Project Report Emap

A

PROJECT REPORT

ON

“Study on Establishment of a vegetable Trading unit

(tomato) at Narayangaon, Pune.”

BY

Mr. Suraj Pawar

Submitted To

Mr. Mangesh Kadam

(MSAMB)

PGDM-ABM 2012-14 BATCH

CENTRE FOR MANAGEMENT EDUCATION

VAIKUNTH MEHTA NATIOANL INSTITUTE OF CO-OPERATIVE MANAGEMENT,

PUNE

1Suraj Pawar [email protected]

CERTIFICATE

This is to certify that Mr. SURAJ PAWAR, a bonafide student of PostGraduate Diploma in Agri- Business Management (2012-2014), VAMNICOM,Pune did his Entrepreneurship Management of Agri Projects under myGuidance. He has successfully completed his project entitled “Study onEstablishment of a vegetable trading unit (tomato) atNarayangaon (Pune).” towards the partial fulfilment of his course .

DATE Mr. Mangesh Kadam

PLACE: Pune (MSAMB)


ACKNOWLEDGEMENT

This acknowledgement is not merely a catalogue of names but an expression ofdeep sense of gratitude to all those who helped me in this project & for givingtheir assistance for completing the project successfully.I feel my immense pleasure in expressing my sincere and profound sense ofgratitude to Mr. Mangesh Kadam, for his inspiring and affectionate guidance,Unending benevolence and constant encouragement during the course of thisproject.It is pleasure to acknowledge my sincere thanks to Mr. Reddy (Hoc)for his encouragement and guidance throughout the project.I would like to thanks, Mr. D. Ravi (Joint Program Director), Mr. V. Sudhir, &Mr Mayank Bharadvaj PGDBM, VAMNICOM, Pune for providing necessaryhelp during the course.Indeed words fail to express my profound sense of gratitude and heartfeltindebtedness to my beloved parents.I am also thankful to all of them who are directly or indirectly involved indriving this project to a success.

Date: (SURAJ PAWAR)

Place: VAMNICOM, Pune


TABLE OF CONTENTS

Serial No. Contents Page No.

1. Executive Summary

2. Industry Scenario

3. Business Plan

4. Summary

5. Case study

6. Questionnaire



Need for the project:• Help farmers get best prices.• In Maharashtra the wastage attributed to the lack of proper andsufficient logistics is nearly 70 per cent.• The availability of tomato & coriander is in ample amount.• Cultivator who produces just a couple of kilograms of tomato &coriander, can leave his/her produce there and get instant payment.• Current private sector initiatives are very few.• Booming of retail (vegetable) sector in india.

Title – “Study on Establishment of a vegetable trading unit (tomato, coriander) atNarayangaon(Pune).”

Objectives-1) To study current supply chain scenario of tomato & coriander from farmers tomandi.2) To study & enlist requirement of established / branded organized retail playerin pune.3) To study feasibility of setting up a trading unit for tomato & coriander.4) To prepare bankable project report on the basis of data collected & analyzedfrom objectives.5) To study one case.

Methodology:

1. RESEARCH DESIGN:For the purpose of this project Descriptive Research Design will be followed. Itwill involve In-depth Personal Interview of the identified respondents during thesurvey. The respondents identified would be farmers & organized retailer. Thisresearch design will provide insights and understanding of the trading unit.

2. SAMPLING TECHNIQUE:The sampling method followed will be convenient sampling.

3. SAMPLING UNITS & SIZE:Sampling unit will be farmers 5Organised retailer 5

4. SOURCE OF DATA:

Σ Primary data:6

Suraj Pawar [email protected]

A structured questionnaire will be prepared to collect primary data from thesurvey of Farm owners, organized retailers.

Σ Secondary data: The sources of secondary data used would be:Internet – Various articles and reports are collected from the internet to provideinsights about the projec


Introduction

Tomato ranks third in priority after Potato and Onion in India but ranks second after potato in the world. India ranks second in the area as well as in production of Tomato.

