Documentos de Académico
Documentos de Profesional
Documentos de Cultura
2009
Submitted to:
Centre for micro Finance
Submitted by:
Manoj Kumar Rolan
National Institute of Agricultural Marketing, Jaipur
Email: manojrolan.niam08@gmail.com
Mob: 9001686787
C.C.S. National Institute of Agricultural Marketing (NIAM), Jaipur hereby declare that the entire report of
this project titled as “Study of Value Chain on Vegetables” is true and has been completed by me
I, further declare that no part of this report is a copy from any other source, the original source of
information has been given due credit wherever it is required. The project has been completed in duration
This is to certify that Mr. Manoj Kumar Rolan is a bonafide student of Post-Graduate Diploma in Agri-
Business Management (2008-10), NIAM, Jaipur and participated as summer trainee in our organization
for the period 15th April-09 to 15th June-09. He has successfully completed his summer project titled “Study
of Value Chain on Vegetables”, towards the partial fulfillment of his requirements for the course.
Dated:
I wish to take this valuable opportunity to express my sincere thanks to Centre for micro Finance for
providing me a chance of learning. The project has not only helped me understand the vegetables value
chain in depth, but widened my vision in general management too, by virtue of being associated with an
excellent and professional organization.
I would like to thank Mr. Jaipal Singh and Mr. Sourav Roy (Project Guide) for giving me an opportunity to
work as a summer trainee for Centre for micro Finance.
This project neither could have been started nor completed without the encouragement and support of
many people, most notably Mr. M S Jairath sir (Director NIAM) and Mr. Tapi Bhusan for providing an
overall guidance, encouragement and extending all the necessary help to the project assigned to me as a
summer trainee in Centre for micro Finance .
I would like to extend my deep sense of gratitude to all staff of Cmf and NIAM, Jaipur for their support
during the project.
I also want to take this opportunity to show my sincere thanks to my entire batch mates and friends who
were there when I needed them the most.
Thanks goes to Dr. Hema Yadav, Deputy Director, PGPABM, NIAM for his guidance and moral support,
which has always been there with all the students.
Thanks to Almighty. Words cannot express my gratitude towards my parents and my family throughout my
project and supporting me all through.
The financial support from Centre for micro Finance for this project is gratefully acknowledged.
Regards,
2. Executive Summary 13
19. Recommendations 63
22. References 71
The efficiency of marketing for fruits and vegetables in India has been of significant concern in the recent
years. Poor efficiency in the marketing channels and inadequate marketing infrastructure are believed to be
the cause of not only high and fluctuating consumer prices, but also too little of the consumer rupee reaching
the farmer (Kaul 1997, Ashturker and Deole 1985).
Agricultural marketing is a process, which starts with a decision to produce a sellable farm commodity, and
it involves all aspects of market structure or system, both functional and institutional, based on technical and
academic considerations and includes pre and post harvest operations, assembly, grading, storage,
transportation and distribution.
There are various channels for vegetables selling or disposal, through which growers can sell their
vegetables. However his choice is based on comparative cost, price received, and readiness to sell. No
significant differences are obtained among the channels, but they are full in existence and followed in the
marketing of various vegetables, though some of these may be location specific.
Marketing problems can better be understood through in-depth study of commodity marketing at farm level.
Marketing pattern differ from place to place and commodity to commodity. Its dimension also varies from
rural to urban areas.
Highly perishable nature of vegetables made their marketing system more costly and complex. Timely
procurement of vegetables in bulk is of immense importance for the traders. Transportation plays an
important role in vegetable marketing. Spatial equilibrium can be attained through effective transportation.
The study of existing scenario of the following crops was done in the Jaipur Districts‟ mandi:
1. Onion
2. Tomato
3. Green Chilli
4. Potato
5. Kakdi
The survey of following Mandi was done to study the existing situation of marketing of the above-
mentioned vegetables:
1. Terminal Market(Mohana Mandi)
2. Chomu Mandi
3. Kisan Mandi
4. Janta Market Mandi
5. VKI No-14
6. Subhas Nagar Mandi
7. Sodala Mandi
RESEARCH OBJECTIVES:-
To study different vegetables market channels for understand and identify the existing practices and
gap at different level of chain from vegetable producer to consumer
To identify the value addition at each level of the chain and its affect on the income of the vegetable
producers and vendors.
