ORGANISED RETAILING OF FRESH FRUITS AND VEGETABLES : IS IT HELPING PRODUCERS?

This research explored the procurement operations of organized corporate retailers in one of the major vegetable growing clusters in Andhra Pradesh, India and its impact on producers. Several Indian companies entered into organized retailing of fresh fruits and vegetables (FFVs) in the last 3 years. This paper explores the procurement operations of these retailers and its impact on producers of fruits and vegetables at Vontimamidi (a vegetable growing cluster that is a major procurement hub of organized retailers in Hyderabad, India). The study found that those selling their produce through organized retailers are benefiting by way of higher prices than what is offered to them by the local market. The major gain in this arrangement comes from the savings on mandi commission charges and the cost of packing materials. However, the organised retailers, being more conscious of quality, currently procure only the first grade produce in limited quantities to meet their front-end demands. A majority of the producers, therefore, continue to depend on local mandis to sell bulk of their produce. The procurement arrangements (yet to evolve fully) are based on trust, and without any written or binding contract. Some of the organized retailers have set up demonstration farms, nurseries and technical support teams to enhance producer’s capacity for quality production. However, a few farmers have benefited by ways of access to new seeds and right technical advice. While the demand for better quality fruits and vegetables is growing rapidly, both the government and the retailers are not doing enough to support farmers.

There are two publications coming out of this-

1. CRISP Discussion Paper

2. RIU Discussion Paper