The prices of agricultural commodities have jumped by up to 300 per cent fromthe wholesale market to consumers’ tables due to short supply of tomato &coriander.Normally, the difference goes up to 300 per cent only in abnormalcircumstances. Apart from the delayed monsoon, massive wastage in transitand involvement of a series of middlemen, obviously for making profit at everylayer, are resulting in such prices.Our team’s physical checks in wholesale and retail markets reveal that amonglarger metropolitan cities, the price difference in Mumbai is the highest,followed by New Delhi. These are as high as 200-300 per cent in mostvegetables and grains and pulses. In other metros, prices are higher by 50-100per cent from wholesale to retail. Organised retail chains are no different. Inmost organised stores, prices have been found near those prevailing in retailmarkets. In pune, most commodities come from outside, it being an island city.WhyRapidly perishable essential commodities like vegetables involve high risk inhandling and transportation. Hence, their cost of carry remains always higher.Also, handling of such commodities, especially in transit and wastage,thereupon, is abnormally high. Consequently, inflation in these is felt only inretail outlets, despite a very normal price in wholesale mandis. Farmers getaround 50 per cent of the wholesale price.

Since it is impossible to visit mandis for common consumers and pickcommodities in bulk (vegetables are not sold in a quantity below five kg andgrains in less than a quintal in Narayangaon mandi), due to the threat of


spoilage, they collect vegetables in relatively small quantities (0.25 - 0.5 kgaverage sales) from grocery-retailers in the vicinity.

According to Mahindra meher, deputy secretary, Agricultural ProduceMarketing Committee (APMC), Narayangaon, the price for retail consumersworks out higher due to factors other than the wholesale price. He saysretailers suffer a loss of nearly 30 per cent in the weight of rapidly perishablevegetables like cabbage, cauliflower and tomatoes, due to poor handling andspoilage. To keep these looking fresh, retailers generally polish each piece oftomato and chop the outer leaves of cabbages and cauliflowers.

Also, prices of every commodity for retailers are determined by the quantity ofprocurement and the area of sales. For example, in posh areas, the retail priceof every commodity is quoted higher compared to a middle class locality.Other factors satish bankar, president, Wholesale Vegetable Marchants’ Association, Narayangaon, however, feels retailers generally factor in unavoidable additional expenses, including mandi tax, transportation charges from the wholesale to the retail market and labour cost, for arriving at the retail price. Roadside hawkers of vegetables have to factor in unofficial expenses as well.

For coarse cereals and other bulk consumables, transportation and labour costhardly matter, due to the large quantity of purchase. For consumers, however,the price of coarse cereals, sugar and pulses rises at least 50 per cent.Future Group buys tomato and coriander from Narayangaon mandis for itsstores. If tomato costs Rs 2 in Nashik, by the time it reaches stores in pune,the price becomes Rs 14. “There are all kinds of people involved. There arefarmers, intermediaries, mandi, next mandi, APMC, through whom thecommodities pass. Then, there is transportation and wastage,” says a Futuregroup executive.

According to a Boston Consulting Group study in 2011, the supply chain ofvegetables such as tomatoes has five levels between farmers in Narayangaon inMaharashtra (known for tomato cultivation).The chain involves a farmer,aggregator, market trader, wholesaler, sub-wholesaler and retailer, before thevegetable reaches the end-consumer. In the process, 30 per cent is farmerrealisation, 24 per cent is value addition such as sorting and grading, 23 percent is leakages and another 23 per cent is gross profit.


“Brokers buy at cheap rates and sell at a high price. They do not allow demandand supply factors to determine prices,” the Future Group executive said.Explaining the rationale for high pricing, another retail executive of ahypermarket chain says a farmer sells a cabbage for Rs 1 or Rs 1.50 to a localbroker, who sells it at Rs 7-8 to a mandi broker, who sells it at Rs 16-17 to theretailer, who sells it to the final consumer at Rs 20. “We buy tomatoes fromNaraysangaon APMC. Per cart we pay about Rs 18 for transportation, we alsokeep a margin of almost 50 per cent, in addition to the prevalent mandi tax.These levies make commodities costlier for retail consumers,” said Sajid Ansari,a pune-based retailer.

