the Bangalore city

4. RESULTS
The results of the analysis carried out for fulfilling the objectives of the study are presented under the following heads. 4.1 4.2 Comparative roles played by the intermediaries as the traditional format as well as contracting firms in the different formats of the supply chain. Marketing efficiency of different formats in the supply chain 4.2.1 Packing materials used in the supply chain 4.2.2 Physical losses in the supply chain 4.2.3 Cost incurred in the supply chain 4.2.4 Cost and return in the supply chain 4.2.5 Marketing efficiency of vegetable marketing in the supply chain 4.3 Factors influencing the effectiveness of the supply chain 4.3.1 Disposal pattern and reasons for sale of the vegetables to a particular formats by the farmers in the supply chain. 4.3.2 Pattern of purchases, buying management and sales pattern by different formats in the supply chain 4.3.3 Buying pattern and reasons for buying vegetables from a particular formats by the consumers in the supply chain. 4.4 4.5 Comparison of price received by the farmers vis--vis price paid by the consumers. Problems and expectations of farmers retail formats and consumers in the supply chain. 4.5.1 Problems faced by farmers in selling vegetables to different formats in the supply chain and their expectations. 4.5.2 Problems faced by the retail outlets in marketing of vegetables in different formats of supply chain and their expectations. 4.5.3 Problems faced by consumers in buying vegetables in different formats of supply chain and their expectations.

4.1

Comparative roles played by the intermediaries and firms in the supply chain

In order to have a better understanding about the different roles played by the intermediaries in traditional, cooperative and modern formats is furnished in Table 4.1. It could be seen from the table that 75 per cent of the intermediaries in the traditional format provided an advice with respect to the time of planting and varieties to be planted. In case of cooperatives 100 per cent of them provided an advise with respect to the time of planting and the varieties to be planted. Whereas, it was only 25 per cent of the firms provided an advice with respect to the time of planting and varieties to be planted in the modern formats. In case of service, transport facility was not provided by the intermediaries in the traditional format. However, 100 per cent of transport facility was provided in the cooperative formats of the supply chain The grading service facility was provided to the extent of 50 per cent by intermediaries in the traditional format, 100 per cent in cooperative format and 25 per cent in modern formats of the supply chain. In case of assembling services, no assembling services was provided by the intermediaries in the traditional format, 100 per cent in cooperative format and 25 per cent in modern format of the supply chain. In packing services, 25 per cent packing services was provided in the traditional format by the intermediaries, 100 per cent was provided in cooperative format and modern format of the supply chain. Similarly in the storage services, 50 per cent storage service was provided in traditional formats by intermediaries, 100 per cent in cooperative format and modern format of the supply chain.

4.2

Marketing efficiency of different formats in the supply chain

4.2.1 Materials used for packing during the sales by the farmer in different formats
In the Table 4.2 it is presented that materials used for packing vegetables by different formats in the supply chain. In case of traditional format of the supply chain, except for tomato majority of the farmers about 100 per cent of them used the gunny bags for packing all other vegetables. Where as, 90 per cent of the farmers used plastic boxes for tomato. In the cooperative supply chain, in case of tomato, carrot and capsicum all the farmers that is 100 per cent of the farmers used plastic box to pack the vegetables but it was less that is 75 per cent in case of cabbage and only 25 per cent of them sold cabbage in loose form. In the modern supply chain, for all the vegetables such as tomato, cabbage, carrot and capsicum, 100 per cent of the farmers used the plastic boxes as the packing material to sell the vegetables.

4.2.2 Physical losses in the supply chain


4.2.2.1 Physical losses at the wholesaler level in the traditional supply chain The estimation of physical loss at the wholesaler level in the traditional supply chain is presented in Table 4.3. This indicated that on an average, the quantity handled per day was 2650 kg of which 150 kg was lost per day in the process of marketing and the total value of loss was accounted for Rs. 1292.18 per day. Quantity loss per kg of quantity handled at aggregate average level was 0.063 kg and total loss was Rs. 0.59 per kg of quantity handled. The percentage of wastage to the total quantity procured was 6.34 percent. The physical losses occurred at the wholesaler level in traditional format of supply chain and not in other formats because no intermediary involved in those formats of supply chain. 4.2.2.2 Physical losses at the traditional retail format level in the supply chain The loss at retail format level in traditional supply chain was assessed by taking five traditional retail outlets of the formats in the study area. Table 4.4 indicates that on an aggregate average, the total quantity handled was 11.47 kg per day. For the total quantity handled the loss was 1.16 kg per day and its value was found out to be Rs. 10.65. The quantity loss per Kg of quantity handled at aggregate level was 0.1232 kg and its value was found to be Rs. 1.37 per kg. Finally, the percentage of wastage to the total quantity handled was 12.28 percent. 4.2.2.3 Physical losses at the cooperative retail format level in the supply chain Table 4.5 indicates that the physical losses at the cooperative retail format level was assessed by considering the Safal retail outlet and Hopcoms retail outlets comprising totally 5 outlets. On an aggregate average the quantity handled per day was 40.65 kg, of which 3.40 kg was lost in the process of marketing and the total value of loss was Rs. 22.87 per day. Quantity loss per kg of the quantity handled was 0.09 kg and the total value of loss per kg was Rs. 0.68 and it accounts for 9.08 percent to the total quantity procured. 4.2.2.4 Physical losses at the modern retail format level in the supply chain The loss at the modern retail format level was assessed by taking the retail outlets of Subhiksha, Namdhari, Spencer, Reliance and Fabmall outlets in the study area the Table 4.6 indicates that on an aggregate average the quantity handled per day by them was 20.10 kg per day. At the retail outlet level the loss was 1.39 kg per day and the value of the quantity loss accounted for Rs. 12.84 per day. Quantity loss in terms of per kg of vegetable handled was 0.07 kg and the total value of loss per kg was Rs. 0.69. The percentage of wastage to the total quantity procured was 7.27 percent. 4.2.2.5 Physical losses at different levels in the supply chain of different formats Table 4.7 reveals the physical loss in an aggregate level at intermediaries level and at retailer levels in the Traditional format, Cooperative and Modern formats in the supply chain. On an average quantity handled was highest in Traditional format that is 2661.47 kg per day and total quantity loss per day of 151.16 Kg and percentage of wastage to the total quantity procured is 18.62 per cent which was found out to be higher compared to all other farmats.

Table 4.1: Functions performed by the intermediaries in Traditional as well as the Contracting firms in the different formats of the Supply Chain of Vegetable marketing Supply chain formats Sl N o Particulars of functions performed Traditional (n=4) Number of intermediaries provide service Advisory functions about The time of planting Varieties to be planted 3 3 75 75 4 4 100 100 1 1 25 25 Percentage to total Number of intermediaries Cooperative (n=4) Number of firms Provide service Percentage to total Number of firms Modern (n=4) Number of firms provide service Percentage to total Number of firms

Services provided Provides the transport facility Grading facilities provided at the farm level Assembling Services Packing Services Storage Services 1 2 2 50 4 4 100 100 1 1 25 25

25 50

4 4 4

100 100 100

1 4 4

25 100 100

Table 4.2: Material used for packing during the sales by the farmers in the different formats in the Supply chain in Vegetable Marketing Traditional Sl No Vegetable Units Gunny Bag (n=20) Loose Wooden box Plastic Box Gunny Bag Cooperative (n=20) Loose Wooden box Plastic Box Gunny Bag Loose Modern (n=5) Wooden box Plastic Box

Tomato

Percentag e Percentag e Percentag e Percentag e

10

90

100

100

Cabbage

100

25

75

100

Carrot

100

100

100

Capsicum

100

100

100

Table 4.3: Physical losses at the Wholesaler level in the Traditional supply chain

Name of the Vegetables

Quantity Loss Per Kg ( in Kg)

Total Quantity handled per day(Kg)

Total Quantity of loss Per day (Kg)

Percentage of wastage to the total quantity handled

Procurement Price ( Rs per Kg)

Total Value of loss (Rs)

Total Value of loss / Kg (Rs)

Tomato

0.0545

2750.00

150.00

5.45

6.50

975.00

0.35

Cabbage

0.0320

3900.00

125.00

3.20

4.75

593.75

0.15

Carrot

0.0784

2550.00

200.00

7.80

10.50

2100.00

0.82

Capsicum

0.0892

1400.00

125.00

8.92

12.00

1500.00

1.07

Aggregate average

0.063

2650.00

150.00

6.34

8.43

1292.18

0.59

Table 4.4: Physical losses at the retail format level in the Traditional supply chain

Name of the Vegetables

Quantity Loss Per Kg ( in Kg)

Total Quantity handled per day (Kg)

Total Quantity of loss Per day (Kg)

Percentage of Wastage to the total quantity handled

Procurement Price ( Rs per Kg)

Total Value of loss (Rs)

Total Value of loss / Kg (Rs)

Tomato Cabbage Carrot Capsicum Aggregate average

0.0692 0.1500 0.1357 0.1379 0.1232

26.00 10.00 7.00 2.90 11.47

1.80 1.50 0.95 0.40 1.16

6.92 15.00 13.57 13.70 12.28

8.00 6.00 13.50 16.00 10.87

14.40 9.00 12.82 6.40 10.65

0.55 0.90 1.83 2.20 1.37

Table 4.5: Physical losses at the retail format level in the Cooperative supply chain

Name of the Vegetables

Quantity Loss Per Kg ( in Kg)

Total Quantity handled per day (Kg)

Total Quantity of loss Per day (Kg)

Percentage of Wastage to the total quantity handled

Procurement Price ( Rs per Kg)

Total Value of loss (Rs) 44.80 13.72 15.07 17.92 22.84

Total Value of loss / Kg (Rs) 0.46 0.45 0.70 1.14 0.68

Tomato Cabbage Carrot Capsicum Aggregate average

0.072 0.116 0.070 0.102 0.090

96.00 30.00 21.00 15.60 40.65

7.00 3.50 1.50 1.60 3.40

7.29 11.66 7.14 10.25 9.08

6.40 3.92 10.05 11.20 7.89

This followed by Cooperative format which handled daily 40.65 Kg accounted a loss per day was 3.40 Kg. Similarly in modern format, handling daily 20.10 Kg of vegetables with a quantity loss of 1.39 Kg per day and accounted the wastage to the total quantity procured was 7.27 per cent. Hence less physical loss of produce occurred at modern supply chain and found to be more profitable followed by Cooperatives in the supply chain.

4.2.3 Cost incurred in the supply chain


4.2.3.1 Cost of marketing vegetables by farmers in traditional supply chain The cost of marketing of vegetables per day per farmer in traditional supply chain is presented in Table 4.8. In the traditional supply chain, the total cost of marketing of one quintal of vegetables at an aggregate average was worked out to be Rs. 116.96 and the cost of marketing per kg per farmer was Rs. 1.6. Among aggregate average cost of marketing of vegetables, the cost of commission charge was higher and it was Rs. 54.14 per quintals, which was followed by transportation cost, packaging charges, loading and unloading charges and labour charges for cleaning at farm level, accounting for Rs. 27.69, Rs. 23.85, Rs. 9.57 and Rs.1.70 per quintal respectively. 4.2.3.2 Cost of marketing vegetables by farmers in cooperative supply chain The cost of marketing of vegetables per day per farmer in cooperative supply chain is presented in Table 4.9. In the cooperative supply chain, the total cost of marketing of one quintal of vegetables at an aggregate average was worked out to be Rs. 83.57 and the cost of marketing per kg per farmer was Rs. 0.83. Among aggregate average cost of marketing of vegetables, the service charges accounted for a maximum in the total marketing cost and it was Rs. 39.46 per quintal, which was followed by transportation cost, packaging charges and labour charges for cleaning at farm level, accounting for Rs. 25.03, Rs. 17.77 and Rs. 1.30 per quintal respectively. 4.2.3.3 Cost of marketing vegetables by farmer in modern supply chain The cost of marketing vegetables per day per farmer in modern supply chain is presented in Table 4.10. In the modern supply chain, the total marketing cost of one quintal of vegetables at an aggregate average worked out to be Rs. 42.86 and the cost of marketing per kg per farmer was Rs. 0.46. Among aggregate average cost of marketing of vegetables, the cost of commission charges was nil and the cost of transportation cost was higher and it was Rs. 23.96 per quintal, which was followed by packaging charges and labour charges for cleaning at farm level, accounting for Rs. 17.80 and Rs. 21.09 per quintal respectively. 4.2.3.4 Aggregate average cost of marketing vegetables by farmers per day per farmer under different formats of supply chain Aggregate average cost of marketing vegetable is presented in Table 4.11. Among the costs incurred by the farmers, the major component was found to be commission charges in the traditional and cooperative supply chain except in modern supply chain. The marketing cost was found out to be lower for the farmers in marketing of vegetables in the modern format. Among the items of costs, transportation cost and packaging charges were found out to be a next major component in all the supply chain in the cost components. Highest marketing cost was incurred by farmers in traditional format of supply chain as compared to cooperative and modern supply chain.

4.2.4 Cost and return in the supply chain


4.2.4.1 Cost and return in vegetable marketing by commission agent in the traditional supply chain The cost and return incurred in the marketing of vegetable per day by various intermediaries like commission agent were worked out and are presented in Table 4.12.

