Study On Establishment of A Vegetable Trading Unit (Tomato) at Narayangaon, Pune.

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Suraj Pawar suraj.vamnicom@gmail.com

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

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CERTIFICATE

This is to certify that Mr. SURAJ PAWAR, a bonafide student of Post
Graduate Diploma in Agri- Business Management (2012-2014), VAMNICOM,
Pune did his Entrepreneurship Management of Agri Projects under my
Guidance. He has successfully completed his project entitled Study on
Establishment of a vegetable trading unit (tomato) at
Narayangaon (Pune). towards the partial fulfilment of his course .

DATE Mr. Mangesh Kadam

PLACE: Pune (MSAMB)

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ACKNOWLEDGEMENT

This acknowledgement is not merely a catalogue of names but an expression of
deep sense of gratitude to all those who helped me in this project & for giving
their assistance for completing the project successfully.
I feel my immense pleasure in expressing my sincere and profound sense of
gratitude to Mr. Mangesh Kadam, for his inspiring and affectionate guidance,
Unending benevolence and constant encouragement during the course of this
project.
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 necessary
help during the course.
Indeed words fail to express my profound sense of gratitude and heartfelt
indebtedness to my beloved parents.
I am also thankful to all of them who are directly or indirectly involved in
driving this project to a success.

Date: (SURAJ PAWAR)

Place: VAMNICOM, Pune

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TABLE OF CONTENTS
Serial No. Contents Page No.
1. Executive Summary
2. Industry Scenario
3. Business Plan
4. Summary
5. Case study
6. Questionnaire

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Need for the project:
Help farmers get best prices.
In Maharashtra the wastage attributed to the lack of proper and
sufficient 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) at
Narayangaon(Pune).

Objectives-
1) To study current supply chain scenario of tomato & coriander from farmers to
mandi.
2) To study & enlist requirement of established / branded organized retail player
in 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 & analyzed
from objectives.
5) To study one case.

Methodology:

1. RESEARCH DESIGN:
For the purpose of this project Descriptive Research Design will be followed. It
will involve In-depth Personal Interview of the identified respondents during the
survey. The respondents identified would be farmers & organized retailer. This
research 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 5
Organised retailer 5

4. SOURCE OF DATA:

Primary data:
A structured questionnaire will be prepared to collect primary data from the
survey of Farm owners, organized retailers.

Secondary data: The sources of secondary data used would be:
Internet Various articles and reports are collected from the internet to provide

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insights about the projec

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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 from
the wholesale market to consumers tables due to short supply of tomato &
coriander.
Normally, the difference goes up to 300 per cent only in abnormal
circumstances. Apart from the delayed monsoon, massive wastage in transit
and involvement of a series of middlemen, obviously for making profit at every
layer, are resulting in such prices.
Our teams physical checks in wholesale and retail markets reveal that among
larger metropolitan cities, the price difference in Mumbai is the highest,
followed by New Delhi. These are as high as 200-300 per cent in most
vegetables and grains and pulses. In other metros, prices are higher by 50-100
per cent from wholesale to retail. Organised retail chains are no different. In
most organised stores, prices have been found near those prevailing in retail
markets. In pune, most commodities come from outside, it being an island city.
Why
Rapidly perishable essential commodities like vegetables involve high risk in
handling 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 in
retail outlets, despite a very normal price in wholesale mandis. Farmers get
around 50 per cent of the wholesale price.

Since it is impossible to visit mandis for common consumers and pick
commodities in bulk (vegetables are not sold in a quantity below five kg and
grains 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 kg
average sales) from grocery-retailers in the vicinity.

According to Mahindra meher, deputy secretary, Agricultural Produce
Marketing Committee (APMC), Narayangaon, the price for retail consumers
works out higher due to factors other than the wholesale price. He says
retailers suffer a loss of nearly 30 per cent in the weight of rapidly perishable
vegetables like cabbage, cauliflower and tomatoes, due to poor handling and
spoilage. To keep these looking fresh, retailers generally polish each piece of
tomato and chop the outer leaves of cabbages and cauliflowers.