To identify the financial needs of vegetable vendors and how to increase the income level of
vegetable vendors.
To study the vegetable vender‟s to know his business and what problems they facing and how CmF
recommend that problem would be solved.
To find out the ways by which CmF can do work for betterment and development of small and
marginal traders.
RESEARCH DESIGN: -
Mapping vegetable market of Jaipur city and vicinity of Jaipur.
Track out back ward and forward linkages from potential mandis.
Prepare a questioner for vegetable grower, vegetable vendors (Road side vendors, Thelewala, and
small vendor), commission agents, whole seller, and retailer.
Visit to vegetable producing district/areas to get the data regarding acreage, production, preferred
varieties in different districts for knowing the scenario of vegetables.
Collection of primary and secondary data for different vegetables regarding area, production, and
productivity.
Collecting month wise arrivals figures of the different districts in Rajasthan for vegetables. Finding
out the model of trade, cost of transportation and other costs involved when trade of vegetables
happens.
Research Methodology: - The study proposed involves decision making and is based on
understanding the behaviour of the entire chain from the farmer to the vegetable vendors. The survey
included informal in-depth personal interview aligned with the objective of the research.
Primary data collection: Market Research in Jaipur; to know the status of vegetables production, price
trends, value chain, and market potential. Survey will be done in vegetable associations, various vegetable
grower, traders, middle man and suppliers.
Secondary data collection: Survey also included web browsing, Institution, Magazine for collection of
data.
Sources of Information: - The information collected was based on both primary data as well as
secondary data sources. The secondary data sources were the background study made through the Agri
economic literatures, Internet, Newspapers, Books and magazines, Agricultural offices and Mandi boards.
Primary data are collected from following sources;
Vegetable Growers
Commission Agents
writing. Although the data collection was through structured questionnaires, an open discussion in a guided,
The tools used to analyze the data were Excel using averages and simple percentages.
20. 04/07/09
Presentation
21. Final report submission 20/07/09
Value chain analysis of vegetables is an important task as it focuses on end to end movement of vegetable
starting from farmer, trader, middle man, wholesaler (Masakhor), retailer, and vendor and at last reaches to
consumer.
During the project, emphasis was given to study the present value chain of vegetables and giving importance
to the vegetable vendors. First of all five vegetables were selected based on the volume traded and its
importance in human consumption. The selected vegetables are Tomato, Potato, Onion, Green Chilli and
Kakdi.
The survey area for this project was Jaipur. Visit was made to all the mandis in Jaipur and adjoining areas
from where vegetables arrive to the mandi and playing a major role in vegetable value chain. Discussions
were made with people involved in value chain.
Farmer, trader, middle man, wholesaler (Masakhor), retailer, vendor, and retail stores also visited to get a
clear cut view of vegetable value chain in Jaipur region. This report speaks comprehensively about the:
Fresh vegetables are highly perishable commodities, which makes the marketing of such commodities quite
difficult. It is an expensive affair to get these commodities transported by refrigerated vans always
everywhere. The transportation and logistics cost to the extent of 40-50% is included in the price paid by the
end consumers.
As the production and marketing of agricultural produce depends on many factors as Rainfall, Export
demand, Domestic demand, Government policies, the market for vegetables are still more unpredictable.
CmF has taken a great initiative to analyze value analysis of vegetables to know this vegetable marketing
business and take initiative to work for development of vegetable vendors.
The detailed study of different players in the distribution network was done to know the existing scenario of
movement of fresh vegetables in Jaipur. Farmers grow the vegetables in Chomu, Bassi, Sanganer, and
Viratnagar tehshil region at large scale.
