India's Fruits and Vegetables Sector
The fruits and vegetables (F&V) sector in India is expanding more rapidly than cereals, contributing approximately 30% to the value of crop agriculture. Despite its nutritional benefits, it receives much less policy attention and institutional support compared to the cereal sector.
Challenges in the F&V Sector
- Lack of organized value chains, storage, and processing facilities.
- High vulnerability to seasonal gluts, price crashes, and post-harvest losses.
- Post-harvest losses amount to 8.1% for fruits and 7.3% for vegetables, contributing to 37% of total post-harvest losses valued at Rs 1.53 trillion annually (NABCONS, 2022).
- Farmers typically receive about 30% of what consumers pay due to fragmented value chains.
Potential of Farmer Producer Companies
Inspired by the success of the milk cooperatives led by Verghese Kurien, the idea of forming farmer producer companies (FPCs) in the F&V sector is proposed. In the milk sector, brands like AMUL ensure farmers receive between 75-80% of the consumer price.
Sahyadri Farmer Producer Company Ltd (SFPCL)
- Founded in 2004 in Nashik, Maharashtra, by Vilas Shinde.
- Expanded to 252 villages, covering 31,000 acres and over 26,500 registered farmers by 2023-24.
- Annual turnover increased from Rs 13 crore in 2011-12 to Rs 1,549 crore in 2023-24.
- 64.6% of revenue from domestic markets, while 35.4% from exports to 41 countries.
- Grapes and tomatoes contribute significantly to revenue; grapes dominate export revenue (63.9%).
SFPCL integrates small farmers into global markets through aggregation, value addition, processing, and market linkages, adhering to stringent quality standards (GAP) and maintaining international relationships, particularly in the EU and UAE.
Investment in Processing Infrastructure
- Processing of tomatoes into ketchup, puree, and sauce stabilizes prices for farmers.
- Generated over 6,000 jobs, with 32% female employment by 2023-24.
Scaling the Sahyadri Model
The success of Sahyadri Farms provides a blueprint for the broader F&V sector, with the target to scale up to 10,000 FPCs like SFPCL. This requires:
- Strengthening FPOs with institutional support, capital, infrastructure, and digital integration.
- Reviving and expanding Operation Greens and the National Horticulture Mission.
- Implementing a commodity-specific value-chain approach to stabilize prices.
A National Fruit and Vegetable Board, similar to the NDDB, is proposed to streamline market linkages and promote efficient value chains.
Conclusion
The potential for transforming India's F&V sector lies in scaling successful models like Sahyadri Farms, ensuring farmers receive 55-60% of consumer prices, thus revolutionizing the sector akin to the milk sector's transformation.