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Also, prices of every commodity for retailers are determined by the quantity of
procurement and the area of sales. For example, in posh areas, the retail price
of 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 cost
hardly 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 its
stores. 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 are
farmers, intermediaries, mandi, next mandi, APMC, through whom the
commodities pass. Then, there is transportation and wastage, says a Future
group executive.

According to a Boston Consulting Group study in 2011, the supply chain of
vegetables such as tomatoes has five levels between farmers in Narayangaon in
Maharashtra (known for tomato cultivation).The chain involves a farmer,
aggregator, market trader, wholesaler, sub-wholesaler and retailer, before the
vegetable reaches the end-consumer. In the process, 30 per cent is farmer
realisation, 24 per cent is value addition such as sorting and grading, 23 per
cent 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 demand
and supply factors to determine prices, the Future Group executive said.
Explaining the rationale for high pricing, another retail executive of a
hypermarket chain says a farmer sells a cabbage for Rs 1 or Rs 1.50 to a local
broker, who sells it at Rs 7-8 to a mandi broker, who sells it at Rs 16-17 to the
retailer, who sells it to the final consumer at Rs 20. We buy tomatoes from
Naraysangaon APMC. Per cart we pay about Rs 18 for transportation, we also
keep 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.

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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

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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

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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.
Andhr
a
Prades
h
74.10 1408.1
0
19.00 87.00 1652.1
0
19.00 296.30 5926.2
0
20.00 35.22
Karnat
aka
53.40 1573.8
0
29.50 48.30 1580.0
0
32.70 51.20 1756.7
0
34.30 10.44
Orrisa 101.10 1360.5
0
13.50 102.90 1394.7
0
13.60 96.60 1367.2
0
14.10 8.13
Mahar
ashtra
33.00 732.30 22.20 50.00 1112.5
0
22.30 52.00 738.00 14.20 4.39
West
Bengal
52.30 999.70 19.10 53.50 1050.0
0
19.60 54.10 1063.7
0
19.60 6.32
Bihar 46.40 1037.2
0
22.40 46.50 1043.7
0
22.40 46.80 1056.2
0
22.60 6.28
Gujara
t
30.50 746.20 24.40 33.80 841.30 24.90 38.80 978.40 25.20 5.81
Chhati
shgarh
39.20 420.40 10.70 41.30 600.60 14.50 42.90 627.90 14.60 3.73
Tamiln
adu
0.00 0.00 0.00 26.10 519.10 19.90 27.20 580.60 21.40 3.45
Jharkh
and
21.80 436.10 20.00 21.80 436.20 20.00 22.30 401.60 18.00 2.39
Others 147.20 2434.7
0
16.50 123.20 2203.0
0
17.90 136.60 2330.0
0
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

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Distribution of produce from primary to terminal market

and Maharashtra.

Belgaum, Nasik, Pune, Sangli and Nagpur.

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.

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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

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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
37,045.8
9
78.77
U Arab
Emts
10,136.6
4
1,145.65 31,177.9
2
7,478.49 25,385.0
0
4,772.29 10.15
Banglade
sh Pr
17,002.5
2
1,674.79 19,733.2
6
2,048.16 23,389.9
2
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 105556.9
5
10324.29 65,872.2
6
11509.98 266,986.
38
47,030.5
0
100

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Business Plan:

A written document that describes in detail how a new business is going to
achieve its goals. A business plan will lay out a written plan from a marketing,
financial and operational viewpoint. Sometimes a business plan is prepared for
an established business that is moving in a new direction.
A business plan includes a description of a company or small business, its
services and/or products and how the business will achieve its goals. The plan
includes the overall budget, current and projected financing, a market analysis
and its marketing strategy approach. In a business plan, a business owner
projects revenues and expenses for a certain period of time and describes
operational activity and costs related to the business.
The idea behind putting together a business plan is to enable owners to have a
more defined picture of potential costs and drawbacks to certain business
decisions and to help them modify accordingly before implementing these
ideas.