Table 4.6: Physical losses at the retail format level in the Modern supply chain

Name of the Vegetables

Quantity Loss Per Kg ( in Kg)

Total Quantity handled per day (Kg)

Total Quantity of loss Per day (Kg)

Percentage of Wastage to the total quantity handled

Procurement Price ( Rs per Kg)

Total Value of loss (Rs)

Total Value of loss / Kg (Rs)

Tomato Cabbage Carrot Capsicum Aggregate average

0.07 0.09 0.03 0.09 0.07

38.00 12.80 18.60 11.00 20.10

2.70 1.20 0.66 1.00 1.39

7.10 9.37 3.54 9.09 7.27

7.90 5.95 12.90 14.40 10.28

21.33 7.14 8.51 14.40 12.84

0.56 0.53 0. 38 1.29 0.69

Table 4.7: Physical loss at different levels in the supply chain of different formats Wholesaler level Retailer level Aggregate

Supply chain format

Quantity Loss Per Kg ( in Kg)

Total Quantity handled per day (Kg)

Total Quantity of loss Per day (Kg)

Percentage of Wastage to the total quantity Handled

Quantity Loss Per Kg ( in Kg)

Total Quantity handled per day (Kg)

Total Quantity of loss Per day (Kg)

Percentage of Wastage to the total quantity handled

Quantity Loss Per Kg ( in Kg)

Total Quantity handled per day (Kg)

Total Quantity of loss Per day (Kg)

Percentage of Wastage to the total quantity handled

Traditional Cooperative Modern

0.063 -

2650.00 -

150.00 -

6.34 -

0.1232 0.090 0.07

11.47 40.65 20.10

1.16 3.40 1.39

12.28 9.08 7.27

0.186 0.090 0.070

2661.47 40.65 20.10

151.16 3.40 1.39

18.62 9.08 7.27

Table 4.8: Cost of Marketing Vegetables by farmers per day per farmer in Traditional supply chain

Sl No

Particular Tomato Cabbage 30.25 3.25 325.00 9831.25 22.50 31.48 26.00 10.00

Vegetables Carrot 20.40 9.22 922.50 18819.00 20.00 32.97 73.86 8.00 Capsicum 7.62 9.50 950.00 7239.00 24.90 19.73 76.00 13.28 Aggregate average 18.48 6.76 676.62 10963.77 23.85 27.69 54.14

1 2 3 4 5 6 7 8

Qty sold (qtls) Price received (Rs per Kg) Price received (Rs per qtl) Total value (Rs) Packaging charge (Rs per qtl) Transportation cost (Rs.per qtl) Commission @ 8% (Rs per qtl) Loading and Unloading charges (Rs per qtl)

15.65 5.09 509.00 7965.85 28.00 26.58 40.72 7.00

9.57

Labour charges for cleaning at farm level (Rs per qtl)

1.25

2.89

1.95

0.73

1.70 116.96 1.16

10 11

Total Cost (Rs per qtl) Cost of marketing per Kg per farmer (Rs)

103.55 1.03

92.87 0.92

136.78 1.36

134.64 1.34

Table 4.9: Cost of Marketing Vegetables by farmers per day per farmer in Cooperative supply chain

Sl No

Vegetables Particular Tomato Cabbage Carrot Capsicum Aggregate average 17.33 7.89 789.31 11030.00 17.77 25.03 39.46 1.30 83.57 0.83

1 2 3 4 5 6 7 8 9 10

Qty sold (qtls) Price received (Rs per Kg) Price received (Rs per qtl) Total value (Rs) Packaging charge (Rs per qtl) Transportation cost (Rs. per qtl) Service charge @ 5% (Rs Per qtl) Labour charges for cleaning at farm level (Rs) Total Cost (Rs per qtl) Cost of marketing per Kg per farmer (Rs)

26.90 6.40 640.00 17216.00 12.00 28.47 32.00 2.03 74.50 0.74

26.80 3.92 392.25 10512.3 19.50 31.18 19.61 2.02 72.31 0.72

9.85 10.05 1005.00 9899.25 18.60 23.26 50.25 0.74 92.85 0.92

5.80 11.20 1120.00 6496.00 21.00 17.22 56.00 0.43 94.65 0.94

Table 4.10: Cost of Marketing Vegetables by farmers per day per farmer in Modern supply chain

Sl No

Vegetables Particular Tomato Cabbage Carrot Capsicum Aggregate average 7.33 8.70 870.00 5229.90 17.80 23.96 1.09 42.86 0.42

1 2 3 4 5 6 7 8 9 10

Qty sold (qtls) Price received (Rs per Kg) Price received (Rs per qtl) Total value (Rs) Packaging charge (Rs per qtl) Transportation cost (Rs. per qtl) Commission (Rs Per qtl) Labour charges for cleaning at farm level (Rs per qtl) Total Cost (Rs per qtl) Cost of marketing per Kg per farmer (Rs)

14.00 7.00 700.00 9800.00 13.00 22.32 1.44 36.76 0.36

11.00 5.90 590.00 6490.00 18.00 30.05 1.50 49.55 0.49

3.60 10.60 1060.00 3816.00 19.40 24.50 0.90 44.80 0.44

0.72 11.30 1130.00 813.60 20.80 19.00 0.54 40.34 0.40

Table 4.11: Aggregate average cost of marketing Vegetables by farmers per day per farmer under different supply chain

Sl No

Supply chain format Particular Traditional 18.48 6.76 676.62 10963.77 23.85 27.69 54.14 9.57 1.70 116.96 1.16 Cooperative 17.33 7.89 789.31 11030.00 17.77 25.03 39.46 1.30 83.57 0.83 Modern 7.33 8.70 870.00 5229.90 17.80 23.96 1.09 42.86 0.42

1 2 3 4 5 6 7 8 9 10 11

Qty sold (qtls) Price received (Rs per Kg) Price received (Rs per qtl) Total value (Rs) Packaging charge (Rs per qtl) Transportation cost (Rs.per qtl) Commission/service charge (Rs per qtl) Loading and Unloading charges (Rs per qtl) Labour charges for cleaning at farm level (Rs per qtl) Total Cost (Rs per qtl) Cost of marketing per Kg per farmer (Rs)

The aggregate average quantity of vegetables handled by the commission agent per day was 77 quintals. As a commission agent, they arrange for the sale of farmers produce and receive commission after the sale of farmers produce. The commission received would become income to the commission agents. Hence, the returns per quintal per day by commission for the quantity handled were Rs. 67.50. The costs incurred by the commission agents were however found out to be Rs. 11.75 per quintal which included the cost like market fee, license fee, shop rent, electricity maintenance charges, casual and temporary labour charges and interest on own capital and borrowed capital. These accounted for Rs. 0.0013, Rs. 0.003925, Rs. 1.89, Rs. 1.57, Rs. 0.02657, Rs. 5.72 and Rs. 0.69 and Rs. 1.85 per quintal respectively. Hence, the net return obtained by the commission agent was Rs. 55.74 per quintal per day. 4.2.4.2 Cost and return in vegetable marketing by wholesaler in the traditional supply chain The cost and return accrueded in the marketing of vegetable per day by various intermediaries in the traditional supply chain at wholesaler was worked out and are presented in Table 4.13. The aggregate average quantity of vegetables handled by the wholesaler per day was 26.50 quintals. The average purchase price of wholesaler per quintal was Rs. 843.75 and sale price per quintal was Rs. 1087.50. Hence, the total returns per quintal was Rs. 165.84. The cost incurred by the wholesaler, however found out to be Rs. 66.91 per quintal. This included the costs of market fee, licence fee, shop rent, electricity, maintenance charges, interest on capital invested and total value spoiled during marketing. These items accounted for RS. 0.00062, Rs.0.0021, Rs. 1.25, Rs. 0.27, Rs. 1.13, Rs. 2.85 and Rs. 60.04 per quintal respectively. Hence, the net returns obtained by wholesaler was Rs. 98.92 per quintal per day. 4.2.4.3 Cost and return in vegetable marketing by traditional retail format Table 4.14 reflects the cost and return associated with the marketing of vegetables per day in case of traditional retail format. It could be seen that the total cost of marketing on an average at aggregate level was worked out to be Rs. 1.63 per kg per day. The total returns per kg per day for the traditional retail format was worked out to be Rs. 2.27 for the quantity handled per day that is 11.47 kg and purchased the vegetables at a price of Rs. 10.87 per kg and it was purchased from the wholesalers. The quantity sold however was in the range 10.31 kg per day and the selling price was Rs.15.07 per kg. The net returns per kg realized by the traditional retail format was Rs. 0.633 per kg. 4.2.4.4 Cost and return in vegetable marketing by cooperative retail format Table 4.15 relates to the cost and return of the cooperative retail format in marketing of the vegetables per day. For the study five cooperative retail format from HOPCOMS and Safal was selected. At the aggregate average, the quantity handled and purchase price of vegetables in cooperative retail format was 40.65 kg per day and Rs. 7.89 per kg respectively. The total marketing cost and total returns were in the order of Rs. 1.01 per kg and Rs. 2.94 per kg respectively for the total quantity sold that is 37.50 kg per day. The selling price at retail level on aggregate level was Rs. 12.00 per kg. The net returns was worked out to be Rs. 1.90 per kg. 4.2.4.5 Cost and returns in vegetable marketing by modern retail format Table 4.16 reflects the cost and returns associated with the marketing of vegetables per day of modern retail formats. For the study Namdhari, Subhiksha, Spencer, Fabmall and Reliance retail formats were selected. On an aggregate average, the modern retail format, the quantity handled was 20.1 kg per day. The purchase price per kg was Rs. 10.30. However, the quantity sold was 18.88 kg per day and the selling price was Rs. 12.80 per kg per day. Hence, the total marketing cost was worked out to be 0.80 per kg which included the shop rent, transportation cost, packing cost, electricity, value of commodity spoiled during marketing, maintenance charges and labour charges. The total returns per kg was worked out to be Rs. 1.58. The modern retail formats on an aggregate average earned a net return of Rs. 0.79 per kg of vegetables.

Table 4.12: Cost and returns in Vegetable marketing by Commission agent in Traditional Supply chain (Per day / Commission agent) Sl No I 1 2 3 4 5 II 6 7 8 9 10 11 12 13 14 III Particular Vegetables Aggregate average 77.00 843.75 54581.25 4366.50 67.50 0.0013 0.003925 1.89 1.57 0.02675 5.72 0.69 1.85 11.75 55.74

Returns Qty handled (qtls) Average sale price (Rs per qtl) Total sale value(Rs) Total Commission received @ 8% (Rs) Total Returns (Rs per qtl) Marketing costs Market fee (Rs per qtl) License fee (Rs per qtl) Shop rent (Rs per qtl) Electricity (Rs per qtl) Maintenance charges (Rs per qtl) Casual and temporary labour charges (Rs per qtl) Interest on own capital (Rs per qtl) Interest on borrowed capital (Rs per qtl) Total cost of Marketing (Rs per qtl) (Item No. 6 to Item No. 13) Net returns (Rs per qtl)

Tomato 95.00 650.00 67750.00 4940.00 52.00 0.0013 0.0039 2.70 2.40 0.028 6.08 1.00 2.20 14.41 37.59

Cabbage 125.00 475.00 59375.00 4750.00 38.00 0.0015 0.0045 3.09 2.70 0.052 8.00 1.20 2.92 17.96 20.03

Carrot 56.00 1050.00 58800.00 4704.00 84.00 0.0018 0.0055 1.33 1.02 0.018 5.50 0.37 1.27 9.51 74.48

Capsicum 32.00 1200.00 38400.00 3072.00 96.00 0.0006 0.0018 0.44 0.18 0.009 3.30 0.19 1.02 5.14 90.85

Table 4.13: Cost and returns in Vegetable marketing by Wholesaler in Traditional Supply chain Sl No I 1 2 3 4 5 6 7 8 II 9 10 11 12 13 14 15 16 III Particular Vegetables Aggregate average 26.50 843.75 19993.75 25.00 1087.50 23893.75 3900.00 165.84 0.00062 0.0021 1.25 0.27 1.13 2.85 60.04 66.91 98.92

Returns Qty handled (qtls) Average purchase price (Rs per qtl) Total purchase value (Rs) Qty sold (qtls) Average sale price (Rs per qtl) Total sale value (Rs) Total returns per day (Rs) Total Returns (Rs per qtl ) Marketing costs Market fee (Rs Per qtl) License fee (Rs Per qtl) Shop rent (Rs Per qtl) Electricity (Rs Per qtl) Maintenance charges (Rs Per qtl) Interest on capital invested (Rs Per qtl) Total value spoiled during marketing (Rs Per qtl) Total cost of Marketing (Rs per qtl) (Item No. 9 to Item No. 15) Net returns (Rs per qtl)

Tomato 27.50 650.00 17875.00 26.00 800.00 20800.00 2925.00 106.36 0.0011 0.0024 2.29 1.41 0.71 3.16 35.45 43.02 63.33

Cabbage 39.00 475.00 18525.00 37.75 600.00 22650.00 4125.00 105.76 0.0007 0.0038 2.58 1.28 0.88 4.21 15.22 24.17 81.59

Carrot 25.50 1050.00 26775.00 23.50 1350.00 31725.00 4950.00 194.11 0.0006 0.002 2.22 1.23 0.66 2.78 82.35 89.24 104.87

Capsicum 14.00 1200.00 16800.00 12.75 1600.00 20400.00 3600.00 257.14 0.0001 0.0004 1.91 0.86 0.068 1.26 107.14 111.23 145.90

(Per day / Wholesaler)

Table 4.14: Cost and returns in Vegetable marketing by retail format in Traditional supply chain (Per day / Traditional retail format) Sl No I 1 2 3 4 5 6 7 8 II 9 10 11 12 13 14 15 16 III Particular Tomato Returns Qty handled (Kg) Average purchase price (Rs per Kg) Total purchase value (Rs) Qty sold (Kg) Retailers Price (Rs Per Kg) Average sale value (Rs) Total Returns per day (Rs) Total Returns (Rs per Kg) Marketing Costs Shop rent (Rs per Kg) Transportation cost (Rs per Kg) Packing cost (Rs per Kg) Electricity (Rs per Kg) Establishment charges (Rs per Kg) Total Value spoiled during marketing (Rs per Kg) Labour Charges (Rs per Kg) Total cost (Rs per Kg) Net returns (Rs per Kg) 26.00 8.00 208.00 24.20 10.00 242.00 34.00 1.30 0.031 0.370 0.220 0.015 0.010 0.550 0.006 1.190 0.110 10.00 6.00 60.00 8.50 9.20 78.20 18.20 1.82 0.012 0.140 0.080 0.006 0.003 0.900 0.0029 1.140 0.677 7.00 13.50 94.50 6.05 18.60 112.53 18.036 2.50 0.009 0.090 0.056 0.0027 0.002 1.800 0.0022 1.950 0.618 2.90 16.00 46.40 2.50 22.50 56.25 9.85 3.40 0.003 0.040 0.023 0.0011 0.001 2.200 0.0009 2.260 1.129 Cabbage Vegetables Carrot Capsicum Aggregate average 11.47 10.87 102.22 10.31 15.07 122.24 20.02 2.27 0.137 0.160 0.094 0.006 0.004 1.260 0.003 1.635 0.633

Table 4.15: Cost and returns in Vegetable marketing by retail format in Cooperative supply chain (Per/ day ooperative retail format) Sl No I 1 2 3 4 5 6 7 8 II 9 10 11 12 13 14 15 16 17 III Particular Vegetables Aggregate average 40.65 7.89 279.44 37.50 12.00 375.50 96.05 2.94 0.0705 0.0765 0.0745 0.036 0.016 0.650 0.013 0.079 1.010 1.900

Returns Qty handled (Kg) Average purchase price (Rs per Kg) Total purchase value (Rs) Qty sold (Kg) Retailers Price (Rs Per Kg) Average sale value (Rs) Total Returns per day (Rs) Total Returns (Rs per Kg) Marketing Costs Shop rent (Rs per Kg) Transportation cost (Rs per Kg) Packing cost (Rs per Kg) Electricity (Rs per Kg) Establishment charges (Rs per Kg) Total Value spoiled during marketing (Rs per Kg) Maintenance charges (Rs per Kg) Labour Charges (Rs per Kg) Total cost (Rs per Kg) Net returns (Rs per Kg)

Tomato 96.00 6.40 614.40 89.00 8.80 783.20 168.80 1.75 0.31 0.77 0.22 0.086 0.038 0.460 0.030 0.200 1.384 0.370

Cabbage 30.00 3.92 117.60 27.50 6.40 176.00 58.40 1.94 0.053 0.056 0.070 0.027 0.013 0.320 0.010 0.060 0.608 1.330

Carrot 21.00 10.05 211.05 19.50 15.20 296.40 85.35 3.60 0.037 0.20 0.005 0.019 0.0083 0.710 0.0072 0.042 0.861 2.70

Capsicum 15.60 11.20 174.72 14.00 17.60 246.40 71.68 4.50 0.020 0.08 0.003 0.015 0.0061 1.140 0.0055 0.014 1.230 3.200

Table 4.16: Cost and returns in Vegetable marketing by retail format in Modern supply chain (Per day / Modern retail format) Sl No. I 1 2 3 4 5 6 7 8 II 9 10 11 12 13 14 15 16 III Particular Returns Qty handled (Kg) Average purchase price (Rs per Kg) Total purchase value (Rs) Qty sold (Kg) Retailers Price (Rs Per Kg ) Average sale value (Rs) Total Returns per day (Rs) Total Returns (Rs per Kg) Marketing Costs Shop rent (Rs per Kg) Transportation cost (Rs per Kg) Packing cost (Rs per Kg) Electricity (Rs per Kg) Total Value spoiled during marketing (Rs per Kg ) Maintenance charges (Rs per Kg) Labour Charges (Rs per Kg) Total cost (Rs per Kg) Net returns (Rs per Kg) Tomato 38 7.9 300.20 36.30 9.00 326.80 26.60 0.70 0.059 0.080 0.050 0.060 0.350 0.0018 0.013 0.610 0.090 Cabbage 12.8 5.95 75.52 11.60 7.20 83.52 8.00 0.625 0.019 0.0110 0.006 0.025 0.557 0.0006 0.0046 0.610 0.030 Vegetables Carrot 18.6 12.9 239.94 17.64 16.40 289.20 49.26 2.64 0.028 0.020 0.023 0.032 0.660 0.0008 0.0062 0.770 1.870 Capsicum 11 14.45 158.95 10.00 18.60 186.00 27.05 2.40 0.016 0.010 0.013 0.022 1.130 0.0005 0.003 1.200 1.200 Aggregate average 20.1 10.3 193.65 18.88 12.80 221.38 27.72 1.58 0.0305 0.0302 0.0230 0.0340 0.6700 0.0009 0.0060 0.800 0.790

4.2.4.6 Aggregate average cost and returns in vegetable marketing under different formats in supply chain Table 4.17 reveals that per kg cost and returns in traditional retail format, cooperative retail format and modern retail format. The cost incurred per kg of vegetables by traditional, cooperative and modern retail format was found out to be Rs. 1.635, Rs. 1.01 and Rs. 0.80 respectively. Similarly, total returns per kg of vegetables found out to be Rs. 2.27, Rs. 2.94 and Rs. 1.58. In the traditional, cooperative and modern retail format respectively. But the net return realized by it for one kg of vegetables was Rs. 0.633, Rs. 1.90 and Rs. 0.79 in traditional, cooperative and modern retail format respectively. Hence, the highest marketing cost was incurred by traditional retail format which followed by cooperative and modern supply chain. From the above data it is clear that higher total returns and net returns were found in cooperative retail format as compared to other formats. But, due to less cost incurred by the modern retail format is the next highest beneficiary with high net returns than the traditional retail format.