Indian Scenario


There is a sizeable increase in acreage and production of tomato in India. There is an increase from 596.0 thousand ha in 2006-07 to 865.0 thousand ha in 2010-11, while in terms of production it has increased from 10055.0 to 16826.0 thousand tons. Showing the Area, Production and Productivity of Tomato in India

YEAR Area (000’ ha) Production ( 000’ tons)

Productivity (tons/ha)

2006-07 596.0 10055.0 16.9 2007-08 566.0 10303.0 18.2 2008-09 599.0 11149.0 18.6 2009-10 634.4 12433.2 19.6 2010-11 865.0 16826.0 19.5

World Scenario The major tomato growing countries are China, USA, Italy, Turkey, India and Egypt. Total area under tomato is 4582438 thousand ha with production of 150513813 thousand tons and with productivity of 32.8 tons/ha. The latest area, production and productivity of major tomato growing countries in 2010 - 2011 is given below

Major Tomato Producing Countries In The World (2010-11) Country Area

(‘000ha) Production (‘000 Tons)

Productivity (tons/Ha)

% Share Of World Production

China 871235 41879684 48.1 28 India 865000 16826000 19.5 11 U S A 159200 12902000 81.0 9 Turkey 304000 10052000 33.1 7 Egypt 216385 8544990 39.5 6 Italy 118822 6024800 50.7 4 Iran 146985 5256110 35.8 3 Spain 58300 4312700 74.0 3 Brazil 60772 3691320 60.7 2 Mexico 98189 2997640 30.5 2 Others 1683550 38026569 22.6 25 World Total 4582438 150513813 32.8 100


Major Producing States with Production of Last Three Years

Area, Production and Productivity of Leading Tomato Growing States in India

STATEWISE AREA, PRODUCTION AND PRODUCTIVITY OF TOMATO State AREA IN 000' HA PRODUCTION IN

000' MT PRODUCTIVITY HA/MT

% Share in Production

2008-09 2009-10 2010-11 Area Producti

on Pdy. Area Producti

on Pdy. Area Producti

on Pdy.

Andhra Pradesh

74.10 1408.10

19.00 87.00 1652.10

19.00 296.30 5926.20

20.00 35.22

Karnataka

53.40 1573.80

29.50 48.30 1580.00

32.70 51.20 1756.70

34.30 10.44

Orrisa 101.10 1360.50

13.50 102.90 1394.70

13.60 96.60 1367.20

14.10 8.13

Maharashtra

33.00 732.30 22.20 50.00 1112.50

22.30 52.00 738.00 14.20 4.39

West Bengal

52.30 999.70 19.10 53.50 1050.00

19.60 54.10 1063.70

19.60 6.32

Bihar 46.40 1037.20

22.40 46.50 1043.70

22.40 46.80 1056.20

22.60 6.28


Gujarat

30.50 746.20 24.40 33.80 841.30 24.90 38.80 978.40 25.20 5.81

Chhatishgarh

39.20 420.40 10.70 41.30 600.60 14.50 42.90 627.90 14.60 3.73

Tamilnadu

0.00 0.00 0.00 26.10 519.10 19.90 27.20 580.60 21.40 3.45

Jharkhand

21.80 436.10 20.00 21.80 436.20 20.00 22.30 401.60 18.00 2.39

Others 147.20 2434.70

16.50 123.20 2203.00

17.90 136.60 2330.00

17.10 13.85

TOTAL 599.10 11148.80

18.60 634.40 12433.20

19.60 864.90 16826.40

19.50 100.00

Distribution of produce from primary to terminal market

Most of the tomatoes are produced in Andhra Pradesh, Orissa, Karnataka and Maharashtra.


TThe major markets of tomatoes are Kurnool, Prakasam, Bangalore, Belgaum, Nasik, Pune, Sangli and Nagpur.

From above markets tomatoes reach markets of Mumbai, Bhopal, Lucknow, Delhi etc for further distribution.

11. Exports and export potential

A. Domestic Strengths for Exporting Tomato Domestic strengths for exporting Tomatoes are given below:

India stands at fourth position in production of tomatoes next to China, U.S.A. And Turkey.

Maximum production of tomatoes takes place in Andhra Pradesh, Orissa, Karnataka, Maharashtra, West Bengal, Bihar, Gujarat etc.

Tomatoes are available for export throughout the year. High yielding F1 hybrids are being cultivated by farmers on a quite good scale There is excellent research support from all the SAUs and National Research Institutes like IIHR, Bangalore and IIVR (Indian Institute of Vegetable Research), Varanasi.