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

A market analysis studies the attractiveness and the dynamics of a
special market within a special industry. The market analysis is
also known as a documented investigation of a market that is used
to inform a firm's planning activities, particularly around decisions
of inventory, purchase, work force expansion/contraction, facility
expansion, purchases of capital equipment, promotional activities,
and many other aspects of a company.
In business, a financial plan can refer to the three primary
financial statements (balance sheet, income statement, and cash
flow statement) created within a business plan. Financial forecast
or financial plan can also refer to an annual projection of income
and expenses for a company, division or department. A financial
plan can also be an estimation of cash needs and a decision on how
to 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 Value

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Addition Industries Price Realization.
Price realization by farmers for tomato is 3 Rs. And for potato is 4.5 Rs in
traditional method as margin is taken by agent and traders whereas by new
business 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 2
Transportation charge to
Airport
2
Total cost 5

C. 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

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Resources available

It is important to take into account the resources that you have available prior
to the drafting of your business
plan. 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 resources
This 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 potential
financier to know who will be in the driving seat of the business and what the
ability of that person is. The
number of staff and management you have or will have will be put into this
section.

B.2 Financial resources

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

Own capital
If you are going to invest in your own business you need to include this in the
business plan. Investing in your
own business capital wise will also be an indication for the reader/financier
that you will try to make a success
of 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 resources
These are water and land available. The availability of the natural resources
will determine your operations

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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 sales
and 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

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India is an agrarian economy and in various commodities it stand in top
positions with respect to production but 30-40 % of the produce is lost due to
poor post harvest techniques which result in loss of around 800 million dollar
in the whole economy, which is major concern for the pace of development.
The other reason is intervention of middle man in supply chain is becoming
higher resulting in lesser value to the farmers, so there is a great demand for
logistic industry to prevent post harvest losses and allow farmers to get value of
their 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 farmers
produce.

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 Value
Addition Industries Price Realization.

By comparing new business model with traditional one it can be clearly
estimated that new method of supply chain is more beneficial for farmer in
term 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 post
harvest losses (which is 50% in Narayangaon) and help farmers to realize better
value of their produce and creating a favorable business model for expanding
and diversifying it in future. Bank loan is not required as operation cycle is for
1 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 years period
business will start working at 80% capacity. From cashflow statement payback
period is being calculated, which indicate that after 6.8 year from starting
business 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

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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 Indias 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

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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

25
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.

Bibliography
www.logisticsmgmt.com
http://www.mahaagri.com/
www.nabard.org
news papers like agrowan.business line
source of data
Narayangaon APMCc
ORGANISED RETAILR
KVK,Narayangaon
CAMB,Narayangaon.

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Mobilizing Vegetable Farmers into groups for Direct market Linkages

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

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

28
Sr. Manager guiding on project objectives & benefits to farmer Groups in
Pune District

As Wal-Mart Stores Inc ramps up its operations in India, it needs to find more
farmers like Yogesh Todkari.
His acre of tomato is big, leafy, and a deep shade of green, thanks to modern
irrigation and quality nutrients and seeds - all provided by the world's largest
retailer. 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's
harvested. They give us a higher price than the market for better quality," said
Todkari, 29, who works the field in Maharashtra with his elderly father.
Investing in farmers to help them improve quality and efficiency, and getting
around the army of costly middlemen, will be key to whether global chains like
Wal-Mart and Tesco Plc succeed where local operators have failed to make a
profit. It will also be a test of whether India's politically fraught decision to
allow in global supermarkets in order to modernise its food supply chain proves
to be the right one.
"We plan to procure as much as we can via direct farming so the procurement
from 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, which
already operates in India through 17 wholesale stores.
Under the reforms, foreign retailers must source at least 30 percent of their
goods from local, small industries.
GRAPHICS
Wal-Mart sourcing r.reuters.com/sav33t
India retail market r.reuters.com/cuh79s
India recently let in global supermarkets, despite heavy political opposition, in
the hope of improving the supply chain and bringing down wastage and costs
in a country where one-third of fresh produce rots and food inflation is
persistent.
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 China
after 12 years.
To get there, Wal-Mart plans to sign up 35,000 farmers over the next three
years, 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 country
where more than 80 percent of farms are under 2 hectares. That means
contracting with thousands of farmers will still yield only a few thousand
tonnes. In North America, retailers like Wal-Mart can buy from a few hundred
farmers 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 of
Pune where Wal-Mart runs one of its seven farm procurement centres.