4.2.5 Marketing efficiency of different formats in the supply chain


It is observed from the Table 4.18 that marketing margins as percentage to consumer was found to be less in cooperative supply chain (3.20%) when compared to traditional supply chain (4.40%) and modern supply chain (6.30%). Similarly, the producer share in the consumer rupee was highest in modern supply chain that is 64.68 per cent of consumer net price and lowest in the traditional supply chain 37.15 per cent and in cooperative supply chain it is 58.83 per cent of the consumer price. The index of marketing efficiency of the different formats indicated that modern supply chain was found to be more efficient than cooperative and traditional supply chain. The index of marketing efficiency was found out to be 1.97, 2.10 and 4.32 for traditional, cooperative and modern supply chain respectively.

4.3

Factors influencing the effectiveness in the supply chain

4.3.1 Disposal pattern and reasons for sale of the vegetables to a particular format by the farmers in the supply chain
4.3.1.1 Disposal pattern of produce by the farmers in the supply chain In the Table 4.19 quantity sold per farmer in different formats of the supply chain is presented and it was found out that highest quantity was sold in traditional supply chain that is 18.48 kg followed by cooperative and modern supply chain that is 17.33 kg and 7.33 kg respectively. In case of frequency of sale of vegetables by farmers in traditional, cooperative and modern is also presented in the Table 4.19. It is seen from the table that in traditional supply chain, vegetables like tomato 75 per cent of farmers sold 2-3 days in a week and remaining 25 per cent were sold 3-4 days once in a week. Whereas in cabbage 80 per cent of them sold 2-3 days once in a week and remaining 20 per cent sold 3-4 days once in a week. In case of carrot 100 per cent of farmers sold only once and capsicum was sold once a week only. In case of cooperative supply chain tomato was sold by 75 per cent of the farmer and 25 per cent of farmers sold daily and 2-3 days once in a week. In cabbage 50 per cent of them sold daily and remaining 50 per cent sold 2-3 days once, in carrot 75 per cent of them sold daily and remaining 25 per cent sold 2-3 days once, but 100 per cent of farmers sold daily in case of capsicum. In the modern supply chain all the 100 per cent of farmers sold daily for all the vegetables that is tomato, cabbage, carrot and capsicum. When compare the price per kg received by farmer in traditional, cooperative and modern supply chain, it was very high in modern format of the supply chain that is Rs. 8.70 per kg and it was very low in traditional supply chain that is Rs. 6.76 per kg, where as it was Rs. 7.89 in case of cooperative format of supply chain.

Table 4.17: Aggregate average cost and returns in Vegetable marketing under different formats in supply chain Sl No I 1 2 3 4 5 6 7 8 II 9 10 11 12 13 14 15 16 17 III Particular Traditional Returns Qty handled (Kg) Average purchase price (Rs per Kg) Total purchase value (Rs) Qty sold (Kg) Retailers Price (Rs Per Kg ) Average sale value (Rs) Total Returns per day (Rs) Total Returns (Rs per Kg) Marketing Cost Shop rent (Rs per Kg) Transportation cost (Rs per Kg) Packing cost (Rs per Kg) Electricity (Rs per Kg) Establishment charges (Rs per Kg) Total Value spoiled during marketing (Rs per Kg) Maintenance charges (Rs per Kg) Labour Charges (Rs per Kg) Total cost (Rs per Kg) Net returns (Rs per Kg) 11.47 10.87 102.22 10.31 15.07 122.24 20.02 2.27 0.137 0.160 0.094 0.006 0.004 1.260 0.003 1.635 0.633 40.65 7.89 279.44 37.50 12.00 375.50 96.05 2.94 0.0705 0.0765 0.0745 0.036 0.016 0.650 0.013 0.079 1.010 1.900 20.1 10.3 193.65 18.88 12.80 221.38 27.72 1.58 0.0305 0.0302 0.0230 0.0340 0.6700 0.0009 0.0060 0.800 0.790 Supply chain format Cooperative Modern

Table 4.18: Marketing costs, Marketing margins and Producers share in Consumers rupee under different formats in the supply chain (Rs / Kg) Modern 8.70 0.42 8.28

Sl No 1 2 3

Particulars Gross price received by farmer (Rs.per kg) Cost incurred by farmer (Rs per kg) Producers net price (Rs per kg) (Item No.1 Item No.2)

Traditional 6.76 1.16 5.60

Cooperative 7.89 0.83 7.06

4 5 6 7

Cost incurred by different retail format (Rs per kg) Consumers price (Rs per kg) Profit of different retail format (Rs per kg) Total gross marketing margin (Rs per kg) (Item No. 2+4+6)

1.63 15.07 0.63 3.42

1.01 12.00 1.90 3.74

0.80 12.50 0.79 2.01

8 9

Marketing margin as percentage of consumers price (Item No. 5 over 7 ) Producers share in Consumers rupee (Percentage of producer net price to Consumers price)

4.40 37.15

3.20 58.83

6.30 64.68

10

Index of Marketing efficiency (Item No. 1 over 7)

1.97

2.10

4.32

Similarly, when compared the total value of the commodity sold by farmers at aggregate average, highest was in case of cooperative supply chain that is Rs. 11030.00 and it was very low in modern supply chain that is Rs. 3229.90 and it was Rs. 10963.77 in case of traditional supply chain. 4.3.1.2 Reasons for the sale of produce by farmers to particular formats in the supply chain Proximity, less charges for the service, less physical loss, better service rendered by them, provision for technical guidance, getting storage and transport facility by them, absence of middle men, spot payment, remunerative price, correct weight and less charges were the reasons which influenced the farmers to sell the vegetables to particular format (Table 4.20). In case of traditional supply chain, the number of farmers were influenced much to reasons like spot payment 20 (100.00%), correct weight 17 (85.00%), proximity 13 (65.00%) and remunerative price 12 (60.00%) and number of farmers were influenced less to reasons like better service rendered by them 10 (50.00%), less charges 9 (45.00%), less charges for the service 8 (40.00%), less physical loss 6 (30.00%), getting storage and transport facility by them 4 (20.00%), provision for technical guidance 1 (5.00%). In cooperative supply chain, the number of farmers were influenced much to reasons like absence of middlemen 20 (100.00%), spot payment (100.00%), correct weight 20 (100.00%), proximity 19 (95.00%), less charges 19 (95.00%), better service rendered by them 18 (90.00%), less charges 18 (90.00%), remunerative price 17 (85.00%), provision for technical guidance 16 (80.00%), less charges for the service 15 (75.00%), less physical loss 13 (65.00%) and getting storage and transport facility 12 (60.00%). In modern supply chain, the highest percentage of farmers were influenced to reasons like better service rendered by them (100.00%), provision for technical guidance 5 (100.00%), getting storage and transport facility 5 (100.00%), absence of middlemen 5 (100.00%), spot payment 5 (100.00%), correct weight 5 (100.00%), less charges 5 (100.00%), remunerative price 4 (80.00%), less charges for the service 4 (80.00%), less physical loss 4 (80.00%) and proximity 3 (60.00%).

4.3.2 Pattern of purchases, buying management and sales pattern by different formats in the supply chain
4.3.2.1 Pattern of purchases vegetables per day by different retail formats per day According to the Table 4.21 the quantity purchased per day by traditional, cooperative and modern retail format on an aggregate average was 13.35 kg, 40.65 kg and 20.10 kg respectively. The total value for the quantity they procured was Rs. 112.10, Rs. 279.42 and Rs. 193.65 in traditional, cooperative and modern retail formats respectively. Hence, in the pattern of purchase, the total quantity procured and total value realized was highest for cooperative retail format which followed by traditional retail format and modern retail format in the supply chain. 4.3.2.2 Buying management by firms in different formats of the supply chain In Table 4.22, comparative account on the buying activities of vegetables and the sources of procurement or the agency from whom they buy is presented. As vegetable which is perishable commodity, it was purchased daily, but even then in daily purchase the traditional, cooperative and modern supply chain followed different buying activities like in retail formats buy the same quantity every time i.e., 100 per cent in traditional retail format, 40 per cent in cooperative retail format and it was not followed in modern retail format. The retail format followed to buy based on previous days/weeks/months sale was by 20 per cent, 80 per cent and 100 per cent in case of traditional, cooperative and modern retail formats. The retail formats followed to buy based on coming days/weeks/months expected demand was highest in case of modern retail format that is 60 per cent and it was 20 per cent in cooperative retail formats and it was not followed in traditional retail format. Agency from whom the retail formats buy the vegetable is given, it was 100 per cent of traditional retail formats buy from intermediaries that is wholesalers and commission agents. In cooperative retail formats 100 per cent procurement was directly from the farmers

Table 4.19: Disposal pattern of produce by the farmers in supply chain Sl No Particular Vegetables

Supply chain I Quantity sold per farmer Traditional Cooperative Modern Traditional

Units Qtls Qtls Qtls Daily (Percentage) 2-3 Days once (Percentage) 3-4 Days once (Percentage) Only once (Percentage) Once a week (Percentage) Daily (Percentage) 2-3 Days once (Percentage) 3-4 Days once (Percentage) Once a week (Percentage) Daily (Percentage) 2-3 Days once (Percentage) 3-4 Days once (Percentage) Once a week (Percentage) Rs Rs Rs Rs Rs Rs

Tomato 25.70 26.90 14.00 75 25 75 25 100 6.69 6.40 7.00 10547.00 16822.50 9650

Cabbage 45.15 26.80 11.00 80 20 50 50 100 6.25 3.92 5.90 17782.50 9097.00 6520.00

Carrot 17.82 9.85 3.60 100 75 25 100 9.22 10.05 10.60 44207.50 10005.00 4160.00

Capsicum 13.00 5.80 0.72 100 100 100 9.50 11.20 11.30 7208.75 6457.50 832.00

Aggregate average 18.48 17.33 7.33

Frequency of sale

Cooperative

Modern

Price per Kg received

Total value of the commodity sold

Traditional Cooperative Modern Traditional Cooperative Modern

6.76 7.89 8.70 10963.77 11030.00 3229.90

Table 4.20: Reasons for sale of the produce by farmers to particular formats in the supply chain Supply chain Formats Sl No Reasons Traditional (n=20) Total Number of farmers 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Proximity Less charges for the service Less physical loss Better Service rendered by them Provision for technical guidance Getting storage and transport facility by them Absence of middlemen Spot payment Remunerative price Correct weight Less charges 13 8 6 10 1 4 20 12 17 9 Percentage to total Number of farmers 65 40 30 50 5 20 100 60 85 45 Co-operative (n=20) Total Number of farmers 19 15 3 18 16 12 20 20 17 20 18 Percentage to total Number of farmers 95 75 15 90 80 60 100 100 85 100 90 Total Number of farmers 3 4 4 5 5 5 5 5 4 5 5 Modern (n=5) Percentage to total Number of farmers 60 80 80 100 100 100 100 100 80 100 100

Table 4.21: Pattern of purchases per day by different retail formats Vegetables

Sl No

Formats

Tomato

Cabbage

Carrot

Capsicum

Aggregate average

Qty in Kg

Price Rs/Kg

Total value

Qty in Kg

Price Rs/Kg

Total value

Qty in Kg

Price Rs/Kg

Total value

Qty in Kg

Price Rs/Kg

Total value

Qty in Kg

Total value Rs 112.10 279.42 193.65

1 2 3

Traditional Cooperative Modern

14.50 96.00 38.00

8.00 6.40 7.90

116.00 614.40 244.90

26.00 30.00 12.80

6.00 3.92 5.95

456.00 117.60 76.16

10.00 21.00 18.60

13.50 10.05 12.90

135.00 211.05 239.94

2.90 15.60 11.00

16.00 11.20 14.45

41.40 174.76 158.95

13.35 40.65 20.10

Table 4.22: Buying Management by firms in different formats Supply chain Formats Sl No Particular Traditional (n=5) Total Number of formats I. 1) 2) 3) Buying activities Buy the same quantity every time Buy based on previous days/weeks/months sale Buy based on coming days / weeks / months expected demand Agency from whom they buy : Farmers Intermediaries (wholesaler/commission agent) Cooperatives 5 100 5 100 3 3 60 60 5 1 100 20 2 4 40 80 5 100 Percentage to total Number of formats Cooperative (n=5) Total Number of formats Percentage to total Number of formats Modern (n=5) Total Number of formats Percentage to total Number of formats

20

60

II. 1) 2) 3)

and in case of modern retail formats 60 per cent of retail formats procured from the cooperatives, 20 per cent procured from the farmers and remaining 20 per cent has their own production unit. 4.3.2.3 Pattern of sale of vegetables by different retail formats per day According to the Table 4.23 the quantity sold per day by traditional, cooperative and modern retail format on an aggregate average was 10.31 kg, 37.50 kg and 18.88 kg respectively and the total value for the quantity sold on an aggregate average was Rs. 122.24, Rs. 375.50 and Rs. 221.38 in traditional, cooperative and modern supply chain respectively. Hence, highest total sale value and quantity sold was by cooperative and then followed by modern and traditional retail format