Exports Export of tomatoes has increased from 1, 34,845.15 tons in 2007-08 to 2, 66,986.38 tons in 2011-12. A significant increase has been recorded of more than 97 %. Export of Tomatoes in Last Five Years

Years Qty. (ton's) Value(in Rs. Lakh) 2007-08 1,34,845.15 15290.78 2008-09 1,24,617.22 12766.2 2009-10 1,05,861.62 10324.98 2010-11 65872.26 11509.98 2011-12 2,66,986.38 47030.5


Countries Wise Export of Tomato from India

Export of Tomato (HS Code : 07020000 ) Qty. in MT , Value In Rs. Lacs Countries 2009 -10 2010-11 2011-12 % Share in

Value Qty. Value Qty. Value Qty. Value Pakistan 74,716.1

3 7,284.23 3,708.91 340.56 207,082.

83 37,045.89

78.77

U Arab Emts

10,136.64

1,145.65 31,177.92

7,478.49 25,385.00

4,772.29 10.15

Bangladesh Pr

17,002.52

1,674.79 19,733.26

2,048.16 23,389.92

3,859.06 8.21

Nepal 2,311.95 121.26 3,268.88 227.31 5,439.14 573.03 1.22 Saudi Arab

0 0 2,261.47 539.39 967.74 269.71 0.57

Maldives 912.65 55.51 2,604.19 148.82 2,761.14 229.03 0.49 Thailand 280.26 195.99 2,209.19 532.01 827.97 207.29 0.44 Congo P Rep

0 0 0 0 830.5 24.44 0.05

Kuwait 0 0 126.01 29.89 46 11.94 0.03 U S A 0 0 61.62 5.85 85.53 8.69 0.02 Other Countries

193.86 7.54 720.81 159.5 170.61 29.13 0.06


Total 105556.95

10324.29 65,872.26

11509.98 266,986.38

47,030.50

100


Business Plan:

A written document that describes in detail how a new business is going toachieve its goals. A business plan will lay out a written plan from a marketing,financial and operational viewpoint. Sometimes a business plan is prepared foran established business that is moving in a new direction.A business plan includes a description of a company or small business, itsservices and/or products and how the business will achieve its goals. The planincludes the overall budget, current and projected financing, a market analysisand its marketing strategy approach. In a business plan, a business ownerprojects revenues and expenses for a certain period of time and describesoperational activity and costs related to the business.


The idea behind putting together a business plan is to enable owners to have amore defined picture of potential costs and drawbacks to certain businessdecisions and to help them modify accordingly before implementing theseideas.

Typical structure for a business plan for a start up this venturehas been focused upon analysis of :

A market analysis studies the attractiveness and the dynamics of aspecial market within a special industry. The market analysis isalso known as a documented investigation of a market that is usedto inform a firm's planning activities, particularly around decisionsof inventory, purchase, work force expansion/contraction, facilityexpansion, purchases of capital equipment, promotional activities,and many other aspects of a company.In business, a financial plan can refer to the three primaryfinancial statements (balance sheet, income statement, and cashflow statement) created within a business plan. Financial forecastor financial plan can also refer to an annual projection of incomeand expenses for a company, division or department. A financialplan can also be an estimation of cash needs and a decision on howto raise the cash.

Comparison

Traditional method

• Farmer ‡Mandi‡ Auction ‡ Receipt ‡ Trader ‡ Payment.• Farmer‡ Agent ‡ Payment To Farmer ‡ Trader ‡ Payment.

Business method

• Business ‡ Agreement With Farmer ‡ Payment To Farmer ‡ ValueAddition ‡ Industries ‡ Price Realization.Price realization by farmers for tomato is 3 Rs. And for potato is 4.5 Rs intraditional method as margin is taken by agent and traders whereas by newbusiness method price realization by farmer is Rs 8 & Rs 7 for tomato &coriander respectively. Thus new business eliminates middle man from the system and pay farmers right value of their produce.


Cost Calculation from harvest to packhouse to port Cost involved in exporting tomatoes from India (as per information collected during 2008)

(a) Procurement price*:

Approx. price (Rs. /kg) 4-10

*Price varies according to variety and month of procurement

(b) Charges for treatment, packing, transport, etc.

Particulars Rs./kg Precooling and cold storage

1

Handling and Packing cost 2Transportation charge to Airport

2

Total cost 5C. Air freight charges*:

Freight rates for reefer container are as follows:

A. Air Freight Charges – London Weight : All Weight Group DEL/ LON +300 +500 +1000 Kgs A/F INR 70.00 INR 66.00 INR 60.00 Surcharge INR 11.50 INR 11.50 INR 11.50

Resources available

It is important to take into account the resources that you have available prior to the drafting of your businessplan. Do a proper resource assessment. The types of resources that you may have at your disposal can be


identified as follows: Human resources, Financial resources, Natural resources.

