The Production, Sourcing,

Supply and Distribution of

Highland Vegetables to the Ultimate
Consumers

The Production and Supply

Chain Management from
Production Clusters to
Urban Centre
By Benguet Agri-Pinoy
Trading Center
Brent I. Pasian
Urbanization in world-2025

2
Metros and cities on Philippine map
& Scope of organized F&V in Philippines
Aspects Current Expecte Overall
size d size in increase(
(2008- 2020 %)
09)

Retail Rs. Rs. 206

17,497 53,517
billion billion

Food Rs. Rs. 206

retail 10,673 32,696
billion billion

Organise Rs. 150 Rs. 620 313

d food billion billion
retail

3
Phil. top cities-leading in consumer
awareness,income and spending
Rank City/Province Per-Capita
Income

1 Metro Manila

2 Panaji
3 Delhi
4 Valparai
5 Greater Mumbai

6 Pune

7 Ludhiana
8 Chennai
9 Shimla 21, 348

10 Jalandhar 21, 254

4
Consumer expenditure and growth on food
items in India

5
Scope of organised F&V in India
Aspects) Current size Expected size in Overall
(2008-09 2020 increase(%)

Retail Rs. 17,497 billion Rs. 53,517 billion 206

Food retail Rs. 10,673 billion Rs. 32,696 billion 206

Organised food Rs. 150 billion Rs. 620 billion 313

retail

6
Premium F&V Production Scenario
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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8
9
 F&V PRODUCTION
221 MMT
146MMT 75MMT

Potato Okra Banana Mango

Tomato Brinjal Papaya Guava
Cauliflower Pineapple Grapes
Beans
Cabbage Lime Apple
Onion Gourds Lemon Litchi
Peas Leafy Mosambi Orange
Cucumber Ginger Sapota Pome granate
Garlic Tubers Coconut

10
11
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 11790

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Export of Horticultural Produce from
India

13
Consumption of Fruits and Vegetables in
India

14
Premium F&V products in India
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.

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Focus-F&V crops
FRUITS VEGETABLES

16
Export-Fruits and Vegetables
VEGETABLES FRUITS

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Major Greenhouse Production Countries
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

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Growth under greenhouse
cultivation in India & major areas
Year Area in hectares Major states-Maharashtra,
2005-06 451.82 Karnataka, Tamil Nadu, Andhra
2006-07 1440.47 Pradesh, Gujarat, Himachal
2007-08 4796.55 Pradesh, Uttrakhand, Punjab and
2008-09 7086.81 Haryana has already made notable
2009-10 6634.74 headway. Rajasthan, Orissa and
2010-11 5536.47 some northeastern states are also
2011-12 22528.25 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.

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 Production and productivity-
open,greenhouse & hydroponics
Sr. No. Name of Crop Production(Tons/Ha)

Open Greenhouse Hydroponics

1 Tomato 30-50 60-100 150-250
2 Cherry Tomato 15-20 30-40 75-100
3 Green Capsicum 20-30 40-60 100-150
4 Colored capsicum 12-20 25-40 60-100
5 Green Chilly 8-12 15-25 40-60
6 Cucumber 40-60 80-120 150-180
7 Iceberg Lettuce 20-25 40-50 200-250
8 Coriander 15-20 30-40 150-200
9 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 25-30

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Retailing-Traditional model

21
Retailing-Organised model

22
Value Chain Model

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Strengths & Weakness of Premium
F&V Produce in India
STRENGTH WEAKNESS

 Wide variety of fruits and vegetables  Lack of farmer awareness about

can be grown . agricultural practices, products and
 Very less consumption of chemicals as technologies for organic and precision
compared to developed nations. farming.
 Organic pockets existing in different  Price competitiveness.
parts of the country.  Lack of market information and
 Differentiation can be easily created. intelligence.
 Farmers as well as Government  Inadequate PHM and related
interests are rising in organic and off infrastructure to support organic
season F&V production production.
 Various niches in fruits & vegetables  Lack of R&D base in organic and
can be created. precision production .
 Indian corporate are investing in  Unavailability of quality inputs.
agribusiness .  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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Solutions
Productivity 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.’
 Green Tech will 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.
 Green Tech Agri Sector Pvt. Ltd. will establish its 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). 30
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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Partners in F&V
 Green Tech Agri Sector Pvt. Ltd. will establish partnership with Big
commercial farms, Agrifinance companies, Food processing
companies ,Logistics companies, Retail houses and Various Farmer
Producer Organisations.

 State Horticulture Missions & National Level Agencies such as SFAC,

NHRDF,NDDB,NABARD,Departments of Agriculture and Horticulture,
State Agricultural Universities, ICAR institutes.

 All Metros, State capitals or any other urban centers with a population of
1 million and above urban clusters will be identified through out the
country.

 Corporate Strategic Action Plan covering end –to-end interventions in the

supply chain based on comprehensive survey and assessments.