4.3.3 Buying pattern and reasons for buying vegetables from a particular formats by the consumers in the supply chain
4.3.3.1 Pattern of buying by consumers in the different formats in each purchase in the supply chain Among the respondents shopping at traditional, cooperative and modern retail format on an aggregate average, the quantity purchased at each purchase was 0.71 kg, 0.76 kg and 0.61 kg respectively. The total value spent on quantity purchased in each purchase on an aggregate average was Rs. 10.09, Rs. 9.07, and Rs. 9.91 in traditional, cooperative and modern retail formats respectively (Table 4.24). With respect to frequency of purchase of consumers from traditional, cooperative and modern retail format, the number of respondents who purchased daily in different formats was 3 (15.00%), 8 (40.00%) and 8 (40.00%) respectively. The number of respondents who purchased alternate day was 7 (35.00%), 7 (35.00%) and 6 (30.00%) in traditional, cooperative and modern formats respectively. The number of respondents who purchased thrice a week was 8 (40.00%), 4 (20.00%), 4 (20.00%) from traditional, cooperative and modern formats respectively. The number of respondents who purchased once a week was 2 (10.00%), 1 (5.00%) and 2 (10.00%) in the same order as said respectively. 4.3.3.2 Reasons for purchase of vegetables from the particular formats by the consumers in the supply chain Timely availability, proximity, quality of produce, timing, common phobia to enter multinational stores, visual merchandising and store design, promoted by promotional tools, advertisement, wide range of products are available reasonable price, high price discount, good service rendered by the outlets, better packed vegetables which are very good and better suited time were the reasons which influenced the consumers to purchase the vegetables from particular format (Table 4.25). In the traditional supply chain, the number of consumers were influenced much to reasons like timely availability 17 (85.00%), proximity 15 (75.00%), quality of produce 14 (70.00%), wide range of products are available 13 (65.00%), good service rendered by the outlets 13 (65.00%), reasonable price 12 (60.00%) and the less number of consumers were influenced to reasons like timing 10 (50.00%), common phobia to enter multinational stores 9 (45.00%), better suited time 8 (40.00%), discount price 5 (25.00%), better packed vegetables which are very good 2 (10.00%). In the cooperative supply chain, the number of consumers were much influenced to reasons like timely availability 18 (90.00%), quality of produce 18 (90.00%), wide range of products are available 18 (90.00%), reasonable price 15 (75.00%), proximity 13 (65.00%), better suited time 12 (60.00%), timing 11 (55.00%) and the number of consumers were less influenced to reasons like common phobia to enter multinational stores 8 (40.00%), good service rendered by the outlets 8 (40.00%), better packed vegetables which are very good 8 (40.00%), visual merchandising and store design 6 (30.00%), discount price 6 (30.00%), advertisement 4 (20.00%) and promoted by promotional tools 1 (5.00%). In the modern supply chain, the number of the consumers were most influenced to reasons like proximity 18 (90.00%), good service rendered by the outlet 17 (85.00%), visual merchandising and store design 17 (85.00%), timely availability 16 (80.00%), quality of

Table 4.23: Pattern of sale of vegetables by different retail formats per day Sl No Formats Vegetables

Tomato

Cabbage

Carrot

Capsicum

Aggregate average Total value Quantity in Kg Total value Rs

Quantity in Kg

Price Rs/Kg

Total value

Quantity in Kg

Price Rs/Kg

Total value

Quantity in Kg

Price Rs/Kg

Total value

Quantity in Kg

Price Rs/Kg

1 2 3

Traditional Cooperative Modern

24.20 89.00 36.30

10.00 8.80 9.00

242.0 783.2 326.8

8.50 27.50 11.60

9.20 6.40 7.20

78.20 176.00 83.52

6.05 19.50 17.64

18.60 15.20 16.40

112.53 296.40 289.20

2.50 14.00 10.00

22.50 17.60 18.60

56.25 246.40 186.00

10.31 37.50 18.80

122.24 375.50 221.38

Table 4.24: Pattern of buying by consumers in the different formats in each purchase in the Supply chain Sl No I Supply chain Formats Traditional 1.00 10.00 0.60 5.52 0.78 14.50 0.46 10.35 0.71 10.09 3 15 7 35 8 40 2 10

Vegetables

Tomato Cabbage Carrot Capsicum

Quantity (Kg) Value (Rs) Quantity (Kg) Value (Rs) Quantity (Kg)

Cooperative 0.92 8.09 0.67 4.16 0.90 13.67 0.59 10.38 0.76 9.07 8 40 7 35 4 20 1 5

Modern 0.85 9.00 0.68 4.89 0.88 14.43 0.61 11.38 0.61 9.91 8 40 6 30 4 20 2 10

II

Aggregate average Frequency of Purchase by the consumers

Daily

Alternate day

Thrice a week

Once a week

Value (Rs) Quantity (Kg) Value (Rs) Quantity (Kg) Value (Rs) Number of consumers Percentage to total number of consumers Number of consumers Percentage to total number of consumers Number of consumers Percentage to total number of consumers Number of consumers Percentage to total number of consumers

produce 16 (80.00%), reasonable price 4 (70.00%). Better packed vegetables which are very good 12 (60.00%), wide range of products are available 11 (55.00%) and number of consumers were least influenced to reasons like promoted by promotional tools 10 (50.00%), timings 8 (40.00%), advertisement 6 (30.00%), better suited time 4 (20.00%), discount price 2 (10.00%).

4.4

Comparison of price received by the farmers vis--vis price paid by the consumers

In Table 4.26 the average selling price of the farmer or price received by the farmer was compared with average price paid by the consumer was presented. The difference between the price paid by the consumer and price received by the producer was referred to as price spread. The efficiency of the chain was assessed by taking the comparative price difference for vegetables. The chain in which the farmers get higher share by reducing the price spread is considered as most efficient. It is seen from the Table 4.26 that, modern and cooperative supply chain having the smallest price spread of Rs. 4.10 per kg and Rs. 4.10 per kg respectively and found to be more efficient when compared to that of traditional supply chain having highest spread of Rs. 8.31 per kg which is not much efficient.

4.5

Problems faced and expectations of producers, retail formats and consumers in the supply chain

4.5.1 Problems faced by farmers in selling the vegetables in different supply chain and their expectation.
Table 4.27 depicts that problems faced by farmers in selling the vegetables to different formats in the supply chain. Firstly , in the traditional supply chain the major problems they faced was Malpractices of buyers (90.00%), Lack of transportation facility (80.00%), Lack of packing facility (80.00%), Lack of storage facility (60.00%)and hence they expected that no malpractices should be followed at selling unit with proper regulation in the market, Good transportation facility, Good packing facility, Good storage facility and the minor problems they faced was Lack of market information (45.00%), Lack of financial assistance from any company (45.00%), Lack of grading facility (40.00%), Far off location of selling unit (35.00%), Lack of cold shelf facility (30.00%) for the respective problems they expected Market information at right time, Providing financial assistance from companies, Nearness of selling unit/place, Cold shelf facilities during storage of produce and getting contracting arrangements from agencies. In the cooperative supply chain the major problems faced was lack of financial assistance from any company (85.00%) and and hence they expected Providing financial assistance from companies should be followed by buyers with proper regulation in the market. The minor problems the farmers faced was Lack of transportation facility (40.00%), Lack of market information (40.00%), Lack of contracting agencies (40.00%), Lack of storage facility (25.00%), Lack of grading facility (20.00%), Lack of packing facility(20.00%), Lack of cold shelf facility(10.00%) and Far off location of selling unit (5.00%). For the respective problems it was expected that good transportation facility, Market information at right time, getting contracting arrangements from agencies, Good packing facility , Cold shelf facilities during storage of produce and Nearness of selling unit/place should be made for better benefits to them. In Modern supply chain the major problems they faced was Lack of financial assistance from any company (85.00%), Lack of market information and Lack of contracting agencies (60.00%) and hence they expected Providing financial assistance from companies and getting contracting arrangements from companies. The minor problems the farmers faced was Far off location of selling unit (40.00%) Lack of transportation facility (20.00%), Malpractices of buyers (20.00%). For the respective problems, they expected Nearness of selling unit/place, Good transportation facility and No malpractices should be followed by buyers with proper regulation at the selling unit.

Table 4.25: Reasons for buying vegetables from the particular formats by the consumers in the Supply chain

Supply chain Formats Reasons Traditional (n=20) Total Number of Consumers 17 15 14 10 9 13 12 5 13 2 8 Percentage to total number of Consumers 85 75 70 50 45 65 60 25 65 10 40 Co-operative (n=20) Total Number of Consumers 18 13 18 11 8 6 5 4 18 15 6 8 8 12 Percentage to total number of Consumers 90 65 90 55 40 30 25 20 90 75 30 40 40 60 Modern (n=20) Total Number of Consumers 16 18 16 8 17 10 6 11 14 2 17 12 4 Percentage to total number of Consumers 80 90 80 40 85 50 30 55 70 10 85 60 20

Sl No

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Timely availability Proximity Quality of produce Timing Common phobia to enter multinational stores Visual merchandising and store design Promoted by promotional tools Advertisement Wide range of products are available Reasonable Price Discount price Good services rendered by the outlets Better packed Vegetables which are very good Better suited time

Table 4.26: Price received by the farmer vis-a- vis price paid by the consumer in the supply chain Selling price of the farmer Sl No Traditional (n=20) 1 2 3 4 Tomato Cabbage Carrot Capsicum Aggregate average 5.09 3.25 9.22 9.50 6.76 Cooperative (n=20) 6.40 3.92 10.05 11.20 7.89 Modern (n=5) 7.00 5.90 10.60 11.30 8.70 Traditional (n=20) 10.00 9.20 18.60 22.50 15.07 Cooperative (n=20) 8.80 6.40 15.20 17.60 12.00 Modern (n=20) Traditional Cooperative Modern Vegetable (Rs per Kg) Price paid by the Consumers (Rs per Kg) Price Spread (Rs per Kg)

9.00 7.20 16.40 18.60 12.80

4.91 5.95 9.38 13.00 8.31

2.40 2.48 5.15 6.40 4.10

2.00 1.30 5.80 7.30 4.10

Table 4.27: Problems faced by the farmers in selling the produce to different formats in the Supply chain Supply chain Formats Traditional (n=20) Number of farmers 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Far off location of selling unit Lack of transportation facility Lack of market information Malpractices of buyers Lack of grading facility Lack of packing facility Lack of storage facility Lack of cold storage facility Lack of financial assistance from any company Lack of contracting agencies 7 16 9 18 8 16 12 6 9 6 Percentage to total Number of farmers 35 80 45 90 40 80 60 30 45 30 Co-operative (n=20) Number of farmers 1 8 8 4 5 2 2 17 8 Percentage to total Number of farmers 5 40 40 20 25 10 10 85 40 Number of farmers 2 1 4 1 5 3 Modern (n=5) Percentage to total Number of farmers 40 20 80 20 100 60

Sl. No.

Particulars of problems

4.5.2 Problems faced by retail outlets in marketing of vegetables in different supply chain and expectations of retail outlets
The problems faced by retail outlets under different formats in marketing of vegetables in the supply chain are listed in Table 4.28. In the study, major problems the retail outlet in the traditional supply chain faced an Inadequate physical facilities (100.00%), Failing in assessment of demand (100.00%) Timely supply (100.00%), Price fluctuation (100.00%), Lack of transportation facility (80.00%), More physical loss of produce (80.00%), Procurement problems (60.00%) and Private competitors in the market (60.00%) and hence they expected Adequate physical facilities, Proper planning in assessment of demand, Timely supply of produce, Less price fluctuation, Good transportation facility, Less physical loss of produce, Proper planning of procurement and Less competition to exist in the market respectively. The minor problems they faced was Absence of storage facility (40.00%), Failing in rendering service to customers (40.00%), Absence of grading facilities (20.00%) and Nonavailability of suitable weighing facilities (20.00%) and to the respective problems they expected Good storage facility, Rendering good service to customers, Good grading facilities and Availability of suitable weighing facilities. In the Cooperative supply chain retail formats major problem faced was Price fluctuation (100.00%), More physical loss of produce (100.00%), Failing in assessment of demand (80.00%), Procurement problems (80.00%) and they expected Less price fluctuation, Less physical loss of produce , assessing the demand at right time, Proper planning of procurement respectively and the minor problem was Absence of storage facility (40.00%), Timely supply (20.00%), Private competitors in the market (20.00%), Failing in rendering service to customers (20.00%) and Lack of cold shelf facility (20.00%) and they expected Good storage facility, Timely supply of produce, Less competition to exist in the market, Rendering good service to customers and Good cold shelf facility respectively In the Modern supply chain retail formats major problem faced was Price fluctuation (80.00%), Absence of wide range of products other than Vegetables (80.00%), Failing in assessment of demand (60.00%), Procurement problems (60.00%) and Timely availability of produce(60.00%) and they expected Less price fluctuation, Concentrate mainly on Vegetables, Assessing of demand at right time, Right planning for procurement and Availability of produce at right time respectively and the minor problem they faced was More physical loss of produce(40.00%), Quality of produce(40.00%), Timings (40.00%) and Lack of cold shelf facility (40.00%) and to the respective problems they expected Less physical loss of produce, Good quality of produce, Timings to be extended and Cold shelf facility to be provided.

4.5.3 Problems faced by consumers in buying the vegetables in different supply chain and their expectation.
The problems faced by consumers in buying the vegetables from different retail formats in the supply chain are listed in Table 4.29. The consumers who purchased from retail formats of traditional supply chain faced major problems like Unhygienic condition (90.00%), No proper packing (90.00%), Very high prices(60.00%)and they expected Hygienic condition, Good packing facility and Less price for the vegetables for respective problems. The minor problems they faced was No facility for feed back (55.00%),Timings of the retail outlet(50.00%), Inconvenience / not nearness of the retail outlets(40.00%), Quality of product is unsatisfactory(40.00%),Absence of wide range of products(35.00%),Unsatisfactory responses and services rendered at a retail outlet(30.00%), No timely availability of produce(15.00%). Hence, they expected a Facility for feed back, Timings of the retail outlet should be extended, Nearness of the retail outlets, Quality of products should be satisfactory, Presence of wide range of products, Satisfactory responses and services rendered at a retail outlet , Timely availability of produce to the problems. The consumers who purchased from retail formats of Cooperative supply chain faced major problems like No proper promotional tools and sales on credit (75.00%)and No proper packing (60.00%)to the respective problems they expected proper promotional tools and credit sales and proper packing facility. The minor problem they faced was Timings of the retail outlet (45.00%), No facility for feed back (40.00%), Inconvenience / not nearness of the

Table 4.28: Problems faced by different retail formats in their vegetable marketing in the Supply chain Supply chain formats

Sl. No.

Particulars of problems Number of formats

Traditional (n=5)

Co-operative (n=5)

Modern (n=5)

Percentage to total Number of formats 100 20 40 80 100 20 100 60 80 100 60 40 -

Number of formats 2 5 4 4 5 1 1 1 1

Percentage to total Number of formats 40 100 80 80 100 20 20 20 20

Number of formats 4 3 3 2 3 4 2 2 2

Percentage to total Number of formats 80 60 60 40 60 80 40 40 40

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Inadequate physical facilities Absence of grading facilities Absence of storage facility Lack of transportation facility Price fluctuation (wide and low) Non-availability of suitable weighing facilities Failing in assessment of demand Procurement problems More physical loss of produce / storage loss Timely supply Private competitors in the market Failing in rendering service to customers Timely availability of produce Absence of wide range of products other than Vegetables Quality of produce Timings Lack of cold shelf facility

5 1 2 4 5 1 5 3 4 5 3 2 -

Table 4.29 Problems faced by the consumers in buying the vegetables from different Retail formats in the supply chain Supply chain formats Traditional (n=20) Sl. No. Particulars of problems Number of Consumers Percentage to total Number of Consumers 15 35 60 40 30 40 90 90 55 50 Number of Consumers Percentage to total Number of Consumers 10 10 25 10 25 75 35 25 20 60 40 45 Number of Consumers Percentage to total Number of Consumers 30 30 50 15 20 50 30 20 5 40 35 60 Co-operative (n=20) Modern (n=20)

1. 2. 3. 4. 5. 6. 7. 8. 9.

