MORE THAN 1,300,000 TONNES OF FOODGRAIN

WORTH MILLIONS OF DOLLARS

WENT ROTTEN IN STORAGE OVER THE PAST

DECADE IN INDIA,

FOOD CORPORATION OF INDIA (FCI) OFFICIALS

ADMIT.
"SURPRISINGLY, OF THE TOTAL WASTAGE
ALMOST 50% OF THE FOOD GRAIN WAS
DAMAGED IN PUNJAB,

ONE OF THE LEADING STATES IN

AGRICULTURAL PRODUCTION.

AND THERE'S NO HISTORY OF FLOODS OR

NATURAL CALAMITIES IN PUNJAB
More than 72 per cent of the vegetable and
Fruits are wasted in the absence of proper
retailing,
Agriculture Minister Sharad Pawar

The sector is constrained by widespread

fragmentation in the supply chain,
low productivity levels, and huge post
harvest losses arising out of inadequate
storage, cold chain and transport
infrastructure, logistics and supply chain
management,
Indias Food grain wastage is more than
UKs Total consumption

India stands No 1 in Production of Fruits and

Vegetable together

It contributes to 10% of the worlds Fruit

production & 14 % of the Vegetable production

OF EVERY 10 FRIUT 1 IS FROM INDIA

OF EVERY 7 VEGETABLE 1 IS FROM INDIA
More than 72 per cent of the vegetable and
Fruits are wasted in the absence of proper
retailing,
Agriculture Minister Sharad Pawar

OF EVERY 4 F&V PRODUCED 3 ARE

WASTED / TROWN / ROTTEN OR NOT
CONSUMED
India has 5 to 6 middlemen in fruits
and vegetable trade,

while all developed counties has

2 to 3 middlemen in the supply chain
Farmer

Retailer

Customer
In bridging the farm gate to the dinner plate, more and
more Indian retailers are now adopting the farm to fork model.

Most of the retailers are in the process of putting up elaborate

logistical chains to enable a smooth transition of goods from the
farm to the consumer.
Farm to fork, as this model is known, aims at minimizing the steps
from the farmer to the retail store.

A farm-to-fork model either sets up a logistical chain owned by the

Retail Company or outsourcers it to a logistics company.
The chain includes small wholesale markets, or mandis,
where the farmer can come and get a good price for his produce.

This produce is then carried directly to the nearest supermarket of the

chain, or the warehouse from where it is shipped to the cities.

There is an imperative need for synergy in the pre-harvest, harvest and

post-harvest process to bring in value addition to the efforts of
the farmers.
 Market Yard
Actual Grower Farm
collector
Regional
Conglomerate
Local Market Yard

Retailer

APMC
Broker
Customer
Semi -Wholesaler
In order to successfully run the Farm to form model the elimination
of middlemen like farm collector, regional conglomerate and
semi-wholesaler is essential.

The farmer brings the produce to the collection centre where the
generally payment is in cash.

The produces are graded / sorted / peeled / cleaned / cut / de-husked

/ chopped etc.

Then transported to the stores via Distribution Centre (DC) through

APMC market
 Market Yard
Actual Grower Farm
collector
Regional
Conglomerate
Collection Centre

Retailer

Wet
Customer Distribution Centre
Semi -Wholesaler
Actual Grower
Reliance
C. Centre

Reliance Customer

Reliance Store

Reliance DC
 Market Yard
Actual Grower

Collection Centre

Collection Centers Pan India (188) as on Dec 2010

Some Challenges still need to be overcome.

The volume of the produce, inconsistency in terms of availability,

size, shape, color and clearness (spotlessness).

Stringent rules in most of the APMC (Agriculture Produce Market

Committee) or commonly known as Market yard, long waiting
period in Octroi nakas

Non-standardized and expensive packing material

Unskilled human capital

Fragmented suppliers

An inconsistent and unpredictable weather condition makes this

models attempt unsuccessful.
A survey reveals that a farmer or a grower gets 1/15th to 1/10th
of the value paid by the consumer (exceptions are Alphonso
Mangoes, Grapes, exotic vegetables etc; where the
grows earns 1/4th to 1/5th of the consumers purchase price)

The fast moving SKUs in fruits are 20 to 25, while the veggies
have around 30 to 40 (except onion, potato and tomato)

When we purchase Tomatoes at Rs 20 per kg from a hawker,

the grower gets meager value of Rs 0.75 to Rs 2.00, while a
retailer earns around Rs 2.00 to Rs 4.00.
Major amount is swiped by the transportation and middlemen.
If a farm to fork model if successful there will be a win-win situation
for both the growers and the retailers.

In Tomatoes, assuming the grower-retailer consortium, further

assuming that there is no contract farming and not air lifted, average
selling price for the grower will be to the tune of Rs 2.50 to Rs 3.50.
While landing cost of the retailers will be Rs 11.00 to Rs 14.00
(depending on the distance).

In such situation retailers can safely mark down and can adopt a
leadership pricing.
The gist of this model is based on the backward integration of
the retailer.

Taking into consideration the constraints like of widespread

fragmentation in the supply chain, low productivity levels,
and huge post harvest losses arising out of inadequate storage,
cold chain and transport.

The model can be successfully only if a retailer has

1) Pan Indias penetration of 3000 to 4000 stores of around

3000 sq ft, with a dedicated F&V sections of 300 sq.ft in
each store

2) A strong quality conscious grower- retailer consortium.

3) Catering to not more than 15 to 20 fruits and vegetables.

FLOWER TRADE
IN HOLLAND/
NETHERLAND
 Some Challenges still need to be
Overcome
Regulatory Barriers

Labour Legislation
( Shop & Estb. Act, Minimum Wages, Maternity Benefits Act etc.)

Differential Tax System

( VAT, Sales Tax, Octroi, Entry Tax)

Stringent compliance of APMC

Skilled Human Capital

Fragmented Suppliers

Effective Private Label Strategy

 Thanks !
Created and conceived by : Sugam Chaubal
9821 252542