The document discusses the objectives and outline of a project studying fruit and vegetable supply chains in Delhi. The project aims to study organizations like NAFED and SAFAL, traditional wholesale markets, and procurement from farmers. It will identify stakeholders, use analytical tools like AHP and ANP to evaluate different supply chains, and draw conclusions. Site visits will be conducted to collect case studies and understand challenges farmers face selling to these organizations.

1. Fruits and Vegetables (F&V) Supply Chains in
Delhi
Bodhiswatta Saha
2010SMF6848
Under the Guidance Of
Prof. Ravi Shankar

2. Objectives Of The Project
 To visit NAFED at Lawrence Road ,Delhi and prepare a case study
 To visit SAFAL (Constituent of Mother Diary )at Mongolepuri,
Delhi and prepare a case study
 To gather details of the procurement side of the F&V supply chain by
visiting Tapukada and Tijara districts under Alwar and Shajhanpur
,Meerut city and meet famers and understand their problems.
 To understand the traditional supply chain i.e. Sabzi Mandis by
visiting various Mandis and prepare a case study . .
 To identify the stakeholders and key salient features of the chain and
form a matrix.
 To use AHP using primary data to see which the chain is which being
sought after.
 To use ANP to check which cold chain is most sought after

3. Outline
 Background of the Study
 Literature Review: Situation in other Developing Countries
 Emerging Models
 NAFED
 SAFAL
 Procurement
 Traditional Sabzi Mandis
 Use tools like AHP and ANP for reaching a result
 Conclusion

4. Background of the Study
 The marketing of F&V in India is changing dramatically
 Change from the traditional markets to modern formats
 Entry of big retail names – Reliance, ITC, Aditya Birla Group,
Godrej, Bharti Airtel, Adani Group
 Initiation of organized retailing and wholesaling of F&V:
 Reliance Fresh, Chopal Fresh, Namdhari’s Fresh
 FAO and MoA undertook the current study to understand the
ground situation
 Emerging models for backward and forward linkages
 Issues in setting up the chains

5. Literature Review
 The perception of retail chains being a phenomena of the
developed countries has changed significantly
 Significant presence in developing countries – Latin America,
Asia, Africa
 What does retail chains have to do with development?
 Development perspective: farmers involved in modern value chains
earn much higher by bypassing the traders
 Large and medium farmers have the resources to meet the
requirements of the chains, easier to co-ordinate
 Development efforts: linking small farmers to these chains

6. Emerging Models
 Co-operative (HOPCOMS, Karnataka, SAFAL(Mother Diary Ltd.)
 Exports with EUREPGAP Certification (Namdhari Fresh, Bharti
Airtel)
 Farm to Fork -- Complete Chain (Godrej, Reliance, ITC)
 Wholesaling – (Adani Fresh, Metro)
 Front end – Convenience Stores (Food Bazaar, C3)
 Economy Stores (Subhiksha)
 NAFED

7. THANKFUL TO :MR .S.N.SOLANKI(G.M,NAFED)
CONTACT NUMBER:9312632245
&
MR KHOSLA (MANAGER,LAWRENCE ROAD COLD STORAGE)

8. NAFED(National Agriculture Cooperative
Marketing Federation Of India)
 To facilitate, coordinate and promote the marketing and trading
activities of the cooperative institutions in agricultural and other
commodities.
 To act as agent of any government agency or cooperative
institution i.e., if the minimum support price is not maintained
then it that case NAFED picks up goods from farmers at MSP.
 To organize consultancy work in various fields for the benefit of
the cooperative institutions in general and for its members in
particular i.e., for farmers with Kisan cards can get free consulting
from experts regarding agricultural needs.
 We also found out that they undertake manufacture of agricultural
machinery i.e. they sell seeds to farmers in need.
 To guarantee loans or advances to farmers.