No timely availability of produce Absence of wide range of products Very high prices Quality of product is unsatisfactory Unsatisfactory responses and services rendered at a retail outlet No proper promotional tools Inconvenience / not nearness of the retail outlets Unhygienic condition No proper store design and visual merchandising

3 7 12 8 6 8 18 18 11 10

2 2 5 2 5 15 7 5 4 12 8 9

6 6 10 3 4 10 6 4 1 8 7 12

10. No proper packing 11. No facility for feed back 12. Timings of the retail outlet

retail outlets (35.00%), Unhygienic condition(25.00%), Unsatisfactory responses and services rendered at a retail outlet (25.00%), Very high prices (25.00%), No proper store design and visual merchandising(20.00%), No timely availability of produce(10.00%), Absence of wide range of products (10.00%) and Quality of product is unsatisfactory (10.00%) and they expected Timings of the retail outlet should be extended, Facility for feed back, Nearness of the retail outlets, Hygienic condition, Good responses and services rendered at a retail outlet, Less prices, Proper store design and visual merchandising, Timely availability of produce, Wide range of products to be made available and Quality of product should be satisfactory to the respective problems. The consumers who purchased from retail formats of modern supply chain faced major problem was Timings of the retail outlet (60.00%) and hence they expected timings to be extended and the minor problems they faced was No proper promotional tools and sales on credit (50.00%), Very high prices (50.00%), No proper packing (40.00%), No facility for feed bac(35.00%), No timely availability of produce (30.00%), Absence of wide range of products (30.00%),Inconvenience / not nearness of the retail outlets (30.00%), Unsatisfactory responses and services rendered at a retail outlet (20.00%), Unhygienic condition(20.00%), Quality of product is unsatisfactory (15.00%) and No proper store design and visual merchandising (5.00%) and hence they expected Proper promotional tools and credit sales, Less prices, Proper packing, Facility for feed back, Timely availability of produce, Availability of wide range of products , Nearness of the retail outlets ,Satisfactory responses and services rendered at a retail outlet, Hygienic condition, Quality of product should be good and proper store design and visual merchandising to the respective problems.

5. DISCUSSION
The results of the investigation presented in the previous chapter are discussed in this chapter under the following headings. 5.1 5.2 5.3 5.4 5.5 Comparative role played by the intermediaries in the traditional format as well as contracting firms in the different formats of the supply chain. Marketing efficiency of different formats in the supply chain. Factors influencing the effectiveness of the supply chain. Comparison of price received by the farmers vis--vis price paid by the consumers. Problems and expectations of farmers, retail formats and consumers in the supply chain.

5.1

Comparative role played by the intermediaries in the traditional format as well as contracting firms in the different formats of the supply chain

In the three formats of the supply chain viz., traditional, cooperative and modern formats, in the traditional supply chain, intermediaries were involved and had a better relationship with the farmers for procuring the produces by providing an advice about the time of planting and varieties to be planted (75%). However, in case of other services such as transport facility and assembling services were not provided by the intermediaries, but provided grading service facility (50%), packing service (25%), storage service (50%). In the cooperative supply chain, the cooperative formats having the better relationship with farmers and provided 100 per cent services about the time of planting and varieties to be planted. In case of other services, it provided services such as transport service facility (100%), grading services facility (100%), assembling service (100%), packing services (100%) and storage services facility (100%). In the modern supply chain, the modern formats having better relationship with farmer and provided the advice about the time planting and varieties to be planted (25%). In case of other services, it provided transport facility (25%) grading service facility (25%), assembling service facility (25%), packing service (100%) and storage services (100%). It could be seen from the Table 4.1. Hence, it can be see that higher percentage of functions performed by cooperative format supply chain. It may be because of better network with farmers. In modern supply chain, the functions performed are very less because it covers less number of clients because of small size of its business in vegetable marketing as compared to cooperatives. Similarly, in case of traditional formats due to large number of intermediaries involved loosely in the chain may made to perform few functions in the supply chain. This results are in conformity with the findings of Helen et (2000).

5.2

Marketing efficiency of different formats in the supply chain

5.2.1 Material used for packing vegetables in the supply chain


In case of traditional format of the supply chain except for tomato majority of the farmers 100 per cent used the gunny bag for packing vegetables such as cabbage, carrot and capsicum may be due to loose organization of supply chain. Whereas 90 per cent of the farmers used plastic boxes for tomato because of high perishability as compared to other vegetables. In the cooperative supply chain, for tomato, carrot and capsicum 100 per cent of the farmers used plastic boxes, because of supply of plastic boxes by cooperatives, but it was less that is 75 per cent in case of cabbage due to less perishability. In the modern supply chain, for all the vegetable such as tomato, cabbage, carrot and capsicum, 100 per cent of the farmers used the plastic boxes as the packing material to sell the vegetables due to the supply of plastic boxes and well organized chain. Similarly, since the packing plastic trays reduced the mechanical damages while transport which reduces the physical loss of the produce. The results are in conformity with Lokanadhan (2007) it could be seen in table 4.2.

5.2.2 Physical losses in the supply chain


5.2.2.1 Physical losses at the wholesaler level in the traditional supply chain Total quantity at aggregate average of vegetable handled by the wholesaler was 2650 kgs daily and out of which on an aggregate average 150 kg was lost per day because of high perishable nature of vegetables and loose organized management of supply chain as well as losses during transportation and loading and unloading levels were more in traditional supply chain. Hence, there was a loss of 6.34 per cent of wastage to the total quantity procured in this format (Anil Kumar and Arora, 1999). This may be seen from Table 4.3. 5.2.2.2. Physical losses occurred at the retail format level in the traditional supply chain As could be seen from Table 4.4 on an aggregate average, in the traditional retail format losses occurred to the extent of 1.16 kg per day for the total quantity handled i.e., 11.47 kg per day and it accounts for 12.28 per cent, which was found to be highest percentage of wastage compared to all other chains. The wastage was due to losses during transportation and loading and unloading and spoilage nature of the vegetables as well as loose organized supply chain management and performing functions. 5.2.2.3 Physical losses occurred at the retail format level in the cooperative supply chain Total quantity handled by the cooperative retail format at aggregate overall average was 40.65 kg per day, out of which an aggregate average loss was 3.40 kg and it accounts for 9.08 per cent of the total quantity handled per day it mainly due to high perishable nature of vegetable and losses during transportation, loading and unloading and also during storage which was better than traditional supply chain management and less better than modern supply chain management. It may be seen from Table 4.5 5.2.2.4 Physical losses occurred at the retail format level in the modern supply chain The total quantity handled at aggregate average level, the modern retail format was 20.10 kg per day and accounts a wastage was 1.30 kg per day and 7.27 per cent of the total quantity handled per day may be because of better handling of vegetables in the supply chain that is packaging and transportation. The above may be seen from Table 4.6. 4.2.2.5 Physical losses occurred at different levels in the supply chain of different formats The physical losses occurred at various level that is at wholesaler level and retailer level add upto an aggregate of 15.16 kg per day for the total quantity handled that is 2661.47 kg per day in case of traditional supply chain due to too large length of the channel in the chain. But in case cooperative and modern supply chain, only at the retailer level due to absence of intermediaries the wastage was 3.40 kg and 1.39 kg per day respectively and the total quantity handled was 40.65 kg and 20.10 kg respectively. Hence, the highest percentage of wastage to total quantity procured was 9.31 per cent in traditional supply chain followed by 9.08 per cent in cooperatives and 7.27 per cent in modern supply chain. The reason for occurrence of high wastage at traditional supply chain was due to less sophisticated packing materials used, non-better methods of transportation and loading and unloading in the chain as compared to cooperative and modern supply chain. This could be seen from the Table 4.7.

5.2.3 Cost incurred in the supply chain


5.2.3.1 Cost of marketing vegetables by farmers in traditional supply chain As shown in Table 4.8, the cost of marketing vegetables by farmers in traditional supply chain, the major contribution to cost was by commission charges which was paid to commission agent. It was the main reason for lower price realization in the supply chain. The next major contribution to cost was by transportation and packing charges in the total marketing cost. The inefficient use of means of transportation, packing material and long distance covered may influenced the cost and expenditure which was incurred by farmers. The similar results has been obtained by Gupta and Rathore (1999). 5.2.3.2 Cost of marketing vegetables by farmers in cooperative supply chain In the Table 4.9, the service charges was the major contributor to marketing cost of the farmers in the cooperative supply chain. The next major component was the ransportation

cost and packaging cost. The cost incurred by producer seller in the cooperative supply was lower as compared to traditional supply chain. This was mainly due to lower rate of service charges incurred in cooperative society as compared to traditional supply chain where the commission charges were to the extent of 8 per cent of the value of goods. This suggested that relatively more efficient performance of cooperative supply chain over traditional supply chain. The same results has been obtained by Hugar (1980). 5.2.3.4 Cost of marketing vegetables by farmers in modern supply chain From the Table 4.10, the marketing cost of farmers in modern supply chain, the major component was transportation cost followed by packing cost due to better tansport facility and good packing materials that is plastic boxes may be the reason. The marketing cost incurred was less compared to traditional supply chain for the above said reasons and hence higher price to growers and lesser price to consumers was made possible in this supply chain. The similar findings of the study was brought out by Lokanadhan (2007). 5.2.3.5 Aggregate average cost of marketing vegetables by farmers per day per farmer under different supply chain As shown in Table 4.11 the highest marketing cost was incurred by farmers in traditional supply chain followed by cooperative and modern supply chain but the highest price received by them was by modern and cooperatives. As compared to modern supply chain highest quantity was sold by traditional chain and cooperative, due to long distance covered during transportation, expenditure on the packaging material, commission charges paid by the farmer and also due to spoilage occurred during marketing of their produce made to incur high cost by farmers in traditional supply chain.

5.2.4 Cost and return in the supply chain


5.2.4.1 Cost and return in vegetable marketing by commission agent in the traditional supply chain The costs incurred by commission agent in the chain was found to be Rs. 11.75 per quintal. This was mainly because commission agent incurs marketing fee, lincence fee, electricity, shop rent, maintenance charge, labour charges and interest on capital invested. The commission received after the sale of producer by the farmer would become income to the commission agent. Since they did not incurred any transportation cost, packaging cost or any value incurred on spoilage of produce handled, the net returns per quintal was Rs. 55 per quintal with commission charges at 8 per cent. This could be seen from Table 4.12. 5.2.4.2 Cost and returns in vegetable marketing by wholesaler in traditional supply chain The cost incurred by wholesaler was Rs.66.91 per quintal which includes the cost like market fee, licence fee, shop rent, electricity maintenance charges, interest on capital invested and also the total value spoiled during marketing. It was seen from the table that the purchase price was Rs. 843.75 per quintal and sale price was Rs. 1087.5 per quintal. Hence with high prices and less cost they incurred, the net return worked out to be Rs. 98.92 per quintal per day with an aggregate average quantity handled per day i.e., 26.50 quintal. This could be seen from Table 4.13. 5.2.4.3 Cost and returns in vegetable marketing by traditional retail format In Table 4.14, the cost and returns of traditional retail format, the quantity handled by it was 11.47 kg per day and the purchase price was Rs. 10.87. However, due to high cost of marketing the net returns realized by the retail format was Rs. 0.633 per kg which was very low as compared to other formats in the supply chain. 5.2.4.4 Cost and return in vegetable marketing by cooperative retail format As shown in the Table 4.15 the quantity handled on an aggregate average by cooperative format was 40.65 kg per day which was higher as compared to other formats of the supply chain. The purchase price was Rs. 7.89 per kg and it procured directly from their main cooperative units. Therefore, it incurred less cost for procurement and also cost incurred by the retail outlets in marketing vegetables was also comparatively less. The quantity sold by it was 37.50 kg per day and selling price was Rs. 12.00 per kg. The quantity sold was less than quantity handled was because of physical loss in the chain. The net returns was Rs. 1.90

per kg which was found to be higher compared to all other retail formats of the supply chain because of less physical loss of produce and other costs of marketing in the supply chain. 5.2.4.5 Cost and return in vegetable marketing by modern retail format In modern retail format, on an aggregate average, the quantity handled by it was 20.10 kg per day. Its procurement price was Rs. 10.30 per kg and procured directly from the farmers as well as from the cooperative units. It incurred less physical losses due to better infrastructure facilities and proper management as compared to traditional and cooperative formats of supply chain. The total cost incurred by it was also less that is Rs. 0.80 per kg, as compared to other formats owing to the above said reasons. The selling price was Rs. 12.80 per kg and earned a net returns of Rs. 0.79 per kg which was higher than traditional retail format of the supply chain but lesser than cooperative format of the supply chain because of higher purchase price of the vegetables by the modern format of the supply chain. The above results may be seen from the Table 4.16. 5.2.4.6 Aggregate average cost and return in vegetable marketing under different formats in the supply chain Table 4.17 reveals that the aggregate average quantity handled was higher in cooperative format as compared to modern and traditional retail formats of the supply chain. This may be because of cooperative got the vegetables from the safal market and HOPCOMS and it had a large network of retail outlets in the city with a convenient distance to the consumer. Therefore large quantity of vegetables handling was made possible for the corporatives compared to other retail formats. The purchase price was low in cooperative compared to modern and traditional formats may be because of large farmer selling their produce in the HOPCOMS and safal yards directly to the cooperatives without any intermediary and hence retail outlets receive the vegetables at a cheaper price. However purchase price was higher in traditional formats may be due to purchases from the wholesalers of commission agents. Similarly, purchase price was also higher in modern retail formats may be due insistence of better quality and fresh vegetables purchased from the farmers and farmer has to deliver it to their premises, it paid higher price to farmers. The retail price of vegetables was lower in cooperatives formats as compared to other retail formats owing to lower purchase price as compared to other retail formats of the supply chain. The total cost of marketing per kg of vegetables handled was lower in modern retail format of supply chain (Rs. 0.80 per kg) as compared to traditional format (Rs.1.635/kg). This lower cost may be due to absence of intermediaries and very low physical losses in the supply chain when compared to other retail formats of the supply chain. The net returns obtained in the different formats showed that, the net returns per kg of vegetables was higher in case of cooperative retail format (Rs. 1.90/kg) as compared to modern (Rs. 0.79/kg) and traditional (Rs. 0..63/kg) retail formats. This higher net returns per kg of vegetables in the cooperative retail format mainly may be because of lower purchase price of vegetables and large quantity of vegetables handled by it.

