The Production, Sourcing,Supply and Distribution of Fruit & Vegetables for Urban Clusters in India

The Production and Supply Chain Management from

Production Clusters to Urban Centre

Urbanisation in world-2025

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Metros and cities on Indian map&Scope of organised F&V in India

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Aspects Current size (2008-09)

Expected size in 2020

Overall increase(%)

Retail Rs. 17,497 billion

Rs. 53,517 billion

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Food retail

Rs. 10,673 billion

Rs. 32,696 billion

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Organised food retail

Rs. 150 billion

Rs. 620 billion

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Premium F&V Production Scenario

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Wide range of agro climatic zones and skills for growing different fruits and vegetables under both open and protected cultivation.

Second largest producer of fresh fruits and vegetables, but productivity is not at par with global norms.

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F&V PRODUCTION221 MMT

146MMT 75MMT

PotatoTomatoCauliflowerCabbageOnionPeasCucumberGarlic

PotatoTomatoCauliflowerCabbageOnionPeasCucumberGarlic

OkraBrinjalBeansGourdsLeafyGingerTubers

OkraBrinjalBeansGourdsLeafyGingerTubers

BananaPapayaPineappleLime LemonMosambiSapotaCoconut

MangoGuavaGrapesAppleLitchiOrangePome granate

MangoGuavaGrapesAppleLitchiOrangePome granate

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Market Arrival of F &V and average prices-2012

Commodity Market arrival in tons Average Price/ton

Bhindi 351588.82 19330

Bottle gourd 239465.70 8060

Brinjal 769732.95 11030

Cabbage 610880.49 10020

Capsicum 96102.47 24670

Carrot 313044.07 19000

Cauliflower 775179.17 14160

Cucumber 363816.82 11050

Drumstick 325920.36 28170

French Beans 28115.78 27240

Green Peas 108179.81 30590

Mushrooms 468.19 108460

Onion 8345819.46 8050

Exotics 84958.17 13500

Potato 7301810.00 9420

Pumpkin 303267.77 8100

Raddish 141579.04 6210

Spinach 39488.15 6400

Sweet Potato 50848.75 10370

Tomato 2582619.74 117909

Export of Horticultural Produce from India

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Consumption of Fruits and Vegetables in India

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Premium F&V products in India

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A. Quality produce from precision farming/protected cultivation such as greenhouse, nethouse and hydroponics .

B. Fresh Organic Fruits and Vegetables.

C. Fresh off season fruits and vegetables from open cultivation.

D. Fresh exotic fruits and vegetables.

E. Processed and Frozen vegetables.

F. Mushrooms –fresh and canned.

G. Processed natural juices,jams,sauces and pickles.

Focus-F&V crops

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FRUITS

VEGETABLES

Export-Fruits and Vegetables

Vegetables Fruits

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Major Greenhouse Production Countries

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COUNTRY AREA (ha) SOURCE

China (2010) 27,60,000 Yang, 2011

Korea (2009) 57,444 Lee, 2011

Spain 52,170 Euro Stat, 2010

Japan 49,049 MAFF, 2011

Italy 26,500 Euro Stat, 2010

Mexico 11,759 SAGARPA, 2010

Netherlands 89600 Euro Stat 2011

France 9,620 Euro Stat, 2005

United States 8,425 US Census Horti Spec 2010

India 30,000 NHB 2011

Growth under greenhousecultivation in India & major areas

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Major states-Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Gujarat, Himachal Pradesh, Uttrakhand, Punjab and Haryana has already made notable headway. Rajasthan, Orissa and some northeastern states are also coming forward. As a result, the total area under protected cultivation is estimated to have expanded in the past one decade to nearly 30,000 hectares.

Year Area in hectares2005-06 451.822006-07 440.472007-08 4796.552008-09 7086.812009-10 634.742010-11 5536.472011-12 2528.25

Production and productivity-open,greenhouse & hydroponics

Sr. No. Name of Crop Production(Tons/Ha)

Open Greenhouse Hydroponics1 Tomato 30-50 60-100 150-250

2 Cherry Tomato 15-20 30-40 75-1003 Green Capsicum 20-30 40-60 100-150

4 Colored capsicum 12-20 25-40 60-1005 Green Chilly 8-12 15-25 40-60

6 Cucumber 40-60 80-120 150-1807 Iceberg Lettuce 20-25 40-50 200-250

8 Coriander 15-20 30-40 150-2009 French Bean 10-15 20-25 50-60

10 Squash 25-30 50-60 100-150

11 Chinese Cabbage 15-20 30-40 50-100

12 Spinach 15-20 30-40 150-200

13 Celery 20-30 40-60 100-150

14 Parsely 10-15 20-25 100-125

15 Straw berry 5-6 10-12 25-3017

Retailing-Traditional model

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Strengths & Weakness of Premium F&V Produce in India

STRENGTH WEAKNESS• Wide variety of fruits and

vegetables can be grown .• Very less consumption of chemicals

as compared to developed nations. • Organic pockets existing in different

parts of the country.• Differentiation can be easily created.• Farmers as well as Government

interests are rising in organic and off season F&V production

• Various niches in fruits & vegetables can be created.

• Indian corporate are investing in agribusiness .

• Lack of farmer awareness about agricultural practices, products and technologies for organic and precision farming.

• Price competitiveness.• Lack of market information and

intelligence.• Inadequate PHM and related

infrastructure to support organic production.

• Lack of R&D base in organic and precision production .

• Unavailability of quality inputs.• Certification and labeling.• No access to international market.