1400000
1200000
1000000
800000
600000 2007-08
400000 2008-09
200000
0
Brinjal
Fenugreek
Tomato
kakdi
pea
cauliflower
Onion
spinech
Tinda
Simla Mirch
cabbage
pointed guard
ridge guard
Green Gram
Lady finger
Potato
green chilly
bottle guard
Jack Fruit
bitter guard
VEGETABLE
9000
8000
7000
(Total Sale in Rs Lac)
6000
5000
4000
2007-08
3000 2008-09
2000
1000
Vegetavbles
Bhindi (Lady H H H H Y Y Y Y Y Y H H
Finger)
Bitter Guard H H H Y Y Y Y Y Y H H H
Bottle Guard H H H Y Y Y Y Y Y H H H
Brinjal Y Y Y Y Y Y Y Y Y Y Y Y
Cabbage Y Y Y H H H H H H H Y Y
Capsicum H H H Y Y Y Y Y Y H H H
Carrot Y Y H H H H H H H H Y Y
Cauliflower Y Y Y H H H H H H H Y Y
Coriander Y Y Y Y Y Y Y Y Y Y Y Y
Cucumber H H H Y Y Y Y Y Y H H H
French Bean H H H Y Y Y Y Y Y Y H H
Methi Y Y Y N N N N N N N Y Y
(Fenugreek)
Palak (Spinach) Y Y Y N N N N N N N Y Y
Pumpkin Y Y Y Y Y Y Y Y Y Y Y Y
Radish Y Y Y H H H H H H Y Y Y
Ridge Guard H H H Y Y Y Y Y Y H H H
Sponge Guard H H H Y Y Y Y Y H H H H
Tinda (Round N N N N Y Y Y Y Y N N N
Guard)
H-Hybrid Available
N-Not Available
Y-Available
A value chain is a chain of activities. Products pass through all activities of the chain in order and at each
activity the product gains some value. The chain of activities gives the products more added value than the
sum of added values of all activities. It is important not to mix the concept of the value chain with the costs
occurring throughout the activities. A graded vegetable can be used as an example of the difference. The
grading activity may have a low cost, but the activity adds much of the value to the vegetable, since a rough
ungraded vegetables is significantly less valuable than a graded vegetable.
Examine of the value chain of an enterprise to ascertain how much and at which stage value is added to its
goods and or services, and hot it can be increase to enhance the product the product differentiation
(competitive advantage).
Onion: -
India produces around 80 lakh tonnes of onion. The national onion production was 80.56 lakh tones in 2007-
08. This production was increased by 10 lakh tones from last year, as it is clear from the graph below.
9000 8056
8000 7082
7000 6434.6
6000
5000
4000
3000
2000
1000
0
2004-2005 2005-2006 2006-2007
years
Production
Arrival pattern: Arrival to the mandi is from the villages near Jaipur. Arrival in those months is high which
coincides with harvesting period of onion. Month wise arrival for last 12 months is been given below.
Months May- June- July- Aug- Sept- Oct- Nov- Dec- Jan- Feb- March- April-
08
08 08 08 08 08 08 08 09 09 09 09
Arrivals 4080 3950 3200 2544 1841 2228 2463 2065 1750 1599 1604 1884
(in qt)
3000
2500
arrival (in quintals)
2000
1500
1000
500
0
Months(2008-2009)
A
B Red or pink Round to oval 125-175 gm Number of flakes-1
Number of leaves is the most important factor as the onion with the 2 flakes can withstand the transportation
of 30 – 45 days whereas the onion with 1 flake can generally survive for the 15-20 days. It is the most
important criteria as it decides the price of super quality produce.
Price Decided by the traders: Generally price is totally decided by the demand and supply pattern. There
are many factors which influence the mandi price.
The mandi is highly linked with the price pattern of Chomu, Nasik, Delhi, Indore, Bhopal, Vashi,
Ahmedabad, Surat, Nadiad, Bangalore, Raipur, and Kolkatta. Prices in these mandi do have an effect
on the price of onion in Jaipur.
Second factor which influence which affect the price is the requirement by the exporter. If their
requirement is very high then the prices are generally high. One thing which is very contrasting in
nature is that all these factors have an effect on the price of A-grade quality onion and not on the
medium and low grade onion. These grades prices are generally decided by their arrival in the mandi
and the production in that area. Generally the arrival pattern in the mandi is:
Months Jun- July- Aug- Sept- Oct- Nov- Dec- Jan- Feb- Mar- Apr-
08 08 08 08 08 08 08 09 09 09 09
Prices 417 385 535 666 672 780 1016 1121 1196 1017 1002
(Rs per
qt)
Sources: - Horticulture information magazine
1200
price in Rs per quintals
1000
800
600
Series1
400
200
0
Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09
Months
Compiled from the statistics released by Lok Sabha Unstarred Question No. 46, dated 24.07.2006.
NA: Not Available. Note: Provisional Data.