5.2.5 Marketing cost, margins and producer share in the consumers rupee under different formats in the supply chain
Marketing margins measures the gap between net price received by the cultivators and the price paid by the consumer. In the point of view of marketing efficiency this gap has to be reduced to the bearest minimum. Broadly, speaking, two factors contributing towards the widening of the gap, first costs incurred by the farmers and cost incurred by retail formats. Secondly, the margin of profits obtained by the retail formats. The producer share in the consumer rupee is to be increased, the cost of marketing needs to be cutdown on the one hand and reduce profit margins of retail formats on the other through achieving an efficiency in performance of the functions in the supply chain. As could be seen in Table 4.18 the cost incurred by the farmer varied between different formats of the supply chain, because of quantity sold, cost incurred on the various functions, place where it was sold and agency whom it was sold was influenced the variations in the cost. The costs incurred by the farmer and retail format was higher in traditional supply chain because length of the change was lengthy as compared to the cooperative and modern

formats of the supply chain. The difference in the purchase price of modern formats and traditional formats with the gross price received by the farmer is due to purchases from wholesalers, commission agent and farmers in combination. Marketing margin as percentage of consumer price was found to be less in cooperative supply chain 3.2 per cent as compared to traditional supply chain 4.40 per cent and in modern supply chain 6.30 per cent because of low consumer price in cooperative supply chain as compared to other formats of the supply chain. The producers share in the consumer rupee was found out to be higher in modern supply chain (64.68%) compared to cooperative supply chain (58.83%) and traditional supply chain (37.15%). This was mainly because of difference in the consumer price obtained that is Rs. 12.00/kg in cooperative supply chain, Rs. 12.50/kg in modern supply chain and Rs. 15.07 /kg in traditional supply chain. On one hand and on the other, higher net producers price obtained by the farmer. Modern supply chain was found to be the most efficient as indicated by index of marketing efficiency (4.32) when compared to other formats of the supply chain. It is because of more producers net price to the total gross marketing margin. Similarly, this is followed by cooperative supply chain where index of marketing efficiency was 2.10 because of higher producers net price to total gross marketing margins. However, this index is low that is 1.97 in traditional supply because of cost incurred by the farmers is higher and also received low price as compared to other supply chain. It is advisable to the farmers to sell their produce through modern supply chain and cooperative supply chain. The same results have been inferred by Hugar (1980) and Biradar (1996). Therefore, farmers should sell more and more vegetables through HOPCOMS and Safal and cooperative retail formats to be encouraged to provide vegetables to consumers in the cities. The above results may seen from Table 4.18.

5.3

Factors influencing the efficiency in the supply chain

5.3.1 Disposal pattern and reasons for sale of the vegetables to a particular formats by the farmers in the supply chain
5.3.1.1 Disposal pattern of produce by the farmers in the supply chain The results of the analysis (Table 4.19) indicated that, the frequency of sale of vegetables by farmers in traditional supply chain varied depending on the vegetables because to make up the transportation cost, depending on the availability of packaging materials, distant market and to some extent depending on harvesting of their produce. But in modern and cooperative supply chain, the frequency was almost daily because they transported their produce to consolidation centre of the cooperative units and modern firms on regular basis as well as easy availability of the packing materials by the firms to farmers. Similarly, it was also to make up the demand of the firms, the farmers harvested their produce to meet the requirement of the retail formats in the supply chain. The cooperatives linked the private sector to meet the procurement of modern firms. It was seen that in case of cooperative and modern retail format irrespective of the requirement they procured depending on the market condition. 5.3.1.2 Reason for the sale of produce by farmers to a particular formats in the supply chain The study revealed that among different factors influencing the farmers to sell their vegetables to particular format in the supply chain was due to the spot payment, correct weight, proximity and remunerative price which were found to be major factors. However if it is seen from the Table 4.20, the farmers sell their vegetables to the traditional format chain was mainly because of spot payment, correct weight, remunerative price and proximity of buyers. Similarly, in case of cooperative format, the farmers sell their vegetables mainly because of absence of middlemen, spot payments, correct weight, remunerative price, proximity, less charges, better services rendered by them, provision for technical guidance and less charges for the services. All these advantages available to farmers to sell their vegetables to the cooperatives. The farmers mainly sell the vegetables to the modern formats mainly because of better services provision for technical guidance, getting storage and transport facility absence of middle men, spots payment, correct weight and less charges.

5.3.2 Pattern of purchases, buying management and sales pattern by different formats in the supply chain
5.3.2.1 Pattern of purchases of vegetables per day by different retail formats per day In this section a comparative account on the pattern of purchases by retail formats per day that is in traditional, cooperative and modern supply chain are presented in Table 4.21. Aggregate average of quantity purchase per day and its total value are compared in different formats of supply chain. The traditional retail format purchased 13.35 kg per day with a total value of Rs. 112.10, cooperative retail format purchased 40.65 kg per day with a total value of Rs. 279.42 and modern retail format purchased 20.10 kg per day with a total value of Rs. 193.65. It could be visualized from this is that the quantity of vegetables purchased by cooperative retail format was higher than modern retail format and traditional retail format. This was mainly because of higher network of retail business of vegetables in the city by cooperatives as compared to other formats purchases large quantities from safal market and availability of vegetables at a cheaper price. The modern units and cooperative units purchased the vegetables as per the requirement irrespective of the market conditions and they were have the good facility in consolidation centre to fulfill the demand. 6.3.2.2 Buying management by firms in different formats of the supply chain A comparative account on the buying activities of vegetables and the agency from whom they buy is presented in Table 4.22. As vegetable is a perishable commodity it was purchased daily and also it was having daily demand. But buy the same quantity every time was seen only in traditional and cooperatives retail format that is to the extent of 100 per cent in traditional retail format and 40 per cent in cooperative retail format. It was not followed in modern retail format. The retail formats buying based on previous day/weeks/months sale was only to the extent of 20 per cent, 80 per cent and 100 per cent in case of traditional, cooperative and modern retail formats. This difference may be depending on the quantity of sale made in previous week or month or the left over stock in previous days sale they purchased the vegetables. The retail formats buying based on coming days/weeks/months expected demand was highest in modern retail format that is 60 per cent. However, in cooperative retail format it was only about 20 per cent and it was absent in traditional retail format, this may be because of purchases every day same quantity. Quantity of buying from a particular agency indicated that 100 per cent of traditional retail formats, requirements brought from intermediaries. Whereas, in cooperative retail formats, 100 per cent procurement was directly from the local farmers as they were having their sub units for purchase of produce at different villages. In case of modern retail formats 60 per cent of retail formats buying was from the cooperatives for their convenient buying and reduce their cost. In the modern format, the remaining 40 per cent was procured from their own production unit and from the farmers directly. 5.3.2.3 Pattern of sale of vegetables by different retail formats per day From the Table 4.23 a comparative account on the pattern of sale by retail formats per day in traditional, cooperative and modern supply chain can be seen. The aggregate average quantity sold per day and its total values are compared. The traditional retail formats sold 10.31 kg per day with a total sale value of Rs. 122.24, in cooperative retail format sold 37.50 kg which accounts sale value of Rs. 375.50 and in modern retail format it sold 18.80 kg having a sale value of Rs. 221.38 per day. It could be seen from the above discussion that quantity of vegetables sold by cooperative retail format was higher in cooperative format which followed by modern retail format and traditional retail format. This is because of the reason that the price at which they sell to the consumers, cost incurred by the retail formats in marketing their produce, attractive measure for their sale, easy packaging facility and wide range of products with its quality and capacity to buy and sell which were good in cooperative formats.

5.3.3 Buying pattern and reasons for buying vegetables from a particular formats by the consumers in the supply chain
5.3.3.1 Buying pattern of consumers in the different formats in the supply chain in each purchase In the Table 4.24 the consumers buying pattern of vegetables in aggregate average in each purchase was showed that highest quantity purchased was 0.76 kg in cooperative format followed by traditional and modern formats of the supply chain that is 0.71 kg and 0.61 kg respectively. This depends on type of customer comes to the shop. At the same time the quantity purchased depends on the value of the vegetables and frequency of purchase of consumers. The frequency of purchase, by consumers in traditional supply chain, higher percentage of consumers visited thrice a week (40.00%) followed by alternate day (35.00%), daily (15.00%) and once a week (10.00%). In case of cooperative supply chain highest percentage of consumes visited daily (40.00%) followed by alternate day (35.00%), thrice a week (20.00%) and once a week (5.00%). Similarly, in the modern supply chain the highest percentage of consumers visited daily (40.00%) followed by alternate day (35.00%), thrice a week (20.00%) and once a week (10.00%). This indicated a more or less the buying pattern of consumers was same irrespective of the supply chain formats. The majority of consumers visited daily and alternate day for purchase of vegetables. The highest quantity purchased was in cooperative format due to lower price. Similarly, in modern supply chain the consumers visited daily and alternate day but the prices were comparatively higher than the cooperative format and hence the quantity purchased was slightly lower. In traditional, since the majority of consumers visited the retail format at thrice a week followed by alternate day, daily and once a week and hence the quantity purchased was higher in traditional supply chain compared to modern supply chain. 5.3.3.2 Reasons for purchase of vegetables from the particular formats by the consumers in the supply chain The study revealed that among the different reasons for purchase of vegetables by the consumers from the particular formats such as traditional, cooperative and modern retail format of the supply chain as shown in Table 4.25 that, in case of traditional format of the supply chain the consumers influenced mainly because of timely availability, proximity, quantity of produce, wide range of products, availability, good services rendered by the outlets, reasonable price, common phobia to enter multinational stores, better suited time, discount price which were the factors in the same order considered by the consumers to purchase from traditional retail format. In the cooperative supply chain, majority of the consumers were influenced mainly because of timely availability, quality of produce, wide range of products availability, reasonable price, proximity, better suited time, common phobia to enter multinational stores, good service rendered by the outlets, better packed vegetables which were very good, visual merchandising and store design, discount price. In the modern supply chain, the consumers were influenced by proximity, good service rendered by the outlet, visual merchandising and store design, timely availability, quality of produce, reasonable price, better packed vegetables which are very good, wide range of products are available, promoted by promotional tools, timings, advertisement, high price and better suited time in the same order to purchase from modern retail format.

5.4 Comparison of price received by the farmers vis--vis price paid by the consumers
As seen in Table 4.26 the aggregate average of price spread which refers to difference between the price paid by the consumer and price received by the farmer is worked out and inturn compares the aggregate average of price received by the farmer vis--vis aggregate average price paid by the consumers. The price spread was highest in traditional supply chain that is Rs. 8.31 per kg which followed by Rs. 4.10 per kg and Rs. 4.10 per kg in cooperative and modern supply chain. But the chain having the smallest price spread is most efficient. Therefore, the efficiency of the chain was assessed by taking the comparative price difference for vegetables. Hence, it can be concluded that modern supply chain and cooperative supply chain are most efficient as compared to traditional supply chain whose

price spread is twice the price spread of modern and cooperative supply chain. This was mainly because of lengthy chain in traditional format.

5.5 Problems and expectations of farmers, retail formats and consumers in the supply chain
5.5.1 Problems faced by farmers in selling the vegetables in different supply chain and their expectations
It was evident from the results (Table 4.27) that the problems faced by farmers, in the traditional supply chain, the major problems faced were malpractices of buyers, lack of transportation facility and lack of storage facility. These were due to large number of intermediaries and malpractices of buyers. Hence farmers expected proper regulation of market to avoid the malpractices, provide the market facilities farmer door steps and good storage facility at the farm level and in market. The results are in conformity with Gopalan and Gopalan (1991). In the cooperative supply chain, the problems faced by the farmers mainly the financial assistance from company. This may be due to the reason that even the cooperative format provided all the services to the farmers, but not credit facility. Hence, the financial assistance in the cooperative formats may be created by having contract farming activities. In the modern supply chain, the farmers selling their produce to modern format faced with the problems such as lack of financial assistance from any company, lack of market information, and lack of contracting agencies. Hence, companies may make needed credit facility, company to support with market information and to procure only from the contracted farmers by providing contract agreement.

5.5.2 Problems faced by retail outlets and in marketing of vegetables in different supply chain and expectation by retail outlets
As shown in Table 4.28 the problems faced by retail outlets, in traditional supply chain, the retail formats faced mainly the problems such as inadequate physical facility for the shop, failing in assessment of demand, timely supply of vegetables, price fluctuation, lack of transportation facility, more physical losses of produce, procurement problems and private competitors in the market. Respective problems were due to less amount for investment, no proper planning for assessment of demand, high price fluctuation which depends on arrival and season for that vegetables, inadequate transportation facility which is costlier too, improper handling and no proper storage facility leads to physical loss of produce, no proper planning for procurement, and high competition from the outside markets. Hence it expected an adequate physical shop facilities and guidance to cope with the problems by providing training in retailing activities in the urban areas. In the cooperative supply chain, the retail outlets faced a major problems such as price fluctuations, more physical losses of produce, failing in assessment of demand and procurement problems. The problems were due to high price fluctuation which depends on the arrival and season of vegetables, due to improper handling and spoilage of vegetables, no proper planning for assessment of demand and no proper planning for procurement respectively. Hence it was expected to build the capacity with the cooperatives to lessen the price fluctuation with proper planning for procurement, less physical losses of produce with proper handling and storage facility, assessing the demand at right time and proper planning of procurement respectively. In modern supply chain the retail outlets, faced the major problems such as price fluctuation, absence of wide range of products, failing in assessment of demand, procurement problems and timely availability of produce in the same order. Therefore in the modern retail formats also needs to be develop the capacity to cope with price fluctuation and extending wide contractual arrangement for varied products regularly by better planning.

5.5.3 Problems faced by consumers in buying the vegetables in different supply chain and their expectation
The problems as opined by the consumers in buying the vegetables as indicated in Table 4.29 showed that, in traditional supply chain, the retail formats faced the major problems such as majority are opined that there is unhygienic condition, no proper packing, very high prices in the same order. Respective problems faced by consumers were due to no proper cleanliness maintained in retail outlet, no proper packing facility adopted by them and to make up the high cost incurred by them in the long channel of trade. Hence the consumers expected hygienic condition by maintaining cleanliness in the market, good packing needs to be adopted in order to influence the quantity purchased by the farmers. In the cooperative supply chain the consumers buying from the cooperative retail format faced the problems such as no proper promotional tools and no proper packing. The problems were due to non adoption of promotional tools by cooperative retail outlets and easy packing facility was not given by them. Hence it was expected to take up proper promotional tools and proper packing facility by cooperative retail outlets. In modern supply chain, the major problem the consumers faced is timings of the retail outlet only. The major problem was due to timings was not convenient to consumers and consumers expected to extended the timings by the modern retail formats.