29
CUTTING OUT THE MIDDLE MAN

Wal-Mart is trying to learn from the difficulties of local chain operators such
as Reliance Industries and Shoppers Stop, most of which rely on middlemen
after struggling to establish a strong direct farm supplier base.
Skirting the entrenched network of middlemen, who opposed the governments
decision to allow in supermarkets and includes both traders and local markets
run by state Agricultural Produce Marketing Committees (APMCs), isn't easy.
States require all farm produce to be sold through government regulated
markets, and impose registration and transaction taxes on buyers, in addition
to fees charged by middlemen operating in the markets. In some states,
including Karnataka, buyers can purchase directly from farmers, but still have
to pay taxes and fees both to the APMC and middlemen.
In Maharashtra, where Narayangaon is located, Wal-Mart must truck the
produce it buys from Todkari about 20 minutes away to an APMC market and
pay fees before delivering it to stores.
"The APMC fee is actually a tax for doing nothing and that is detrimental to
direct farming," said Raj Jain, who heads Wal-Mart in India and like the
Confederation of Indian Industry, a large trade group, wants to get rid of the
APMC system.
Traders were among the most vocal opponents of letting in foreign retailers, a
move whose impact will be dulled by allowing states to opt in or out. Under
populist pressure, most states plan to keep global operators out, at least for
now.
"The government is thinking of cutting us out without even thinking about the
families who depend on this. We facilitate trade in these markets. Thousands of
jobs across India depend on this," said Rajesh More, a trader at the APMC
market in the neighbouring village of Manchar.
There are an estimated 50 million small traders involved in the farm-to-store
agriculture business across India, according to the Confederation of All India
Traders.

HANDPICKED

The region near Pune is one of India's most productive for horticulture, and
Todkari is among only 600 farmers to have met Wal-Mart's standards. The
retailer targets a small number of farmers who are respected locally and can
convince others to work for the grocery giant.
"This is mainly done to build trust as most Indian farmers haven't heard of
Wal-Mart and are apprehensive about working with us," Reddy said.
The farmers Wal-Mart selects are suited to modern irrigation, have higher
yields and are capable of crop rotation. Wal-Mart's investment in farmers is
part of the $100 million initial spending India requires foreign chains to make
under the retail reforms.
"Quality suppliers who these foreign chains can do business with are still small
in number and so are the supply bases where they can procure from," said

30
Debashish Mukherjee, partner at consultancy AT Kearney.
Wal-Mart buys more than a dozen fresh produce items from the Narayangaon
area, including cabbages, tomatoes, onions, grapes, cauliflowers and
pomegranates.
The U.S.-based retailer has tie-ups in north India with logistics/trading
companies to send fresh produce to store by refrigerated truck - a facility it will
extend to other farm bases as procurement volumes increase.

QUESTIONNAIRE FOR FARMERS

1. PERSONAL INFORMATION:
NAME:

VILLAGE:

TOTAL LAND HOLDING:

2. VEGETABLES GROWN:

CORIANDER TOMATO OTHERS

3. PRODUCTION(Kg/ acre)/Number of bunches
TOMATO OTHERS

4. HOW THEY REACH CONSUMER:
DIRECT MARKETING MANDI AGENT
OTHER SPECIFY_________

5. AVERAGE PRICE PER KG:

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

31

QUESTIONNAIRE FOR RETAILER

1. PERSONAL INFORMATION:
NAME OF RETAIL STORE:

2. VEGETABLES IN STORES:

3. PURCHASE COST(Kg/ acre)/Number of bunches

4. HOW THEY REACH FARMER:

5. AVERAGE PRICE PER KG FOR CUSTOMER:

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

Study On Establishment of A Vegetable Trading Unit (Tomato) at Narayangaon, Pune.

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Study On Establishment of A Vegetable Trading Unit (Tomato) at Narayangaon, Pune.

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Suraj Pawar suraj.vamnicom@gmail.com

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