B.1 Human resourcesThis deals with the human resources you have available and what contribution they would make to the business.The CV of the management must be included. This is critical as it could influence the reader or potentialfinancier to know who will be in the driving seat of the business and what the ability of that person is. Thenumber of staff and management you have or will have will be put into this section.

B.2 Financial resources

Fixed assetsA fixed asset is a long-term, tangible asset held for business use and not expected to be converted to cashin the current or upcoming financial year, such as real estate and buildings.Movable assetsThese are considered furniture and equipment that is not part of a building (also includes commonly movedbusiness items such as laptop computers).

Own capitalIf you are going to invest in your own business you need to include this in the business plan. Investing in yourown business capital wise will also be an indication for the reader/financier that you will try to make a successof your business. Capital contributed by the owner or entrepreneur of a business, and obtained, for example,by means of savings or inheritance, is known as own capital

B.3 Natural resourcesThese are water and land available. The availability of the natural resources will determine your operations

Critical issues to look at when formulating a marketing strategy

• It is always good to have a market before you start your business. This provides critical information to a


financier for a decision to be taken on a loan application as it provides information on your projected salesand income• In your marketing strategy you need to identify and list your competitors.• Another important part of a marketing strategy is the 4 Ps which are price, promotion, package and place.Ot her things to look at when developing your marketing strategy are:• Market requirements: e.g. traceability and preferences of customers.• Possible market obstacles, e.g. competitors, what do they have which you can do better?• Opportunities for value adding


India is an agrarian economy and in various commodities it stand in toppositions with respect to production but 30-40 % of the produce is lost due topoor post harvest techniques which result in loss of around 800 million dollarin the whole economy, which is major concern for the pace of development.The other reason is intervention of middle man in supply chain is becominghigher resulting in lesser value to the farmers, so there is a great demand forlogistic industry to prevent post harvest losses and allow farmers to get value oftheir produce.Also there is an boom of retail sector in india. So many corporate houses


started their vegetable retail shop so they will give good prices to farmersproduce.

Farmers in recent scenario follow Traditional method supply of their produce• Farmer ‡Mandi‡ Auction ‡ Receipt ‡ Trader ‡ Payment.• Farmer‡ Agent ‡ Payment to Farmer ‡ Trader ‡ Payment.

Business Method which is being adopted in this project is.• Business ‡ Agreement with Farmer ‡ Payment to Farmer ‡ ValueAddition ‡ Industries ‡ Price Realization.

By comparing new business model with traditional one it can be clearlyestimated that new method of supply chain is more beneficial for farmer interm of price realization.

This business venture will be started in Village narayngaon in Tahsil junnar(maharashtra) with a purpose creating a business model to minimize postharvest losses (which is 50% in Narayangaon) and help farmers to realize bettervalue of their produce and creating a favorable business model for expandingand diversifying it in future. Bank loan is not required as operation cycle is for1 day creating money daily. Profit after tax i.e. net profit for first year is Rs.345975 and is continuously increasing in subsequent years. After a year’s periodbusiness will start working at 80% capacity. From cashflow statement paybackperiod is being calculated, which indicate that after 6.8 year from startingbusiness total investment on the project will be recovered.

Scenario of essential supply like Tomatoes from rural to urban areas

Tomato is one of the essential commodities of the Indian market. The total area under tomato cultivation in India is about 4.97 lakh hectares, which is about 7.3% of the total cropped land under vegetables. The annual production of tomatoes in India is 16,826.38 thousand tons. India is ranked 3rd after China and the US as far as the production of tomatoes is concerned. India has experienced considerable increase in the production of tomatoes over the past 10 years.Marketing of tomatoes is done by middlemen present in vegetable markets who are least interested in farmers or consumers’ well-being. The middlemen involved in the value chain of tomatoes can be classified into two categories, namely, the market commissioning agents and traders. Market


commissioning agents operate at market level and pay a fixed percent of charges to the government. Traders, on the other hand, are w h o l e s a l e r s who purchase tomatoes from one market or directly from farmers and sell the latter to markets of other states to realize the profits on their purchase. Market commissioning agents maintain a good relationship with the same