11%
30% 12%
8%
16% 15%
1%
8%
Maharashtra Karnataka Bihar Orissa Andhra Pradesh west Bengal Rajasthan Others
In Rajasthan total annual production production of tomato is 55177 MT in 2006-07. About 41% of total
annual production is in Jaipur district. The major tomato producing districts of Rajasthan are Jaipur, Kota,
Bundi, Jalore and Tonk, which together contribute about 67% of total production in Rajasthan.
30% 11%
12%
8%
16% 15%
1%
8%
Maharashtra Karnataka Bihar Orissa Andhra Pradesh west Bengal Rajasthan Others
33%
41%
14%
3%
5%
4%
Arrival pattern:
Months May- Jun- July- Aug- Sept- Oct- Nov- Dec- Jan- Feb- Mar- Apr-09
08 08 08 08 08 08 08 08 09 09 09
Arrivals 2264 1006 1586 2101 1623 1591 1506 1704 2033 1954 1895 1941
( In qt)
Horticulture information magazine
The arrival of tomato is peak during the month of Jan-may. In the month of May nearly 2264 quintals of
tomato comes to Jaipur vegetable market. Later on arrivals decreases and reaches low in the month of June.
Graph shows this trend very clearly.
2000
Quantity (quintals)
1500
1000
500
0
May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09
Months
There are mainly four grades of tomato being traded in the market.
Sorting: Sorting, Filling in bags, & Stitching is done in the markets from where the produce comes to this
mandi. For local tomato sorting and grading is done based on the market requirement it is being sent. Sorting
is very time consuming process. Generally the sorting comes out to 15 to 20 paise per kg.
Storage: Tomato is not stored in this mandi; the produce is sold on the same day it arrives to the market.
Loss in Handling and transport:
There are three major types of losses in case of tomato during handling and transportation.
Weight Losses, due to moisture loss (4-5%)
Rupturing of tomato (5-10%)
Rottening (4-5%)
Generally if the produce is fresh and it has been brought from the farm then these losses are very low.
Traders are ready to give more prices to this type or fresh produce because they can transport it to distant
location. Loss in the rainy season is much higher than the normal season. Rottening is much higher in the
rainy season. Rupturing losses can be reduced by handling the produce carefully and packing them in
corrugated cartons or plastic trays, arranging in such a way that the weight of the upper tomatoes do not
rupture the bottom ones. Rottening losses can be reduced carefully by sorting the lot. Even a single rotten
tomato in the lot will spread the infection and many tomatoes in the lot will be rottened.
Wooden Boxes:
There are two types of wooden boxes. banglore box or local box. Banglore box contain 20 kg of produce
where as local box contain 22 kg of produce. One wooden box generally contains 30 kg of produce and cost
calculation for 30 kg is as follows:
Cost of one wooden box – Rs 15
Cost of labour for sorting- Rs 5
Cost of labour for making boxes- Rs1.50
Cost for labour for loading and unloading- Rs 4
This all calculation brings the cost of packing for wooden box to Rs24 to 28 per box having tomato of 20 kg.
Generally wooden slabs are supplied by the saw mills near the market area and these slabs are arranged to
form the boxes by the local labour. After that produce is filled in the box.
Plastic Crates:
Plastic crates are quickly replacing the wooden boxes in the market. These plastic crates are generally liked
by the traders because of easy handling and to have a good idea of quality of produce. One plastic crate
contains 25-26 kg of tomato. Cost of one plastic crate is Rs145. These plastic crates are also available in
second hand. Second hand cost of these crates is Rs125. Generally the packing cost of crates comes around
Rs26 per crate for 26 kg.
Distribution Pattern- Jaipur market produce goes to distant market in India. Some destinations are served
round the year by this market. Delhi is one of the market which is served round the year. Produce goes to
market of Jodhpur, Ajmer, Agra, Pune Punjab and Haryana. Produce also goes Pakistan from chomu mandi.
Jun-08 July- Aug-08 Sept- Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar- Apr-09
08 08 09
794 769 631 933 1089 1710 1497 766 522 526 446
1200
1000
800
600 Series1
400
200
0
Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09
Months
Local Market
Middle man
commission
Middle Man
7.85% (Adatiya) Trader Export
Middle man
Wholsaler Commission
(Masakhor) 7.85%
Middle man
commission
7.85%
Other Out Side
Market
Consumer
Middleman get 7.85% commission in this commission they give 1.6% tax to mandi Samiti and 0.15%
weighing, they get 6.10%. This commission based on farmer how much Rs vegetables sale. For example
farmer sale total 100Rs vegetables in mandi to vendor then middleman get commission 7.85Rs from vendor.