6. SUMMARY AND POLICY IMPLICATIONS


India is land of agriculture diversity. With 2/3 of population still dependent on agriculture and contributing about 20% to Indian GDP, the condition of Indian farmers is still miserable. The main reason for this can be accounted due to poor price realization by the farmers in consumer rupee. This ranges from 35-65 paise per rupee. This low realization can be attributed to large number of intermediaries present in the chain between producers farmer and ultimate consumer, hence to counter this problem what is needed is a development of a proper supply chain so that farmers, intermediary and consumer get their objectives fulfilled, that is farmer get proper price realization in consumer rupee, intermediaries get their required margins and consumer get good service and product at affordable price. Supply chain management and logistics have become the crucial areas of management and national focus. Though India spends over 12 percent of its GDP on logistic and supply chain management customer value provided is unsatisfactory. This area becomes even more important in the sector of agribusiness because most of the agricultural products are perishable and have a very short shelf life. Supply chain management plays an integral role in keeping business costs at a minimum and profitability as high as possible. Supply chain management is defined as the design and operation of physical, management information and financial systems needed to transfer goods and services from point of production to point of consumption in an effective and efficient manner. Bangalore, the capital city of Karnataka is one of the biggest cities of India and is also fastest growing metropolitan and cosmopolitan in nature. Bangalore has a pleasant climate, which is a home place of different religions, castes, occupations, cultures, speaking diverse languages and of different food preferences. It is the IT and BT hub of India, with industrial estates, international air ports, many fruits and vegetable markets and numerous financial and educational institutions. The present study pertains to the Karnataka state in general and Bangalore urban district in particular. Since, in Bangalore city many supply chain formats have opened their outlets at many places. The retail formats have made Bangalore as their focal point of managerial operations many vegetable growing districts surrounded the Bangalore city farmers growing their produce in these surrounding districts bring their produce to wholesale vegetable market and to emerging retail formats established in Bangalore. Keeping this view in order to asses the efficiency and effectiveness of supply chain management strategy followed in vegetable marketing, the following objectives were formed for detailed study. The specific objectives of the investigation are : 1) To study the comparative roles played by the intermediaries in the traditional and modern supply chains in vegetable marketing. 2) To compare the marketing efficiency between traditional and modern supply chains 3) To compare the factors influencing the effectiveness of supply chain in the modern formats as compared to traditional formats. 4) To compare the price received by farmers vis-a-vis price paid by the consumers in the traditional and modern supply chains 5) To identify the problems and expectations of producers in transacting under traditional and modern supply chain formats. To evaluate the objective of the study, multistage random sampling technique was adopted. Mainly three models of Supply chain techniques were selected. They were traditional, co operative and modern Supply chain. At the initial stage farmers were selected in each chain who sold their produce in selected Supply chain. In the second stage, intermediaries involved in the supply chain specially in traditional supply chain of vegetable marketing where large number of intermediaries existed . In the third stage retail formats from each supply chain was selected. Similarly, in the final stage the consumer who purchased the vegetables from each supply chain was selected.

Firstly, in the Traditional supply chain, 20 farmers, 4 intermediaries, 5 traditional retail formats and 20 consumers were selected randomly. Secondly, in Cooperative supply chain, 20 farmers, 5 retail formats and 20 consumers were selected at random that is from the organisations of Hopcoms and Safal working under Cooperative units. Thirdly, in Modern Supply chain, 5 farmers, 5 retail formats and 20 consumers was selected at random from the organisations of modern retail firms such as Subhiksha, Namdhari, Spencer, Reliance, Fabmall. Only 5 farmers were available doing direct business with these formats hence only these 5 farmers were selected. However the total size of the sample with respect to farmers, retail formats in each type of formats was decided keeping in mind the time, resources and availability of sample for the investigator. Thus a total of 45 farmers, 4 intermediaries, 15 retail formats and 60 consumers were selected in aggregate from all the supply chain format models. For the homogeneity only 4 vegetables namely Tomato, Cabbage, Carrot, Capsicum were selected which were commonly delt in large quantities in all the selected models of supply chain for detailed analysis. Primary data regarding the marketing efficiency of the Supply chain for the year 200708 was collected from the farmers with respect to cost of marketing, value added and price received by them. Similarly, the data on cost and return obtained by the market intermediaries as well as by the retail formats were obtained through interview through structured schedule, which contains indicators such as physical losses involved, quantity sold, selling price and commission received by the intermediaries or by any firms. Similarly, the data regarding the roles played by intermediaries and contracting firms, factors influencing the supply chain, problems and expectations of the farmers, retail formats and consumers were also collected through structured schedule by personal interview. Simple conventional method of tabular analysis was used to study the pricing efficiency. Averages and percentage analysis were used to examine the roles played by the intermediaries and contracting firms, factors influencing Supply chain, problems and expectations of the producers, retail formats and consumers in the Supply chain was worked out.

Findings of the study


The most important findings of the study are summarized below. Comparative roles played by the intermediaries and firms in the supply chain The functions performed by the contracting firms were to provide advisory functions and services such as assembling service, grading service, packing services and storage service. Highest percentage of all functions (100%) provided by cooperative supply chain as compared to modern and traditional supply chain because of better network of cooperative organizations with farmer both backward and forward links. Marketing efficiency of different formats in the supply chain In the material used for packing vegetables by different formats in the supply chain indicated that, 100 per cent of farmers in all the vegetables used the plastic boxes to pack vegetables such as tomato, cabbage, carrot and capsicum in modern supply chain whereas in cooperative supply chain it was 75 per cent of farmers in cabbage and 100 per cent in tomato, carrot and capsicum used plastic boxes for packaging. In case of traditional format, the vegetable such as tomato was packed in plastic boxes by 90 per cent of the farmers and 10 per cent of the farmers used the wooden box. But for the other vegetables such as cabbage, carrot and capsicum, 100 per cent of the farmers used the gunny bag to pack the vegetables. This was mainly because of the insistence of the contracting firms to the farmers to pack the vegetables in plastic boxes specially in cooperative and modern formats as compared to traditional formats. Physical losses in the supply chain Physical losses occurred at the wholesaler level in the traditional supply chain only since, no intermediary involved in the other format of supply chain. The percentage of wastage to the total quantity procured was 6.34 per cent in traditional supply chain at farmers

level. However, physical losses at the retail format level in the supply chain was 12.28 per cent, 9.08 per cent and 7.27 per cent to the total quantity procured in the traditional retail format, cooperative retail format and modern retail format level in the supply chain respectively. This may be because at retail level again the vegetables are cleaned and packed after removing the spoiled vegetables. However, it was less in modern retail units format due to better handling facility. Cost incurred in the supply chain Aggregate average cost of marketing per quintal by farmers was Rs. 116.96, Rs. 83.57 and Rs. 42.86 in traditional, cooperative and modern supply chain respectively. This difference in cost was mainly because of the length of the channel. Among the costs incurred by the farmers, the major component was found to be commission charges which was higher in the traditional format. However, it was due to service charges in cooperative supply chain. Whereas, it was less in modern supply chain in which the farmers needs to incur only transportation and packaging costs. Cost and return in the supply chain At the intermediary level in the supply chain on an aggregate level the cost incurred by commission agent and wholesaler was Rs. 11.75 per quintal and Rs. 66.91 per quintal respectively. The net returns were Rs. 55.00 per quintal and Rs. 98.92 respectively to the commission agents and wholesalers. At the retail format level aggregate average quantity handled per day and net returns obtained was highest in cooperative supply chain (40.65 kg and Rs. 1.90 per kg respectively). This was followed by modern supply chain (20.1 kg and Rs. 0.79 per kg respectively) and traditional supply chain (11.47 kg and Rs. 0.633 per kg respectively). All these differences mainly due to the net work of retail outlets and length of the channel in the supply chain. Marketing efficiency of different formats The index of marketing efficiency was found out to be 1.97, 2.10 and 4.32 for traditional, cooperative and modern supply chain respectively. Hence, the index of marketing efficiency of the different formats indicated that modern supply chain was found to be more efficient than cooperative and traditional supply chain because of low operational cost sand physical losses in the supply chain resulted in more producers net price to total gross marketing margins. Disposal pattern of produce Quantity sold per farmer in different supply chain showed that the highest quantity was sold in traditional supply chain that is 18.48 kg than in cooperative and modern supply chains that is 17.33 kg and 7.33 kg respectively because of better network of cooperatives. With higher variation in frequency of sale of vegetables by farmers was found in traditional supply chain than cooperative and modern supply chain. The price per kg received by farmer was very high in modern supply chain that is Rs. 8.70 per kg than traditional supply chain that is Rs. 6.76 per kg. Whereas it was Rs. 7.89 per kg in cooperative supply chain. This was all because of the efficiency in operation by modern format of the supply chain. Pattern of purchases of vegetables per day by different retail formats The quantity purchased by traditional, cooperative and modern retail format on an average was 13.35 kg, 40.65 kg and 18.35 kg respectively. On an aggregate average the value was Rs. 112.10, Rs. 279.42 and Rs. 179.98 involved in the business of traditional, cooperative and modern retail formats respectively. This variation was depending upon the spread of network of retail outlets. Buying management by forms in different formats of the supply chain Traditional retail format purchased the same quantity every time but cooperative and modern retail format purchased based on previous day/week/month sale and demand. This was because of small and individual units does not have a planning and organised way of purchase and selling as compared to cooperatives and modern units as to make this difference in purchase.

Agency from whom they buy was by the intermediaries in traditional retail format of supply chain was directly from farmers in cooperative retail format and in modern supply chain only because of traditional units procure from commission agents or wholesalers of the vegetables on daily or 2 days once basis but in cooperative was units for their procurement was mainly directly from farmers. Pattern of sale of vegetables by different retail formats per day The quantity sold by traditional, cooperative and modern retail format on an average was 10.31 kg, 37.50 kg and 18.80 kg respectively and the total value for the quantity sold on an average was Rs. 122.24, Rs. 375.50 and Rs. 221.58 in traditional, cooperative and modern supply chain respectively. This indicated higher quantity handled by the cooperatives because cooperative are well organized both from the point of procurement directly from the farmers and spread of retail outlet in different parts of the city as compared to other formats of supply chain. Buying pattern of consumers On an aggregate average the quantity purchased by consumers was 0.71 kg, 0.76 kg and 0.61 kg from traditional, cooperative and modern retail formats respectively. The total value spent on quantity purchased in each purchase on an average was Rs. 10.09, Rs. 9.07, and Rs. 9.91 in traditional, cooperative and modern retail formats respectively which depends on the type of vegetables and price at which the vegetable purchased by the consumers. Majority of consumers visited daily and alternate day in cooperative and modern supply chain and it was thrice or once a week in traditional supply chain. Comparison of price received by the farmers vis--vis price paid by the consumers The price spread was highest in traditional supply chain that is 8.31, which was followed by 4.10 and 4.10 in cooperative and modern supply chain. This was because of length of channel the traditional supply chain is performing in marketing vegetables, price spread was high in traditional format as compared to other formats where these working more efficiently.

POLICY IMPLICATIONS
1. The roles played by the different contracting firms with the farmers in production and marketing was performed to fewer extent in general and specially in traditional formats which was essential in any of the supply chain to be worked more efficiently in accordance with the demand of the domestic market in an oragnised format in general and specially in vegetable marketing. Therefore, organized contracting farming activities in the vegetable production and marketing can be encouraged by providing more incentives to the cooperative organisations and companies. 2. The physical losses are more in traditional format as compared to other formats due to less use of modern packaging materials. Therefore all farmer should be made aware about the benefits of use of plastic crates in packaging vegetables and transportation in suitable vehicles in an organized system which may reduce heavy losses and increase the efficiency in operation of vegetable marketing. 3. Price spread was highest in traditional format, as compared to other formats of the supply chain. Hence, it can be reduced by creating a network of farmers, cooperatives and modern formats in marketing of vegetables in general and particularly in high production areas of vegetables with urban market centers on one hand and market information mechanism can be established on the other. 4. As the number of intermediaries get reduced with the organization of growers will lead to more and more contract cultivation and when provided with cold chain facilities will help the farmers with better bargaining power. Which is beneficial to both for consumers and marketing system to operate effectively. 5. Producer member are not well integrated in the supply chain. Hence, by suitably integrating the members of the supply chain and maintaining the production and information flow within the organization will surely help to meet the demand in the market place providing satisfaction to the customers. Hence, the supply of vegetables by farmers to retail formats brings in new form of organizing production based on

consumer demand. This may further gives the scope for organized export business of vegetables.

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APPENDIX I
No : Date : FARMER 1. 2. 3. 4. 5. Name of the respondent Village Taluk Name the vegetables that are grown To whom you sell vegetables : : : : :

6. Disposal of the produce to different agencies Sl. No. Vegetables Frequency / time of sale Qty sold (qtls) Place of sale Agency income sold Price received (per qtl) Total amount Commission Basic Value

7. Are you have an agreement to sell to particular agency Yes/No. If yes Sl. Vegetables Frequency Qty to be Price at No. of delivery delivered which it is at each delivered time

Total value

Total qty delivered in a week

Total amount

8 A. Mode of packing and its costs Sl. Mode of packing No. 1. Gunny bag 2. Wooden boxes 3. Other specify a. b.

Qty packed

Cost incurred a. Labour b. Material

Total cost (per qtl)

Mode of transport

B. Mode of transportation and its cost Qty Distance Hired / Transportation transported covered owned cost per qtl. transport

Total transport cost

Cost incurred Loading charges Total loading charges Unloading charges Total unloading charges

C. Any other cost incurred in selling the produce Item of cost Labour charges for cleaning at farm level Loading and unloading Weighment charges Commission charges Other specify i. ii. iii. Amount (per bag) Total amount Remarks

9. Reason for the sale of produce at a particular agency i.e., where they sell. a. Provide credit facility b. Proximity c. Cut in margins may be through i. Reduction in number of intermediaries ii. Less charges for the service iii. Less physical loss d. Service rendered by them e. Provision for technical guidance f. Getting storage and transport facility by them g. Absence of middlemen h. Spot payment i. Remunerative price j. Correct weight k. Less charges

l. Others specify i. Contract arrangement with them for quantity ii. Contract arrangement with them for quality

iii. Contract arrangement with them for price iv. 10. Problems faced by the farmers a. Far off location of selling unit b. Transportation facility (i) Inadequate (ii) Costly c. Lack of market information d. Malpracices of buyers e. Lack of grading facility f. Lack of packing facility g. Lack of storage facility h. Lack of cold shelf facility i. Lack of financial assistance from any company j. Delay in payment and sale proceeds k. Other specify i. Lack of contracting agencies ii. Dishonoring of contract iii. 11. Expectations of the farmer a. Nearness of selling unit/place b. Good transportation facility c. Market information at right time d. No malpractices should be followed at selling unit e. Good grading f. Good storage facility g. Good packing facility s h. Cold shelf facilities during storage of produce i. Credit facilities by companies j. Immediate payment after the sale of produce k. Presence of contract sales l. Other specify i. ii. iii.

Appendix II INTERMEDIARIES

1. 2. 3. 4. 5.

Name of Respondent Age Education Type of ownership Investment made in business a. Owned funds b. Borrowed funds c. Interest rate on borrowed funds Vegetables handled

: : : : : Individual/partnership / any other

6.

a. b. c. d.

7. 8. 9. Sl. No. I. a. b. II. a. b. c. d. e. f. g. h. i. II. a. b. c. III.

From how long you are in the business

Do you make outright purchases in the field and transport on your own ? What facilities do you provide to the producer who brings his produce for sale Particulars Advisory roles The time of planting Varieties to be planted Extending physical facilities Supplying the pesticides Supplying the seeds Supplying the fertilizers Supplying the credit Procuring at the farmer door steps / Provides the transport facility Are they are grading at farmer level or by trader Quantity procured : is any fixed quantity, if yes, quantity for procurement / any amount Time of delivery of produce and place of delivery of produce by the clients Physical functions Assembling activities activities/ cleaning, grading Yes/ No Qty Price Total value

Packing activities Storage activities Credit facilities

IV. V.

Retailing activities Other specify a. b. c. Do you grade the vegetables ? If yes, what is the basis for it a. b. c. Yes / No Size Colour Freshness

10.