professionals operating at other markets all over India. These middlemen are supposed to play a vital role in matching demand with supply in the market. India has experienced tremendous change in the supply pattern of tomatoes, particularly from the local supply in urban areas to the global supply chain. In one way this can be interpreted as farmers getting an opportunity to sell in the market situated in any part of India. A majority of the Indian population living in urban cities are engaged in non-farm industrial activities with high incomes. These urban cities have become major markets with a high demand for

vegetables like tomatoes. This latent demand is satisfied by supply from rural villages that are major producers and supplier of tomatoes. Thus, it is important to maintain regularity in the supply of essential commodities at reasonable prices for different classes of urban consumers. Institutions like the government should intervene to ensure supplies of essential commodities to all cities with price control.

Andhra Pradesh is the highest producer of tomatoes in India with a yearly production of 5962.21 thousand tons. Andhra Pradesh contributed to around 35% of total tomato production in India. However, the total demand for tomatoes in Andhra Pradesh is only 7% of India’s demand. This shows that 80% of the produce in Andhra Pradesh has to be either exported to other states or it should be processed and sold as finished goods all over India. Otherwise it adversely affects both ends, namely sellers as well as urban consumers in the value chain of tomatoes. Concentrated hubs of tomato production in Andhra Pradesh are Madanapalle, Kurnool, and Adilabad. Karnataka is the second largest producer of tomatoes in India. Major tomato producing regions of Karnataka are Kolar, Chintamani, and rural Bangalore.

As the two neighbouring states Karnataka and Andhra Pradesh happen to be major producers, there exists a conflict of interest in terms of non participation of outside farmers at the market level for selling tomatoes although the government issues each farmers with a unique ID through which famers can sell their produce in any part of India.

By eliminating competition from outside farmers and sellers from local regions can gain more profit due to supply shortages. Maharashtra is also one of the major producers of tomatoes in India. In Maharashtra Nashik, Sangamner are the major tomato producing regions. Tomatoes from Nashik


are supplied to Orissa, Gujarat, and even to the northern states of Punjab if required.Orissa is considered to be the third largest producer of tomatoes in India. But it sources tomatoes from Nashik, Madanapalle and Kolar during shortages, particularly in summer. In Orissa, due to the demand by middlemen for the hybrid variety tomatoes, farmers have switched from desi variety to hybrid although there is a high demand for the former in the local market. Gujarat too is one of the major suppliers of tomatoes during its peak harvest season i.e. from January to April. From Gujarat tomatoes are supplied to northern parts of India including Punjab.

In Gujarat tomatoes can be cultivated only during winter while throughout the rest of the year Gujarat gets tomatoes from Nashik, Kolar, and Madanapalle. Peak harvest season in Punjab is during the month of April to June. Kapurthala and Patiala are the concentrated hubs of tomato production in Punjab. Punjab, like Gujarat, is a major supplier of tomatoes during its peak harvest season. During this period tomatoes from Punjab are supplied to Delhi, Gujarat, even Pakistan. As Pakistan is a major importer of tomatoes from Punjab (India), the stake of farmers in Punjab depends a lot on the trade relationship between the two countries. In Punjab the local owners have stopped cultivation of tomatoes and are now giving their land on lease to immigrant laborers from Uttar Pradesh for cultivation.

In India Nashik, Kolar, and Madanapalle are the three major concentrated hubs for production and supply of tomatoes all over India. These regions are located in an agro-climate zone in which year round cultivation of tomatoes is possible. During shortages in any part of India tomatoes from these hubs are supplied to various parts of India depending on their requirement. Usually, throughout the year, such shortages occur at some places in India. Tomatoes from these hubs are supplied to even neighbouring countries like Bangladesh.

Farmers at these hubs do follow a cooperative approach in tomato cultivation resulting in considerable quantity of tomatoes arriving at the market level throughout the year. Farmers at these hubs follow crop rotations to maintain the fertility of the soil. Constant supply from these hubs to the market throughout the year go to show that the farmers are not dependent on the time of cultivation as high price period at the market has high risk in yield too.

Hence farmers belonging to these hubs are optimistic and confident of getting reasonable prices in any period. In rare instances is the demand for tomatoes at the market so less that it causes huge loss to the farmer.