In Chomu most of vegetables come from nearby villages which are at the distance of 8, 5 and 12 Km
respectively from Chomu mandi. All kind of operations starts in mandi in early morning. Farmer brings their
vegetables to the mandi and kept for selling in front of the shop of middleman or Adatiya. After that trader,
retailers, vendor and wholesalers auctions for vegetables in terms of Rs per Mann (Rs per 40 Kg). The
highest price offering person gets vegetables and pay to the Adatiya.
Middleman: -
Middleman highly involve in this business all vegetables pass through middleman in this mandi. He get
7.85% commission from trader, wholesaler, retailer, vendors whatever farmer sale in mandi through
middleman. Middleman pays 1.6% tax to mandi.
Middleman also provides credit facility to the farmers and vendors so they become loyal to sale and buy
vegetables through middleman.
Mandi is totally under control of middlemen and prices are of their choices.
Trader:-
In this mandi traders procure vegetables from farmers through middlemen. They can not purchase vegetables
directly from farmers because farmer always tend to sell his produce through middlemen in mandi.
Method of procurement: - open auction
Selling vegetable:- Terminal market, Azadpur mandi(Delhi), Ajmer, Udaipur, Jodhpur, Sikar, Kota, Bundi,
Bharatpur, Agra and some other parts of UP.
Wholesalers are known as Masakhor in mandi. They purchase vegetables from farmers through middlemen
and pay commission (7.86 %) to them. They seats on a mat or gunny bags on mandi ground perform their
business. They do their business up to 12.00 noon only.
Whom to sell: -
Local and nearby vegetable vendors which they want less quantity (< 10-12 Kg).
Consumers who want more quantities.
Some wholesaler sales their vegetables in Jaipur mandis (Mohana mandi, Kisan mandi, Janta market
mandi, Ambabari, Subhash Nagar mandi).
Vendors: -
Vendors purchase vegetables from farmers through middlemen in mandi and pay commission (7.86 %) to
them. If they want less quantity then they go to wholesalers.
Local Market
Middle man
commission
Middle Man
7.85% (Adatiya) Trader
Middle man
Wholsaler
(Masakhor)
Commission
Middle man 7.85%
commission
7.85%
Other Out Side
Market
Consumer
Trader:-
In this mandi traders procure vegetables from farmers through middlemen. They cannot purchase vegetables
directly from farmers because farmer always tend to sell his produce through middlemen in mandi.
Method of procurement: - open auction & under cover method1.
Selling vegetable:- Chomu mandi, Azadpur mandi(Delhi), Ajmer, Udaipur, Jodhpur, Sikar, Kota, Bundi,
Bharatpur, Pali, Chandigarh, Surat, Ahmdabad, Vadodra, Pune, Agra and some other parts of UP, MP &
MH.
Wholesaler (Masakhor):-
Wholesalers are known as Masakhor in mandi. They purchase vegetables from farmers through middlemen
and pay commission (7.85 %) to them. They seats on a mat or gunny bags on mandi ground perform their
business. They do their business up to 1.00 P.M. only.
Whom to sell: -
Local and nearby vegetable vendors which they want less quantity (< 10-12 Kg).
Consumers who want more quantities.
Some wholesaler sales their vegetables in Jaipur mandis (Chomu mandi, Sodala mandi, Chandpole
Mandi, Johari Baazar mandi, Kisan mandi, Janta market mandi, Ambabari, Subhash Nagar mandi).
1
Under cover methods apply in Potato and Onion purchasing and selling.
Vendors purchase vegetables from farmers through middlemen in mandi and pay commission (7.85 %) to
them. If they want less quantity then they go to wholesalers.
Local Market
Middle man
commission Middle Man
7.85% (Adatiya) Vendor
Middle man
Wholsaler Commission
(Masakhor) 7.85%
Middle man
commission
7.85%
Other Local
Market
Other Local
Mandis
Retailer
(Vendors)
Consumer
Wholesaler (Masakhor): -
These procure fruit and vegetables from Chomu, Mohana and Janta market mandi by auction on a large scale
through middlemen pays commission (7.85 %) and sale whole day to consumers and small vegetable
vendors on fix rate basis.