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Strategy and Roadmap
 Goodyield Farming Ltd. will identify and select the city they wish to take
up in 2013-14 and develop the project for fruit and vegetable supply to the
city.
 Perspective plan/strategic plan will be prepared based on the Baseline
survey to assess the extant vegetable supply chain to the identified city,
identify bottlenecks and potential vegetable growing clusters, existing as
well as potential.
 The project report will be formulated for each selected urban cluster which
should invariably contain information on geography & climate, potential of
vegetable development, availability of land, SWOT analysis, and strategy
for development and plan of action proposed to be taken to achieve goals in
the identified urban cluster of the State.
 Focus will be on adoption of cluster approach for production and linking
with available infrastructure to be created, for post harvest management,
processing, marketing and export

35
Actions
 Baseline Survey, selection of metros and cities, farmers cluster and Tie up
with FIs and Aggregators(2013-14) .
 Identify the Town/City (2013-14)
 Participation in Workshop on Baseline Survey, farmer cluster and Tie up
with Aggregators at Corporate office of Green Tech Agri Sector Pvt.Ltd.
(2013-14)
 Prepare projects on above lines and approve Projects by BoD by mid May
2013-14 and implement throughout India.
 Organisation of farmer producer organisation /groups in each urban
clusters (2013-14).
 Setting up of Green Tech Precision Farming Centres equipped with all
agri-inputs , farm credit, plant health clinic, training and demo farms,
hydroponics farms collection centre, grading and pack house, mini-cold
store(2014-17)
 Setting up of Model Mushroom Production Unit(2015).
 Marketing and Distribution Network(2013-17)
 Consolidate bench mark data on area, production, productivity and market
arrivals of important vegetables.2013-14 36
Enables
 Fast growth in organic products.
 Cash and carry of organic fruits and vegetables.
 Good profits due to higher selling rates.
 Changing food habits of rising middle urban class due
to rise in their income.
 Modern retail outlets in urban clusters.
 Government support with Foreign Direct Investment.
 Income and employment generation.

37
 A. Capital Expenses of a Green Tech
Precision Farming Centre in crores
Sr Particulars Unit Rate First Second Third Fourth Fifth Amount
Rs year year year year year Cr
1. Hydroponic 4 acre 2500/ 1.00 1.00 1.00 1.00 1.00 5.00
Structure Sqm
2. Plant health 0.25 25 lac/ - - 0.25 - - 0.25
clinic acre unit
3. Mushroom 0.25 100 - 1.00 - - - 1.00
Production acre lac/unit
4. Grading & 0.25 15 lac/ 0.15 - - - - 0.15
Packing house acre unit
5. Primary 0.10 25 lac/ - - 0.25 - - 0.25
Processing acre unit
6. Cold store 6000 0.10 25 lac/ - - 0.25 - - 0.25
MT acre unit
7. Refer vans 6 MT 3 25 lac/ 0.25 0.25 0.25 0.75
unit
8. Shop cum office 0.25 20 lac 0.20 - - - - 0.20
acre
9. Misc. - - 0.16 0.23 0.20 0.10 0.10 0.79
10. Grand Total A - - 1.76 2.48 2.20 1.10 1.10 8.64

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 B.Operating Expenses of a Green Tech Precision
Farming Centre in crores
Sr. Particulars First Second Third Fourth Fifth Amount
year year year year year
1. Lease rent 0.24 0.48 0.72 0.96 1.20 3.60
2. Agri Inputs 1.00 1.20 1.44 1.73 2.07 7.44
3. Purchase of vegetables 1.50 3.00 4.50 6.00 7.50 22.50
4 Office 0.22 0.22 0.22 0.22 0.22 1.10
5. Hydroponics structure - 0.23 0.23 0.23 0.23 0.92
6. Mushroom Production Unit - - 0.11 0.11 0.11 0.33
7. Plant health clinic - - 0.05 0.05 0.05 0.15
8. Grading &Packing 0.09 0.09 0.09 0.09 0.09 0.45
9. Primary Processing Unit - - 0.05 0.05 0.05 0.15
10. Cold store - - 0.03 0.03 0.03 0.09
11. Input Sale 0.05 0.05 0.05 0.05 0.05 0.25
12. Refer Van 0.03 0.03 0.06 0.06 0.06 0.24
13. Security 0.03 0.03 0.03 0.03 0.03 0.15
14. Electricity & Telephone 0.02 0.04 0.10 0.10 0.10 0.36
15. Misc. 0.32 0.54 0.77 0.97 1.18 3.77
16. Total B 3.50 5.91 8.46 10.69 12.98 41.50
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 C. Total Expenses a Green Tech Precision Farming
Centre(Crores)
Sr Particulars First Second Third Fourth Fifth Total
year year year year year amount

1. Total A 1.76 2.48 2.20 1.10 1.10 8.64

2. Total B 3.50 5.91 8.46 10.69 12.98 41.54

3. Total A+B 5.26 8.39 10.66 11.79 14.08 50.18

4. Interest 0.79 1.26 1.60 1.77 2.11 7.53

5. Depreciation - 0.18 0.25 0.22 0.11 0.76

7 Total C 6.05 9.83 12.51 13.78 16.30 58.47

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 D. Income from a Green Tech Precision Farming
Centre(Crores)
Sr. Particulars First Second Third year Fourth Fifth year
year year year
1. Sale of hydroponics - 150ton 300ton 450ton 600ton
produce @100000 @100000 @100000 @100000
150tons/acre 1.50 3.00 4.50 6.00
2. Sale of agri Inputs to 1.20 1.44 1.73 2.07 2.48
farmers
3. Sale of mushrooms - - 100ton 200ton 250ton
25tons/unit @100000 @100000 @100000
1.00 2.00 2.50
4. Sale of fruits & 1000ton 2000ton 3000ton 4000ton 5000ton
vegetables @30000 @30000 @30000 @30000 @30000
5000tons/cluster 3.00 6.00 9.00 12.00 15.50
5. Total income 4.20 8.94 14.13 20.57 25.48
6. Total costs 6.05 9.83 12.51 13.78 16.30

7. Net Profit D-C -1.85 -0.89 1.62 6.79 9.18

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THANKS
As a result of new multi-sector,
multi-stakeholder collaborations,
urban and rural authorities and
their citizens can come to better
understand their food and
ecosystem resources to adapt to
multiple challenges and manage
more resilient food systems” –FAO.

42