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Opportunities of Premium F&V Organic Produce• Favorable government vision.• WTO offering global opportunities.• Price –premiums in different markets.• Export opportunities in new product/market.• USA, Europe and Japan are rising markets.• Branding offers new opportunities for differentiation.• Rising demand for organic products.• Big retail stores/chains opening up.• New developments in post harvest technologies.• New products, production, PHM technologies .• Private sector keen to join premium F &V value chain.

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SolutionsProductivity Precision farming through cluster approach by adopting

greenhouse and hydroponics cultivation.

Quality improvement

Quality inputs, organic farming, good agricultural practices and management.

Post Harvest Management

Establishing collection and processing centers in each growing clusters because premium crops are climacteric in nature and are highly sensitive to change in temperature they need proper cold storage chain till point of sales to the end consumer.

Packaging Innovative and attractive customized packing so that material is safe during transportation.

Transportation Refrigerated vans.

Storage Cold storage near production areas.

Marketing Direct marketing to customers, aggregators, hotels and establishments.

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F&V-Demand Total vegetable volume sales exceeded 90 million tones in 2011. Of the

total volume, 86% of sales were to consumers and the remaining 14% to establishments such as restaurants and canteens or institutions such as hospitals and schools.

Aggregators , retail chains, RWAs and ULBs and health authorities want assured supplies from ‘identified production clusters.’

Initiate organic production of fruits and vegetables under its own brand in all major cities having population more than 1 millions.

Establishment of post harvest management and marketing infrastructure.

Demand-driven exotic vegetables production is suitable for the farmers as they have assured market through contract with consumers.

Exotic vegetables market is growing at the rate of 15 to 20% per annum is increasing day by day since India is importing more than 85% exotic vegetables.

The annual demand for mushrooms that was around 5,000 tons in 2001 in the country has doubled to 10,000 tons in 2004 and the demand is expected to grow at a good pace of 25% every year for many years to come.

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F&V-Supply Production and productivity of crops and profitability of farmers can be

enhanced by encouraging 'off-season' production under precision farming systems such as protected cultivation in green houses, shade net houses. etc for generating income round the year.

Presently the area under vegetable production under protected conditions is 30000 ha., while the national potential is ten lakh ha.

Corporate are planning to Establish own hydroponics farms(5-25 acres) in and around major urban clusters to produce year round fresh organic capsicum, tomato, cucurbits,english vegetables, strawberry and a wide range of horticultural crops.

Organizing farmers clusters to overcome issues of fragmented land holdings.

Credit facility to farmers to meet operational expenses. Adoption of precision farming technologies. Supply of Quality planting material, seeds, INM & IPM. Good Agriculture Practices.

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Scope of Premium F&V • The Premium Fruit and Vegetable Initiative is proposed to cover Peri urban areas

around all State Capitals or other cities with more than 10 lakh population. Total 40 Cities to be covered during 2013-18.

• India had a large and growing population of over a billion people of whom, around 300million were categorized as middle class consumers who had significant purchasing power. The country also offered a relatively young market with 54 percent of the population below 25 years of age.

• The McKinsey Global Institute, a think tank, estimated India’s retail market would be worth $1.52 trillion by 2025, up from $370 billion in 2005. McKinsey estimated the food-and-beverage category would still account for 25 percent of all retail spending in 20years.

• With the introduction of new food chains like McDonald's, Mainland china, California Pizza, Pizza Hut etc, the people in India are now developing new test buds to accept new food items. Preparation of these food items need many exotic vegetables like Baby corn, Red cabbage, Broccoli, Colored bell pepper, lettuce, mushroom, Asparagus ,Olives etc some of which are imported from other countries. Due to huge supply chain, more demand and less supply these vegetables comes very costly in the Indian market.

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Market of F&V produce The market for organic food products in India is growing at 20-22 per

cent a year. With rising spending power of the growing middle class in the country and increased awareness towards chemical free food, organic and natural products sector will grow significantly in the coming years.

Indian market for organic food including exports is currently valued at Rs. 10 billions.

The country produced around 3.88 million tons of certified organic products that include basmati, pulses, tea, coffee, spices and oilseeds.

Organic foods industry presently is metro-based, with about 95 per cent of the brands existing in top 10 metros like Delhi (NCR), Kolkata, Mumbai, Pune, Chennai, Bangalore and other tier II cities.

The states doing well in organic farming are Madhya Pradesh (440,000 hectares), Maharashtra (150,000 hectares) and Orissa (95,000 hectare).

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Objectives• To address all concerns related to both the demand and supply side of

the premium fruit and vegetable sector in selected cities.• To enhance vegetable production and productivity, improve nutritional

security and income support to vegetable farmers.• To establish an efficient supply chain thereby leading to employment

opportunities and incomes for intermediate service providers, and safe, good quality, fresh as well as processed agri produce at competitive price for urban consumers.

• To promote, developing and disseminating technologies for enhancing production and productivity of vegetables in peri-urban areas of major cities.

• To address the entire value chain, right from the stage of pre-production to the consumers table through appropriate interventions.

• To create employment generation opportunities for skilled and unskilled persons, especially unemployed youth.

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Interventions -Backwards

Baseline Survey of urban clusters to assess demand and supply.

Organization and Promotion of Farmers Groups/Farmer Institutions .

Measures for enhancement of production and productivity through precision farming .

Establishing hydroponics structures, mushroom production units, plant health clinics, primary processing ,grading, storage and value addition at production clusters.

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Interventions -Forward Establishment of collection and testing centers in

each potential cluster. Establishment of grading, packing, processing and

storage facilities Support of ULBs for static/mobile CA kiosks. Support of institutions (co-ops, corporate, SPVs,

Farmers groups, Universities, CBOs) for seedling development, INM/IPM, contract and organic farming, GAP, capacity building)

Post harvest management, storage and transport infrastructure

Suitable Tie-ups between production clusters/ Farmers groups and Aggregators

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