Transportation cost2: - From Mohana mandi Rs. 15/bag of 50-55 kg
From Chomu mandi Rs.20/bag of 50-55 kg
Vendors: -
Purchase vegetables from here itself from wholesaler and Adatiyas. Sell either in wheel cart or on mat at the
same place. If they purchase from Adatiya then they have to pay commission of 8 %.
2
In case of onion & potato
Other Local
Market
Other Local
Mandis
Retailer
(Vendors)
Consumer
Middlemen commission: -
a) From farmer Rs. 2 /palli3.
b) Vendor 8 % on total purchase.
c) From wholesaler 8 % on total purchase.
Wholesaler: -
Wholesaler purchases the vegetables from Chomu and Mohana and Janta market mandi to sale here and
sometimes from VKI mandi itself.
Retailer: -
Purchase from farmer through middlemen and from wholesaler and sells to nearby areas.
Trader - - - - -
Retailer 10 8 10 10 12
3
Tomato 1 palli = 20 kg, cucumber 1 palli = 10-12 kg, Green chilly 1 palli = 10 kg
Local Market
Middle man
Commission
Middle man 8%
commission 8%
Middle Man Trader
(Adatiya)
Wholsaler
(Masakhor) Vendor
Middle man
commission 8%
Other mandis
Other Local
Market
Other Local
Mandis
Retailer
(Vendors)
Consumer
Sodala mandi
Chandpolee mandi
Jhotwara mandi
Kisan Mandi
Ambabari
Badi Chopad
Chhoti Chopad
In this mandi vegetable comes from various villages and other mandis: -
Middle man
commission 8% Middle Man
(Adatiya)
Wholsaler
(Masakhor) Middle man Vendor
commission 8%
Other Local
Market
Other Local
Mandis
Retailer
(Vendors)
Consumer
Procurement of vegetables: -
Mohana Mandi
Chomu mandi
Janta Market mandi
Ambabari it self
Trader - - - - -
Wholesale - - - - -
Wholesaler
Middle Man
(Adatiya)
Middle man
commission 8%
Wholsaler Vendor
(Masakhor)
Other Local
Market
Retailer
(Vendors)
Consumer
Vegetable Procure from: - (All green vegetable comes from Janta market mandi & Chomu mandi).
Janta Market
Chomu Mandi
Mohana Mandi
Kisan mandi
Vendor procures onion and potato by open auction and undercover method from Mohana mandi and other
vegetables procure from wholesaler (Masakhor).
Transportation charges:-
4
One potato bag =50-55kg, one onion bag = 50kg
5
One tomato crate = 22-25kg
Open auction: -
In open auction, the basis of physical appearance gives the initial bid. The auctioneer is appointed by APMC
but here also malpractices are observed (Auctioneer is not loyal to APMC) and also not present with every
CA6. Bidding amount is quoted for 5 -10kg. If the farmer or trader has not come along with the produce CA
may cheats by not telling the actual value for the produce. This method of sale is usually followed for good
quality fruits and rarely in potato, onion and garlic.
Mutual negotiation: -
When one or two buyers come then price is determined by mutual negotiations between CA and buyer based
on current mandi rate and earlier auctioned rate. For onion, potato, garlic this method is followed.
Farmer/sellers say on the price: If farmer/collector is present there then CA ask them whether they are
agreeing to sell at the price offered by buyer. If they agree then deal becomes final. Now they ask on phone
also. But the power to sell remains in the CA hand still.
6
CA-commission agent
There is chance of mismatch between actual traded and record traded through commission agent this activity
may give huge margin to commission agent.
He is also giving vegetables on credit basis to trader, wholesaler and vendor. Trader purchase vegetables
from farmer through commission agent but in real situation commission agent are purchasing vegetables
from farmer on behalf of trader. Then trader will pay money to the commission agent within 15 days without
interest.
In case if trader unable to pay money after 15 days commission agent will charge interest of 5% 7 of the total
value of trade. In case of vendor and wholesaler these have to pay money to the commission agent within 7
days otherwise he will charge a 5% interest.
If wholesaler and vendor pay money within 7 days then they get 1% concession on total commission
charged by commission agent8.
Note: interest rate charged by commission agent to others totally depend upon the relationship between
them, if relationship is good and strong the commission agent will not charge interest.
