Transforming India's Fruits & Vegetables Sector - Lessons from Dairy Success

Context:

India's fruits and vegetables (F&V) sector is expanding faster than cereals, contributing nearly 30% to crop agriculture. However, the sector needs to be redefined and transformed on the lines of the milk sector.

Issues Faced by F&V Sector in India:

• Despite its nutritional and economic significance, F&V receives less policy support compared to cereals.
• Lack of organized value chains, storage, and processing infrastructure leads to seasonal gluts, price crashes, and post-harvest losses.
• Post-harvest losses amount to Rs 1.53 trillion annually, with 8.1% of fruits and 7.3% of vegetables lost.
• Also, farmers receive only about 30% of the consumer price.

Replicating the Milk Revolution in F&V:

• Success of the milk sector: Led by Verghese Kurien, India transformed from a milk-deficient country to the world’s largest producer with 239 million tonnes in 2023-24.
• Impact of dairy cooperatives: AMUL ensures that farmers receive 75-80% of the consumer price.
• F&V vs dairy sector: Unlike dairy, F&V involves multiple commodities, seasonality, and regional concentration, making price stabilization complex.

Farmer Producer Organisations (FPOs) as a Solution:

• Role of FPOs: Integrating farmers into structured value chains can mitigate price volatility and post-harvest losses.
• Case Study - Sahyadri Farmer Producer Company Ltd (SFPCL):
  • Founded in 2004 in Nashik, Maharashtra, with 10 farmers.
  • Expanded to 26,500 farmers across 252 villages and 31,000 acres.
  • Revenue surged from Rs 13 crore (2011-12) to Rs 1,549 crore (2023-24).
  • 64.6% revenue from domestic markets, 35.4% from exports (41 countries).
• Performance of SFPCL:
  • Export performance: Dominated by grapes (63.9% of exports), followed by mango slices (18.2%) and banana (12.8%).
  • Processing infrastructure: 35% of domestic revenue from tomatoes processed into ketchup, puree, and sauces.
  • Employment generation: Over 6,000 jobs, 32% being women employees.

Scaling Up the F&V Sector:

• Government initiatives:
  • FPO development: India has registered 8,875 out of a targeted 10,000 FPOs (as of August 2024) under the central sector scheme - Formation and Promotion of 10,000 FPOs.
  • Operation Greens (2018): Launched to stabilize the supply of F&V in India, but with a modest Rs 500 crore allocation under the Ministry of Food Processing, it lacked both -
    • A visionary leader (like Kurien in Operation Flood) and
    • Clear accountability.
• Key interventions needed:
  • Strengthening FPOs: Providing working capital, infrastructure, and digital integration.
  • Market linkages: Platforms like Open Network for Digital Commerce (ONDC) and blockchain for transparency.
  • Reviving and expanding: Operation Greens and the National Horticulture Mission.
  • Commodity-specific value chains: Prioritizing processing of at least 10-20% of F&V produce to prevent distress sales.

Need for a National Fruit & Vegetable Board:

• A centralized body, similar to the National Dairy Development Board (NDDB), is essential to streamline market linkages, promote value chains, and integrate retailers like SAFAL.
  • SAFAL is the largest organised retail network of F&V in the NCR, which is owned by Mother Dairy (a subsidiary of the NDDB).
• Ensuring farmers receive 55-60% of the consumer price should be the goal.
• Key question: Can Vilas Shinde of Sahyadri Farms replicate Verghese Kurien’s dairy revolution for F&V?

Conclusion:

• Sahyadri Farms could be the divadandi (lighthouse), as AMUL was in the milk sector.
• Policy backing, infrastructure, and a visionary leader are needed to drive growth.
• Transforming F&V can boost farmer incomes, reduce post-harvest losses, and stabilize prices, making India a global leader in horticulture. 

Q1. What are the key challenges faced by India's fruits and vegetables (F&V) sector?

Ans. The F&V sector faces issues like lack of organized value chains, inadequate storage and processing infrastructure, seasonal gluts, price crashes, and significant post-harvest losses.

Q2. How can the success of India's dairy sector be replicated in the F&V sector?

Ans. By integrating farmers into structured value chains through Farmer Producer Organisations (FPOs), ensuring better price realization, market linkages, and processing facilities.

Q3. What role do FPOs play in strengthening the F&V sector?

Ans. FPOs help in aggregation, value addition, processing, and direct market linkages, reducing price fluctuations and ensuring better income for farmers.

Q4. Why is Sahyadri Farmer Producer Company Ltd (SFPCL) considered a successful model for FPOs?

Ans. SFPCL has successfully expanded farmer participation, built strong domestic and export linkages, invested in processing infrastructure, and generated significant employment.

Q5. What policy measures are required to transform India's F&V sector?

Ans. Strengthening FPOs, expanding Operation Greens, developing commodity-specific value chains, leveraging ONDC, and establishing a National Fruit and Vegetable Board. 

Source:IE