ORGANISED RETAILING OF FRESH FRUITS AND VEGETABLES : IS IT HELPING PRODUCERS?
November 12, 2010032
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.
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