7
5% interest rate means Rs5 on Rs100 per month.
8
Actual commission charged by commission agent is 7.85%=( 1.6% mandi tax+ 0.15% weighing charge+ 6.1% profit) after
concession got by wholesaler or vendor commission agent charges will be in this composition 6.85%= 1.6% Mandi
tax+0.15%Weighing Charges+5.1% profit.
On other hand these commission agents are providing credit to the farmers for growing crops and make them
loyal to sell vegetables to the commission agent. And also provides seed, fertilizer & pesticide to farmer.
In mandis price decides by middleman he control prices in mandi.
Vegetable Trader
Traders are purchasing vegetables from farmers through commission agent by open auction method. These
traders are arbitraging the vegetables according prices prevailing in different mandis and making profit out
of them, Traders also purchasing from other states. Trader also sells vegetables to the trader in the same
mandi and other mandis. Suppose if they sold vegetables to the traders in the same mandi they will charge a
margin of 2%.
If trader purchases vegetables from farmer through commission agent then he will pay 7.85% commission to
the commission agent. Sometimes traders also purchasing vegetables at field level in this there is no
commission charges.
Traders are doing value addition activities like cleaning and grading of vegetables after purchasing from
farmer through commission agents.
But in villages like Bassi, Devgoan, Kanota, Tigaria, Damodarpura, Jahota and Itawa traders are directly
purchasing vegetables (tomato and Green chilli) from farmers and doing value addition activities like
cleaning, grading and packing then these vegetables (Tomato and Green chilli) and directly sending to Delhi
Azadpur mandi. In this process traders are making good profit by eliminating commission charges and
mandi Tax.
S.No. Charges In Rs
1 Packing and grading cost Per bag 5
2 Transportation cost per Kg 1.3
3 Commission In % 7.85
4 Other costs Per Bag 3
Source: Based on Primary data collected in different mandis.
Note: In direct purchasing of vegetables by the trader at field level there is no commission charges (7.85%)
Some traders also procuring vegetable for processed industries on agreement basis and these traders also
purchase vegetables for retail malls and hotels on commission basis. Traders are charging a commission of
2%.
Vegetable Wholesaler
Masakhor: The masakhor is a local term used for a functionary between the wholesaler and the retailer.
This functionary acts in mandi, and usually is a small wholesaler or a big retailer. He buys vegetables from
the market in sufficient quantity and then sells in small units to the retailers, vendors and consumers who
frequent the market.
Ladans: This term is used for transporters who buy from the mandi and sell it to the CA9 of small mandis of
other states. His profit is to take advantage of price differentials and he is thereby responsible for the
addition of time and space utilities.
Vegetable Vendor
Vendors are purchasing vegetables from farmers through middleman and they also purchasing from
wholesaler. There are two Methods of purchasing of vegetables by vendor through Middleman. First one is
open auctioning and second is Under cover Method. Under cover method was followed by the vendors for
9
CA- commission Agent
Vendors profiling:-
They sell vegetables in mandi at particular place and tin shaded shop. They procure large quantity of
vegetables then type „B‟ vendor.
16
14
12
10
Sale Price
8 Purchase Price
transportation Cost
6
Loss due to perishability
0
Potato Tomato Onion G.Chilly Kakdi
Loss % of vendors
20
18
16
14
12
10
Loss % of vendors
8
0
Potato Tomato Onion Green Chilly Kakdi
Per unit of Total cost (In Rs) 0.984 0.767 0.77 0.944 0.96
0.8
0.6
Per Kg of Total cost (In Rs)
0.4
0.2
0
Potato Tomato Onion Green Chilly Kakdi
0.6
0.5
0.4
0.2
0.1
0
Potato Tomato Onion Green Chilly Kakdi
per kg profit %
40.00
30.00
20.00
Profit %
10.00
Profit %
0.00
Potato Tomato Onion Green Chilly Kakdi
Profit per unit (In Rs) 0.315 3.035 3.605 5.419 5.158
1
0
Potato Tomato Onion Green Chilly Kakdi
Deposit scheme: -
We can provide to vendors one deposit scheme that can help saving money of vendors. In this scheme the
bank people will collect money in the evening from vendors at his place where vendor doing business.