11. Physical loss in different activity i. Assembling and transportation Sl. No. Name of the vegetables % of waste Qty Value % of good grade Qty Value % of qty FAQ Value Remaining % Qty Value

ii. Cleaning and grading Sl. No. Name of the vegetables % of waste Qty Value % of good grade Qty Value % of qty FAQ Value Remaining % Qty Value

iii. Sales and distribution Sl. No. Name of the vegetables % of waste Qty Value % of good grade Qty Value % of qty FAQ Value Remaining % Qty Value

12. Mode of packing and its cost Sl. No. a. b. c. Mode of packing Gunny bag Wooden box Other specify i. ii. Qty packed Cost incurred Total cost (per qtl)

B. Mode of transportation and its cost Mode of transportation Qty transported Distance covered Hired / owned Cost incurred Loading charges Total loading charges Unloading charges Total unloading charges Transportation cost per qtl Total transportation cost

13. Labour employed in marketing Sl. No. Employees Number Nature of work Salary Any other cost Total cost

14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

Weighment charges Commission charges Income tax Licence fee Shop rent (including electricity and other charges Market fee Establishment charges Maintenance charges Taxes paid Any other cost (specify)

a. b. c. d. 24. Vegetable transaction per day A. Purchase / Procurement Sl. No. Vegetable Qty purchased From whom purchased Price at which it was purchased Time or frequency of purchased Total quantity Total value

B. Sales Sl. Vegetable No.

Qty sold

To whom produce was sold

Price at which it was sold

Total value of the product sold

Method of sale

Commission charged Basis Total amount

25. Physical loss in different activity i. Assembling and transportation Sl. Name of % of Qty Value No. the waste vegetables

% of good grade

Qty

Value

% of qty FAQ

Value

Remaining %

Qty

Value

ii. Cleaning and grading Sl. Name of % of No. the waste vegetables

Qty

Value

% of good grade

Qty

Value

% of qty FAQ

Value

Remaining %

Qty

Value

iii. Sales and distribution Sl. Name of % of No. the waste vegetables

Qty

Value

% of good grade

Qty

Value

% of qty FAQ

Value

Remaining %

Qty

Value

26. Problems faced by intermediaries A. Commission agent 1. Lack of transportation facility 2. 3. 4. 5. 6. 7. 8. 9. B. 1. 2. 3. 4. 5. 6. 7. 8. 9. Absence of grading facility Low sale absorption capacity of market Too much price fluctuation Lack of storage facilities Lack of knowledge about neighbouring market High tax payment High licence and other market fee Other specify i. ii. Wholesaler Wholesale market is too conjusted High rent charges Lack of transportation facility Absence of grading facility Low sale absorption capacity of market Lack of storage facilities High tax payment Too much price fluctuation Other specify i. ii.

Appendix III TRADITIONAL RETAIL OUTLETS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. a. b. c. d. 11. 12. Name Place Year of establishment Owned /rented/leased Ownership of the business If owned average rent for the same in that area If leased Initial investment incurred to set up the shop Vegetables usually handled Do you have cold shelf facility ? Rent Electricity Maintenance Others What are the taxes you pay to the Govt. How much Employment pattern : : : : : : : : : : : : : : : : Number Family Male Female Hired Male Female 13. Do you grade vegetables If yes, basis of grading 14. Do you incur any transportation cost ? If yes, total Cost. Rs. _________ / Unit 15. Do you incur any packing cost ? If yes Total cost Rs. __________/Unit 16. Cost of transaction for the retailers : Yes / No. : : : Yes / No Yes / No Salary / month (Rs.) Rs. Yes / No. Sole proprietor / Partnership Rs. Rs. _______ Per _______Years Rs. ___________

a. Vegetable purchase Sl. No. Name of vegetables Qty purchased Price unit Total value Frequency of purchased From whom purchased Qty purchased Values per month

b. Vegetable sold : Sl. No. Name of vegetable Qty sold Price / unit Total value Qty unsold Wastage Qty Value To whom sold Remarks Qty Value per per month month

17. Total quantity of selected commodities handled daily and their value Sl. No. 1. Particulars Total quantity procured daily i. ii. iii. iv. Total quantity sold daily i. ii. iii. iv. Total cost per day including cost of procurement Total cost per day including sale of procurement Commodity Qty Price Value

2.

3. 4.

18. Planning for procurement of vegetables (or) How do you decide about the quantity of stocks to be purchased Sl. No. I. Particulars Buying activities Buy the same quantity every time Buy based on previous days/weeks/months sale Buy based on coming days / weeks / months expected demand II. Agency from whom he buys : Tomato Qty Value Qty Value Qty Value Qty Value

i. Farmers ii. Intermediaries (wholesaler/commissi on agent) III. Inventory maintained i. Every day ii. Every week

19. Do you provide any facilities to the producer who brings his produce for sale Sl. Particulars Yes/No Qty Price No. I. a. b. II. a. b. c. d. e. f. g. II. a. b. c. III. IV. V. Advisory roles The time of planting Varieties to be planted Extending the physical facilities Supplying the seeds Supplying the pesticides Supplying the fertilizers Procuring at the farmer door steps / provides the transport facility Are they are grading at farmer level or by trader Quantity procured is any fixed quantity procurement / any amount Time of delivery of produce and place of delivery of produce Physical functions Assembling activities / cleaning, grading activities Packing activities Storage activities Credit facilities Retailing activities Other specify i. ii. iii.

Total value

20. a. b. c. d. e. f.

Problems faced by the retailer Inadequate physical facilities Absence of grading facilities Absence of storage facility Lack of transportation facility Price fluctuation (wide and low) Non-availability of suitable weighing facilities

g. h. i. j. k.

Failing in assessment of demand Procurement problems More physical loss of produce / storage loss Timely supply Other specify i. ii. iii.

21. a. b. c. d. e. f. g. h. i. j. k. l.

Expectation of the retailer Good physical facilities Less charges Less price fluctuation Good grading, storage and packing facility Good transportation facility Meeting he customer requirement / Rendering all customer service Right planning for procurement Less handling loss of produce Right market information Timely availability of produce Timely supply to consumer Assessing the demand at right time

Appendix IV COOPERATIVE RETAIL OUTLETS (HOPCOMS/SAFAL) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Name Place Vegetable usually handled Transportation cost What are the taxes you pay to the Government Packing cost Maintenance cost Labour charges Loading and unloading charges Cleaning charges Any other cost a. b. c. 12. Transaction of vegetables by cooperative outlets : : : : : : : : : : : :

a. Vegetable purchased Sl. No. Vegetables Qty Price / unit Total value From whom From where Frequency of purchase

b. Vegetable sold Sl. Vegetable Qty No. sold

Price / unit

Total value

Qty unsold

Wastage Qty Value

To whom sold

Qty procured per month

Value procured per month

14. Total quantity of selected commodities handled daily and their value Sl. Particulars Commodity Quantity No. 1. Total quantity procured daily i. ii. iii. iv. 2. Total quantity sold daily i. ii. iii. iv. 3. Total cost per day including cost of procurement 4. Total cost per day including sale of procurement

Price

Value

15. How do you decide about the quantity of stocks to be purchased Sl. No. I. Particulars Qty Buying activities Buy the same quantity every time Buy based on previous days/weeks/months sale Buy based on coming days / weeks / months expected demand Agency from whom he buys : iii. Farmers iv. Intermediaries (wholesaler/commissi on agent) Inventory maintained i. Every day ii. Every week 16. Do you provide any facilities to the producer who brings his produce for sale Sl. No. I. a. b. II. a. b. c. d. Advisory roles The time of planting Varieties to be planted Extending the physical facilities Supplying the seeds Supplying the pesticides Supplying the fertilizers Procuring at the farmer door steps / provides the transport facility Particulars Yes/No Qty Price Total value Value Qty Value Qty Value Qty Value

II.

III.

e. f. g. II. a. b. c. III. IV. V.

Are they are grading at farmer level or by trader Quantity procured is any fixed quantity procurement / any amount Time of delivery of produce and place of delivery of produce Physical functions Assembling activities / cleaning, grading activities Packing activities Storage activities Credit facilities Retailing activities Other specify i. ii. iii.

17. a. b. c. d.

Problems faced by the cooperative retailer Inadequate physical facilities Absence of grading facilities Absence of storage facility Lack of transportation facility / private contract transporters availability Price fluctuation Procurement problems Private competitors in the market Failing in assessment of demand Handling / storage loss Timely supply Failing in rendering service to customers Other specify i. ii. iii.

e. f. g. h. i. j. k. l.

18. a. b.

Expectation of the retailer Good physical facilities Less price fluctuation

c. d. e. f. g. h. i. j. k.

Good grading, storage and packing facility Good transportation facility Good procurement planning Timely availability of produce Promotional tools to e taken up Less competitors from market Timely supply to consumer Assessing the demand at right time Other specify

Appendix V MODERN RETAIL OUTLET 1. 2. 3. 4. 5. 6. 7. 8. 9. Name Place Year of starting Owned/Rented / Leased If leased Number of staffs Salary / Month (Rs.) Vegetable handled Recurring cost (Rs.) Rent Electricity Maintenance Other 10. 11. 12. Transportation cost Packing cost Do you grade vegetables If yes, basis of grading 13. 14. 15. Loading and unloading charges Cleaning charges Any other cost a. b. 16. Do you have cold shelf facility Transaction of vegetables by company : : : : : : Yes/No : : : : : : : : Rs. _____ per _______ years : : :

a. Vegetable purchased Sl. No. Vegetables Qty Price / unit Total value From where Frequency of purchase

b. Vegetable sold Sl. No. Vegetable Qty Price / unit Total value Qty unsold Wastage Qty Value To whom sold Qty procured per month Value procured per month

18. Total quantity of selected commodities handled daily and their value Sl. No. 1. Particulars Total quantity procured daily i. ii. iii. iv. Total quantity sold daily i. ii. iii. iv. Total cost per day including cost of procurement Total cost per day including sale of procurement Commodity Quantity Price Value

2.

3. 4.

19. How do you decide about the quantity of stocks to be purchased Sl. No. I. Particulars Qty Buying activities Buy the same quantity every time Buy based on previous days/weeks/months sale Buy based on coming days / weeks / months Value Qty Value Qty Value Qty Value

II.

III.

expected demand Agency from whom he buys : i. Farmers ii. Intermediaries (wholesaler/commission agent) Inventory maintained i. Every day ii. Every week 20. Do you provide any facilities to the producer who brings his produce for sale

Sl. No. I. a. b. II. a. b. c. d. e. f. g. II. a. b. c. III. IV.

Particulars Advisory roles The time of planting Varieties to be planted Extending the physical facilities Supplying the seeds Supplying the pesticides Supplying the fertilizers Procuring at the farmer door steps / provides the transport facility Are they are grading at farmer level or by trader Quantity procured is any fixed quantity procurement / any amount Time of delivery of produce and place of delivery of produce Physical functions Assembling activities / cleaning, grading activities Packing activities Storage activities Credit facilities Other specify i. ii. iii. Problems faced by the company Procurement problems Price fluctuation Handling and storage loss Absence of wide range of products Quality of produce Timely availability of produce Failing in assessment of demand Timely supply Timings Lack of cold shelf facility

Yes/No

Qty

Price

Total value

21. a. b. c. d. e. f. g. h. i. j. k. l. m.

Lack of transportation, packing, storage and grading facility Maintaining items other than vegetables Other specify

i. ii. 22. a. b. c. d. e. f. g. h. i. j. k. l. m. Expectation of the retailer Very good procuring facility Cut in margin Wide range of products for customer satisfaction Less storage and handling loss Good cold shelf facility More promotional tools to be taken Credit sales to be encouraged Assessment of demand for the product in different days and occasions Good quality of produce Good store design and visual merchandising Timely availability of produce Good transportation, packing, storage and grading facility Other specify i. ii. iii.

Appendix VI CONSUMERS 1. 2. 3. 4. 5. 6. Name Age : ________ Yrs _________ Occupation Sex Education Family size Adults Children 7. 8. 9. 10. No. of people employed Family income per month (Rs.) Monthly expenditure on vegetables (Rs.) : From where you are buying the vegetables Particulars Qty Local vendors HOPCOMS SAFAL Modern retail outlets Value Qty Value Qty Value Qty Value : : : : <10,000 / 10-15000 / 15-20000 / 20-25000/ 25-30000 / 30-40000 / >40000 : : : : : : Employee / Employer Male / Female Primary / School / High school / PUC / Graduate / PG Male Female

Sl. No.

11. 12.

Frequency of purchase Amount spent on vegetables (Rs.) in each purchase for selected commodities

Daily / Once a week / Twice a week Vegetables Price

13. 14. a. b. c.

Mode of payment Reason for purchasing vegetable at a particular outlet Timely availability Proximity Quality of produce

: : : : :

Cash / Card

d. e. f. g. h. i. j.

Timing Common phobia to enter multinational stores Visual merchandising and store design Promoted by promotional tools and credit sales Advertisement Wide range of products are available Price Reasonable High Discount

: : : : : : :

k. l. m.

Good services rendered by the outlets Vegetables which are very good Others specify i. ii. iii. Better suited time

: : :

15. a. b. c. d. e. f. g. h. i. j. k. l. m.

Problems faced by the consumers No timely availability of produce Absence of wide range of products Very high prices Quality of product is unsatisfactory Unsatisfactory responses rendered at a retail outlet and services

No proper promotional tools and sales on credit Inconvenience / not nearness of the retail outlets Unhygenic condition No proper store merchandising No proper packing No facility for feed back Timings of the retail outlet Other specify i. design and visual

ii. iii. Expectation of consumers 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Timely availability of produce Less price Good quality of produce Convenience/nearness of retail outlets Maintain hygienic condition Good service and response by retailers Availability of wide range of products Good sore design visual merchandising Good packing facility More credit sales Timings of retail outlets should be extended Other specify i. ii. iii.

SUPPLY CHAIN MANAGEMENT IN VEGETABLE MARKETING : A COMPARATIVE ANALYSIS


SHILPA K. 2008 BASAVARAJ BANAKAR MAJOR ADVISOR

ABSTRACT
Supply chain management is more important in the sector of agribusiness because most of the agricultural products are perishable and have a very short shelf life. Bangalore city was selected as the study area because of different formats practicing supply chain. Mainly three models of supply chain techniques were selected, they were traditional, cooperative and modern supply chain. A total of 45 farmers, 4 intermediaries, 15 retail formats and 60 consumers were selected in aggregate from all the supply chain format models. For the homogeneity of the products in which these formats dealing 4 vegetables namely, tomato, cabbage, carrot and capsicum were selected because there were commonly delt in large quantities in all the selected models of supply chain. Among the sample farmers highest marketing cost was incurred by farmers in traditional format of the supply chain i.e., Rs. 1.6 per kg as compared to cooperative and modern supply chain i.e., Rs. 0.83 per kg and Rs. 0.46 per kg respectively. The intermediaries were involved only in the traditional supply chain. Among the retail formats, the cost incurred per kg of vegetables by traditional, cooperative and modern supply chain was found out to be Rs. 1.63, Rs. 1.01 and Rs. 0.80, respectively. But, the net return for one kg of vegetables was highest for cooperative retail format i.e., 1.90 followed by modern and traditional retail format Rs. 0.79 and Rs. 0.63 respectively. The index of marketing efficiency was found out to be 1.97, 2.10 and 4.32 for traditional, cooperative and modern supply chain respectively. Hence, modern supply chain was found out to be more efficient than cooperative and modern supply chain. With highest marketing cost incurred by farmers in traditional supply chain as compared to cooperative and modern supply chain. At the same time modern and cooperative supply chain is having the smallest price spread of Rs. 4.10 per kg and Rs. 4.10 per kg respectively. Hence these are found out to be efficient when compared to that of traditional supply chain which is having highest price spread i.e., Rs. 8.31 per kg. Hence it is advisable to the farmers to sell their produce through modern supply chain and cooperative supply chain.