Thus, for a sustainable growth of tomato production in India it is essential to maintain profitability in tomato cultivation to ensure its continuity. To bridge


the existing communication gap among stakeholders which causes linkage deficit between stakeholders and inaccurate prediction of demand an online system can help match demand and supply of tomatoes. Proper development of infrastructure at the Indian markets is necessary for maximizing efficiency in the marketing channel which helps in the smooth sale of fruits and vegetables. Also, it minimizes wastage of vegetables in the market due to handling of highly perishable products by laborers.

Bibliographywww.logisticsmgmt.comhttp://www.mahaagri.com/www.nabard.orgnews papers like agrowan.business linesource of dataNarayangaon APMCcORGANISED RETAILRKVK,NarayangaonCAMB,Narayangaon.



Mobilizing Vegetable Farmers’ into groups for Direct market Linkages

ISAP is mobilizing vegetable farmers into groups for linking them up withmarkets in Maharashtra & Rajasthan. The SFAC (Small Farmers AgribusinessConsortium), a society under the aegis of Ministry of Agriculture, is thefacilitator between the implementing agencies and the agriculture departmentsof the respective state governments. The main objective of this project is to linkthe vegetable Farmers Interest Groups (FIGs) & Farmer Producer organizations(FPOs) directly with the markets and end-retailers. ISAP extension agents areworking intensively with these farmers to build their awareness and capacity inorder to increase their production, productivity and thus, their income levels.ISAP is working in Nasik & Pune districts of Maharashtra & Jaipur district inRajasthan under this project directly with about 10,000 farmers for linkingtheir produce to markets through establishment of FPOs


Vegetable farmers interest Group Meeting Held At Chandoli . Mr. Nanapure

Sr. Manager guiding on project objectives & benefits to farmer Groups inPune District

As Wal-Mart Stores Inc ramps up its operations in India, it needs to find morefarmers like Yogesh Todkari.His acre of tomato is big, leafy, and a deep shade of green, thanks to modernirrigation and quality nutrients and seeds - all provided by the world's largestretailer. Most farmers in India, though, don't meet Wal-Mart's standards."They train us and assist us right from when the crop is sown to when it'sharvested. They give us a higher price than the market for better quality," saidTodkari, 29, who works the field in Maharashtra with his elderly father.Investing in farmers to help them improve quality and efficiency, and gettingaround the army of costly middlemen, will be key to whether global chains likeWal-Mart and Tesco Plc succeed where local operators have failed to make aprofit. It will also be a test of whether India's politically fraught decision toallow in global supermarkets in order to modernise its food supply chain provesto be the right one."We plan to procure as much as we can via direct farming so the procurementfrom traders in local markets is as little as possible," said Krishnakant Reddy,who is in charge of direct farming in south and west India for Wal-Mart, whichalready operates in India through 17 wholesale stores.Under the reforms, foreign retailers must source at least 30 percent of theirgoods from local, small industries.GRAPHICSWal-Mart sourcing r.reuters.com/sav33tIndia retail market r.reuters.com/cuh79sIndia recently let in global supermarkets, despite heavy political opposition, inthe hope of improving the supply chain and bringing down wastage and costsin a country where one-third of fresh produce rots and food inflation ispersistent.Wal-Mart, by far the most aggressive foreign supermarket operator in India,expects to open its first store selling directly to the public in 12-18 months,and aims to turn a profit in 10 years, something it hasn't managed in Chinaafter 12 years.To get there, Wal-Mart plans to sign up 35,000 farmers over the next threeyears, up from the 6,700 it has now. Fresh produce accounts for about 30


percent of Wal-Mart's sales in its wholesale outlets in India.Wal-Mart must buy in small batches from small plot-holders in a countrywhere more than 80 percent of farms are under 2 hectares. That meanscontracting with thousands of farmers will still yield only a few thousandtonnes. In North America, retailers like Wal-Mart can buy from a few hundredfarmers who provide hundreds of thousand of tonnes of produce between them."It's going to be a huge challenge and requires a lot of work on the ground,"Reddy said during a recent visit to Narayangaon, a few hours from the city ofPune where Wal-Mart runs one of its seven farm procurement centres.

