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 their 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 organized 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 the 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 the producer’s capacity for quality production. However, a few farmers have benefited byways of access to new seeds and the 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.