INTRODUCTION

 India is called the spice bowl of the world as it cultivates 63

out of the total of 107 spices identified in the world

 India is the largest producer, consumer and exporter of

spices in the world with 48% share of world trade in spices

 About 65% of total Chilies produced in India are traded

from 6 major markets, Guntur, Warangal and Khamam in
Andhra Pradesh
MAJOR FUNCTIONARIES IN SUPPLY CHAIN
 Regulated Market
 Producer

 Commission Agent

 Trader/Exporter

 Wholesalers

 Processors

 Retailer
SUPPLY CHAIN -1
PRICE SPREAD IN SUPPLY CHAIN-1
Price spread of supply chain-1

26%
producer share
traders share
49%
whole saler's share
Retailer's share
13%
marketing cost

6%
6%

Marketing cost break up

27% 30% Producer level

trader level
wholesale level
Retailer level
18%
25%
SUPPLY CHAIN -2
PRICE SPREAD IN SUPPLY CHAIN-2
Price Spread of Supply chain -2

23%
producer share
40%
Processor’s share
Retailer's share
20% marketing cost

17%

Marketing cost break up

28% Producer share

44% Processor’s share
Retailer Share
28%
COMPARISONS OF SUPPLY CHAINS
 Study of marketing cost and marketing margins in supply chain 1
reveal that marketing cost in marketing margins are 50% and 40%
respectively

 Study of marketing cost and marketing margins in supply chain 2

reveal that marketing cost in marketing margins are 50% and 60%
respectively

 This study reveals that supply chain 2 is more efficient than supply
chain 1 because more value goods are delivered to the consumer at
lower marketing cost

 The study shows that farmers who bring good quality chillies to
market prefer Supply chain-II to supply chain-I. But farmers who
bring poor quality, discolored chillies, are preferring supply chain-I
CONSTRAINS FACED BY PRODUCERS
(1) Poor transportation facilities.

(2) Poor market information

(3) Delay in sale of produce.

(4) Poor weighing procedures.

(5) Unfair practices during in open auction.

(6) Delay in payments from agents.

(7) Collection of excess commission.

(8) Lack of storage facilities at market yard.

(9) Poor finance for ware house receipts during lean market prices.

(10) Lack of facilities for farmers at market yard

CONCLUSION
1. Poor understanding of Volatile Price fluctuations, which affect the benefit of farmers
and middle men are being profited due to this.

2. The Traders take major share in chilli supply chain due to which Producers are not
able to get there actual share in the consumer’s rupee.

3. The present supply chain which is dominated by Supply chain-I is inefficient, because
the farmer is getting a better price for the same quality of produce in Supply chain-
II.

4. There is no value addition involved in supply chain-I which is the major supply chain
at present.