CUTTING OUT THE MIDDLE MAN

Wal-Mart is trying to learn from the difficulties of local chain operators suchas Reliance Industries and Shoppers Stop, most of which rely on middlemenafter struggling to establish a strong direct farm supplier base.Skirting the entrenched network of middlemen, who opposed the governmentsdecision to allow in supermarkets and includes both traders and local marketsrun by state Agricultural Produce Marketing Committees (APMCs), isn't easy.States require all farm produce to be sold through government regulatedmarkets, and impose registration and transaction taxes on buyers, in additionto fees charged by middlemen operating in the markets. In some states,including Karnataka, buyers can purchase directly from farmers, but still haveto pay taxes and fees both to the APMC and middlemen.In Maharashtra, where Narayangaon is located, Wal-Mart must truck theproduce it buys from Todkari about 20 minutes away to an APMC market andpay fees before delivering it to stores."The APMC fee is actually a tax for doing nothing and that is detrimental todirect farming," said Raj Jain, who heads Wal-Mart in India and like theConfederation of Indian Industry, a large trade group, wants to get rid of theAPMC system.Traders were among the most vocal opponents of letting in foreign retailers, amove whose impact will be dulled by allowing states to opt in or out. Underpopulist pressure, most states plan to keep global operators out, at least fornow."The government is thinking of cutting us out without even thinking about thefamilies who depend on this. We facilitate trade in these markets. Thousands ofjobs across India depend on this," said Rajesh More, a trader at the APMCmarket in the neighbouring village of Manchar.


There are an estimated 50 million small traders involved in the farm-to-storeagriculture business across India, according to the Confederation of All IndiaTraders.

HANDPICKED

The region near Pune is one of India's most productive for horticulture, andTodkari is among only 600 farmers to have met Wal-Mart's standards. Theretailer targets a small number of farmers who are respected locally and canconvince others to work for the grocery giant."This is mainly done to build trust as most Indian farmers haven't heard ofWal-Mart and are apprehensive about working with us," Reddy said.The farmers Wal-Mart selects are suited to modern irrigation, have higheryields and are capable of crop rotation. Wal-Mart's investment in farmers ispart of the $100 million initial spending India requires foreign chains to makeunder the retail reforms."Quality suppliers who these foreign chains can do business with are still smallin number and so are the supply bases where they can procure from," saidDebashish Mukherjee, partner at consultancy AT Kearney.Wal-Mart buys more than a dozen fresh produce items from the Narayangaonarea, including cabbages, tomatoes, onions, grapes, cauliflowers andpomegranates.The U.S.-based retailer has tie-ups in north India with logistics/tradingcompanies to send fresh produce to store by refrigerated truck - a facility it willextend to other farm bases as procurement volumes increase.

QUESTIONNAIRE FOR FARMERS1. PERSONAL INFORMATION:NAME:

VILLAGE:

TOTAL LAND HOLDING:

2. VEGETABLES GROWN:

CORIANDER TOMATO OTHERS


3. PRODUCTION(Kg/ acre)/Number of bunchesTOMATO OTHERS

4. HOW THEY REACH CONSUMER:DIRECT MARKETING MANDI AGENTOTHER SPECIFY_________

5. AVERAGE PRICE PER KG:DIRECT MARKETING MANDI AGENTOTHER SPECIFY_________

6. POST HARVEST LOSSES OF PRODUCE (%)

7. WILLING TO APPROACH A PROCUREMENT AGENCY:YES NO

8. PRICE EXPECTED FROM PROCUREMENT AGENCY:SAME AS TRADITIONAL APPROACH MORE

QUESTIONNAIRE FOR RETAILER1. PERSONAL INFORMATION:NAME OF RETAIL STORE:

2. VEGETABLES IN STORES:CORIANDER TOMATO OTHERS

3. PURCHASE COST(Kg/ acre)/Number of bunchesCORIANDER TOMATO OTHERS

4. HOW THEY REACH FARMER:DIRECT MARKETING MANDI AGENTOTHER SPECIFY_________

5. AVERAGE PRICE PER KG FOR CUSTOMER:DIRECT MARKETING MANDI AGENTOTHER SPECIFY_________

6. POST HARVEST LOSSES OF PRODUCE (%)

7. WILLING TO APPROACH A PROCUREMENT AGENCY:


YES NO

8. PRICE EXPECTED FROM PROCUREMENT AGENCY:SAME AS TRADITIONAL APPROACH LESS


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Project Report Emap