Development of Supply Chain for Fruit and Vegetable

Industry

Dr. D. N. Kulkarni

President – Agri Food

Jain Irrigationdr.kulkarni.dilip@jains.com

An overview of Indian Agriculture(Production side)

Comparative advantages:

Diverse agro-climatic zones across the country,

Round the year sunshine

Potential to cultivate a vast range of agricultural products

Second largest arable land in the world

Potential for Large marketable surpluses and abundant raw material for

processing

Vast pool of skilled manpower in research and extension

These advantages being leveraged, for India to be a leading food supplier to

the world.

Area and production of Agricultural products(Production in million tonnes)

India India’s Rank in World

Arable Land (Million ha) 151 2

Irrigated Land (Million ha) 55 1

Wheat 72 2

Rice, Paddy 124 2

Coarse grains (including maize) 29 3

Milk 91 1

Fruits 47 2

Vegetables 82 2

Edible Oilseeds 25 3

Pulses 15 1

Sugarcane 245 2

Tea 0.85 1

Cattle (million) 186 2Source: Rabobank International

India is the front ranking producer of many perishable commodities

India produces » 41% of world’s mango,» 23% of Banana, » 24 % of cashew nut, » 10% of onion, » 30% of cauliflower,» 36% of Green Peas.

China : $195 bn; USA : $150 bn; India - $105 bn.

India has •53% of world’s buffalo and• 17% of goat

And a 8000 km of coastline

Present Scenario in Value Chain

Cost Build Up For One Kg. Basket Of Fruit

FARMER TRADER WHOLESALER

RETAILER

CONSUMER PRICE

3.34.1

1.72.5 11.6

Retail Markups

FARM GATE PRICES MILK FISH FRUITS &VEGETABLES

350220

160100

Domestic Market Scenario…... Production may be insufficient if domestic

markets all over the country targeted efficiently & effectively.

Market prices are satisfactory

Mango, Grapes, Apples, Pineapples, Pomegranates, Litchis can be sold out in the country itself because of the production in limited orchards & demand in whole country.

Markets in the rural & semi urban(around 60-65%) should also be tapped along with Metros or big cities(around 12-15%)

International Markets : Trends Steady increase in global production of fresh

produce. Balance of power shifting to retail chains from

suppliers Food safety standards are higher & more complex

requirements. Demanding regulations Increasing intensity of technology Consumption is convenience-driven. i.e. Value

added products. Increasing health concerns reflected in food

consummations. - Organic, functional, herbal.

Scenario of export of major fruits in India

Mango : Over 54% of the world mangoes are produced in India. Less than 10% of total production are approximately exported. It shows export prospectus for Mangoes is very high. Markets to be focused for Mango export:

UAE, Bangladesh, Saudi Arabia, Kuwait, EU,

. New Markets- Japan, USA, China

Export of Mango from India

38.5144.88

73.679.14

71.55 68.6180.99

0

20

40

60

80

100

1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02Year

Val

ue

in R

s. c

rore

Scenario of export of major fruits in India

Grapes : India produces approx. 1 million tons of fresh grapes

annually, out of which export of grapes is about 14000

tons per year, which accounts for only 1.4% of the total production.

Grapes import accounts for approx. 1800 million US $ of

which the Indian share is only about 1.5%.

Major Markets to be focused for Grapes export:–UK, UAE, Netherlands, Germany, Saudi-Arabia, Oman etc..

Export of Grapes from India

54.75 52.6566

37.8955.54

82.98

60.21

020406080

100

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

Year

Valu

e (

Rs. in

Cro

res)

Scenario of export of major fruits in India

Banana : First in production of Banana in the world. (Around 22% of world’s total output). However, the export from India is negligible.

Reasons: – Non availability of on-farm packing house, precooling

and cold storage facilities.– Improper pre-harvest practices.– Improper post harvest handling.

Major Markets to be tapped for Banana export:

UAE, Saudi-Arabia, Qatar, Oman, Kuwait, Bahrain etc.

Scenario of export of major fruits in India

Pomegranate : Europe, UAE, Saudi-Arabia, Kuwait, Oman

Apples : Bangladesh, Belgium,Singapore, Srilanka, UK, Malaysia etc. Citrus Fruits: (Oranges, Mandarins, Lemons, Limes etc.)

Bangladesh, UAE, Oman etc. Pineapples: UAE,Saudi Arabia, UK etc.

Other fruits for export: Papaya, Sapota, Strawberries,Litchis etc.

AEZs in Maharashtra1) Alphonso Mango

2) Kesar Mango

3) Pomegranate

4) Onion

5) Mandarin

6) Banana

7) Grapes & Grape Wine

8) Floriculture

Traditional Vs Innovative

Traditional mango Transportation methods are not ideally suited to

effective food hygiene

Innovative mango Transport methods

Traditional Vs Innovative

Traditional mango packing methods are not ideally suited to effective food

hygiene

Innovative mango packing methods

Supply to Retail Supermarkets which are coming up with high

pace

Where are lacunae ? Fragmented land holding Very poor backward and forward

linkages Poor infrastructure Lack of post harvest Technology Poor logistics Supply Chain Management missing

Supply Chain Management End use based production Contract cultivation Captive cultivation Cluster approach in cultivation Supply just in time-production logistics Quality production Post harvest technology application Scientific storage

End use based production

Local market for table purpose Long distance market within country As raw material for processing and for

definite product manufacture Produce what market / consumer wants

Competitiveness

Key issues in supply chain………. Global and local competitiveness Quality competitiveness Cost competitiveness

Quality Competitiveness Variety Controlling quality during growth Harvesting and Maturity standards Post harvest handling Post harvest treatments Packaging and storage Safety and Hygiene Traceability

Quality production Variety Season Horticultural practices Integrated water, nutrient, pest and disease,

weed management Training/prunning Growth regulators Organic cultivation Harvesting methods/maturity standards

Cost competitiveness

Cost of production Productivity By-product and waste utilization Off season production Marketing logistics Value addition Presentation in market

Supply Just in Time – logistics

Determine what buyer wants?- Variety, Quality, Stage of maturity

Determine when he wants?- Frequency Determine how much he wants?- Quantity,

Lot size, Duration Determine how he wants?- Grading,

Packaging, Transport mechanisms Determine where he wants?- at farm, Port

Service providers Aggregators Logistic support Cold chain Warehousing Port handling Credit facilitators IT related services

THANK YOU