9. UNIQUE FEATURES :NAFED
 They have rented out 50% of their cold storage space to other
private parties but still they were not able to recover the operating
costs of the firm leave alone the investment
 Though the cold storage was built to help the farmers but it is being
used by the businessmen to store the commodities and the reason
behind such a case is that the farmers cant invest money
 The other unique feature was that they have outsourced the
backbone of a cold storage i.e., the power unit to a company called
“Frick India Ltd.”
 NAFED has outsourced its power unit to “FRICK INDIA Limited “.
The company is located in Faridabad and looks after the power unit
in the firm. FRICK has 4 employees of their company to look after
the whole setup

10. COSTS FOR THE COLD
STORAGE
PRODUCTS COSTS
PULSES Rs 9/- (25-50KG)/Rs 7/-(0-25KG)
GHEE Rs 11/-(UPTO 15 KG tin)
RAISINS Rs17/-(0-10KG),Rs23/-(>10kg)
For more Details check Annexure of Report

11. NAFED BACKEND IN REALITY
Various Agents
SELL AT
VERY
SMALL
SUM
MSP
SEEDS/LOA
FARMERS N
NO
ACCESS
Fig: 4.2: NAFED BACKEND OF THE SUPPLY CHAIN IN REALITY

12. RECOMMENDATION ON
BACKEND CHAIN
Present in every
100 square
kilometers
Farmers sell to
representative
of NAFED
Sells it to NAFED
Direct access
The company must provide the right seeds to
the right farmer
Fig 4.3: RECOMMENDED BACK END OF THE SUPPLY CHAIN FOR NAFED.

14. FEATURES OF SAFAL
 Mother diary has four vertical/SBUs 1) Dairy 2) Dairy products 3)
OIL 4) Horticulture.
 It has a 400+ retails mostly owned/rented in NCR region
 Retails are of 400 square feet size
 Gross margin in this business is 20 to 25 % with 8 to 10 % of
wastages .
 Central has the capacity: Deep freezer 9000 MT; Cold storage 480
MT; Ripening 100 MT; dispatch hall 2160 MT and production hall
3900 MT
 SAFAL model has reduced around 4 to 10 hours of the distribution
in a normal market system. It was started in 1988 hence it has all the
first mover advantages. While other new players like Reliance fresh
are using portfolio as footfall drivers.
 SAP is implemented to make all the data visible throughout the
departments

15. BACKWARD LINKAGE OF
SAFAL

16. UNIQUE FACTORS
 the average waste at Mongolepuri V&G unit is 1.5 % with range
of .8% to 2.5 %.
 The dispatch happens twice a day and the dock works in a 3 shifts of
8 hours each
 The grading has three categories 1) “A” quality 2) “commercial”
quality and 3) “economical” quality
 In case the unsorted incoming consignments having less than 5%
wastes are sorted
 They handle around 300 metric tons /day
 The routing and the final charts are produced by the logistic
department based on the data from the marketing department, which
continuously collect the sales demand from booths and other
customers

17. PROBLEMS IN SAFAL
SUPPLY CHAIN
 The procurement is limited to few numbers of large farmers. There is very less
inclusion of small farmers.
 The untimely demand or sudden demand makes the consignment reach late to the
CSG plant at Mongolepuri.
 No agriculture input is provided to the farmers.
 Problems in Logistics
 The logistics is not provided on time to the procurement centre sometimes.
 The number of trucks and other vehicles are needed to be increased.
 Many of the trucks in logistics are old and are not in good condition
Problems in Marketing
 The prices of the products are high as compared to local mandis.
 The fruit and vegetables lack freshness and are not in good condition.
 The booth keepers always complain about the supply of bad quality of supply.

18. RECOMMENDATIONS
 The farmers association should procure more from small
farmers.
 The fruit and vegetables procured at the farmers association
must go though primary sorting before procurement.
 The logistics support should be on time.
 The officials from mother dairy should at least do meeting
with farmers and should share their grievances.
 More and effective promotional campaigns should be done to
increase customer’s awareness on benefits of Safal products.
 Mother dairy should come up with more innovating concepts
like home delivery

19. PROCUREMENT FROM
FARMERS

20. ALWAR
 Farmers grow wheat and onion as major products.
 Illegal mining of stone is a big concern and because of which labour cost is very
high.
 Rs 500/day is what labourers get in stone cutting and because of which it seriously
affects the farmers labour cost.
 Farmers are not very well aware of the “Mandi system” and most of them are afraid
of the Mandi system and feel cheated by the Commission agents
 It happens such that they are unable to recover cost of transportation”
 lack of storage facility is a major factor
 They are aware of the KCC but it is like a passbook and most of them withdraw all
credit at once
 They are not very keen on the selling price of the vegetables; they ask local vendors
about the cost and then sell it accordingly.
 SAFAL has the tie up with villagers at Tijara for water melon and farmers there are
showing interest in this chain.

21. SHAJHANPUR(FARMERS
PATTERN)
 The place is famous for the Mango ,Litchi.
 The major problems are the inputs. They are relying heavily on the
govt / cooperative for seeds which is most of the time a mix variety
and this hampers the selling of the product
 They blindly follow the shopkeepers for seeds and fertilizers.
 The Commission agents are the major source of lending money and
they provide in such a way that farmers have to sell back to them and
this cycle leaves no option for farmers.
 Irrigation facility is not good and they get around 16 to18 hour of
electricity and they use diesel for water pumps
 For orchid / nursery they take Rs 300/- and for wheat field the cost is
Rs 200/-. The women get Rs 120/- only.

22. PROBLEMS FACED BY FARMERS
 The system for the KCC is not very effective as many complain of
account not being updated even after returning the money
 Though NAFED claims success but support in collection of farm
products by NAFED .
 Many stories of SAFAL and how Commission Agents are doing
business with them instead of farmers .
 SAFAL is using wrong methods of collecting Mangoes.
SAFAL
FARMER
LOGISTIC
FARMER AGENTS PROVIDERS
FARMER Not enough money
MANDIS

23. SABZI MANDIS
THANKFUL TO :MR MALLIK (HEAD,COMMISSION AGENTS UNION,OKHLA)
The old way to shop for vegetables: Go to the Sabzi mandi at 7 a.m. (to get fresh produce) and
after elbowing your way through hordes of sweaty people, haggle with the vendor. Ninety- nine
per cent perspiration, one per cent inspiration.

24. STAKEHOLDERS
 FARMERS
 COMMISSION AGENTS
 LABOURS
 APMC
 RETAILERS
 LOGISTIC PROVIDERS
 BANKS AND MONEY LENDERS
 AGRICULTURAL SOLUTION PROVIDERS
 CONSUMERS
 GOVERNMENT OF INDIA

25. COSTS INVOLVED

26. PROCESS
FOLLOWED

27. MY EXPERIENCE
 The farmers do not come to the mandis.
 No auction takes place at night, all transactions take
place underhand and based on relationship.
 As per conversations with various commission
agents, the farmers take loan from the commission
agents to grow crops and thereby are forced to sell
the products to them at a lower price.
 Price fluctuation of goods is an important aspect
that caught my eye in these mandis.

28. INTERVIEWS WITH
COMMISSION AGENTS

29. LEND MONEY Buys
FOR
CULTIVATION Product
SELLS
LENDS MONEY
PRODUCT

30. EXISTING SUPPLY CHAIN IN
MANDIS

31. KEY FEATURES OF THE
CHAIN
 1)Pricing  8)Product visibility
 2)Quality  9)Production
 3)Delivery time  10)Storage capacity
 4)Market  11)Forecasting
 5)Lead time  12)Flexibility
 6)Production variety  13)Logistics costs
 7)Relationship  14)Labour wages
 15) License

32. MATRIX BETWEEN THE
STAKEHOLDERS AND KEY
FEATURES OF THE CHAIN

33. PRICING PRODUCTION DELIVERY FLEXIBILITY LEAD PRODUCT VOLUME PRODUCT RELATIONSHIP QUALITY STORAGE FORCASTING MARKET LOGISTICS LABOUR LISCENCE NUMBER IMPORT/EXPOR PACKAGING
T
TIME TIME VARIETY OF VISIBILITY CAPACITY COSTS WAGES OF
RATE
PRODUCTS TRANSACTIONS
FARMERS Y Y N N N Y N N N Y Y Y Y N Y N N N Y
COMMISION AGENTS Y Y Y Y Y Y Y N Y Y N Y Y Y Y Y Y Y Y
LABOURS N Y N N N N N N N N N N Y N Y N Y N N
APMC Y N N N N N N N N N N Y Y N N Y Y N Y
WHOLESELLER Y Y Y N N N Y Y Y Y Y Y Y Y Y Y N N Y
RETAILERS Y Y Y Y Y Y N Y Y Y Y Y Y Y Y Y N N Y
LOGISTIC PROVIDERS N Y Y N Y N Y N Y N Y Y N Y Y Y Y N Y
GOVERNMENT OF INDIA Y Y N N N N N N N Y N Y N N N Y N Y Y
BANKS AND MONEY LENDERS N N N N N N N N Y N N N N N N N Y N N
AGRICULTURAL SOLUTION PROVIDERS N Y N N N Y N N Y Y N Y N N N N N N Y
CONSUMERS Y Y N N Y Y N N N Y N N Y N N N N Y Y

34. WHICH CHAIN IS THE MOST EFFECTIVE