Training: -
We can give training to vegetables vendor for his business that how they reduce his loss % and how they can
reduce perishabilty. Through training vendors can know about various banks and government scheme for
development of poor people.
We can provide knowledge about grading, packaging, labeling, storage, marketing techniques, how they can
compete against retail chain shops. Through training we can give motivation and tell about his strengths.
Reliance Fresh: -
Reliance retail (Reliance Fresh) is working on the philosophy of „farm to fork‟ whereby produce is
transported directly from the farmer to the consumer, thereby eliminating the middlemen and hence bringing
the prices at affordable levels.
The procurement operation of Reliance fresh works on Hub and Spoke model, where distribution centre
(DC) works a hub and various collection centers behaved like spokes. Each collection center fed by
respective cluster of villages, which grows different kinds of vegetable. These collection centers have the
facility of electronic weighing and simple cleaning and sorting facility. Farmer brings their produce in jeeps
and trolleys. Produce is weighed and instant cash payment is made. Sometime collection centre is unable to
procure required quality and quantity of vegetables (For e.g.: cabbage, cauliflower, Spinach, Broccoli etc.)
from the farmers due to various reasons like non availability of produce at the procurement centers,
seasonality of the produce etc. So such type of produce is generally procured by the CPC 10 from the local
mandis to meet the demand.
10
CPC- City Processing Centre
Merchandising flowchart: -
Fruit and Vegetable centre (Grading, Sorting, Batch Marking and Fixing price)
Stores
Ambabadi, Barkat Nagar, Chitrakut, Jawahar Nagar, Kalwar, Mahesh Nagar, Mansarovar, Murlipura,
Sultan House
Purchasers- The number of purchasers in a day has inverse effect over pricing but it is again largely
dependent on arrivals.
Last day rates- This act as basis for the next day price setting for middlemen.
Season (arrival of new variety): - As the season of fruit & vegetable dawns away so will be its price
and a new variety of the same commodity may fetch higher prices in the market.
Special occasions- festival and marriages tend to increase retail prices of the F&V.
Left over stock: If left over stock is high, then despite low arrivals, prices may not fluctuate.
Farmers bring their produce in mandi on trucks with fruits packed in wooden boxes or cartoon and
vegetables in gunny bags. They sell their produce through authorized commission agents of the mandi. The
bulk purchase is done through auctions in the morning and small quantity purchase is made by rate
negotiation. The current rate of commission is 6% of the total value of products purchased and mandi fee is
1.6% (both of these are charged from the purchaser). The weighing and loading charges are Rs.2/bag and
Rs.3/bag respectively. The produce that is bought are kept in crates and loaded on truck having 1 tone
capacity.
2>Collection centre-
It is located in Morija, 35 km away from Jaipur. Time of operation of CC is from 11:30 a.m. to 10:00 p.m.
The facilities at collection centre are weighing machine, grading and sorting table. The arrival of fruits and
vegetables is more from villages surrounding Jaipur. Contact farming has helped ABG officials to build
good rapport and relationship with farmers. The number of farmers covered through contact farming is 250.
Case
CHOMU (Jaipur), May 13: Scene I: It is shortly after dawn on May 9. Narayan brings six baskets (each
weighing about 40 kg) of tomatoes to a vegetable market at Chomu, some 36 km from Jaipur. He quotes a
price of Rs 650 per basket to commission agent Subhash Saini, who pooh-poohs the quotation. Narayan
haggles for a while and then relents: Rs 350 per basket of 40 kg tomatoes is what he gets.
Scene II: - Narayan, who netted Rs 2,100 for his sale, has to pay four per cent of it to ``Adatiyas'', who
maintain the mandi at Chomu.
Scene III: - Saini, the commission agent who bought the tomatoes from Narayan and other farmers, has them
loaded into a medium-sized truck. The supply heads for Delhi, and not long after it has reached the Capital,
finds its way into domestic and commercial kitchens at the rate of Rs 40 a kg.
Even if reasonable commission, transport and other overheads are factored in, the kilo of tomatoes that were
purchased by the agent for less than Rs 10 could normally not have magically cost the end-user four times
more. And thereby hangs the tale of astronomically-priced vegetables in urban and semi-urban India. Tell
farmer Narayan that the same kilo of tomatoes costs Rs 40 in Delhi and he will laugh at you, incredulously.
The middleman is clearly inflating the price of vegetables in this country. Through a well-networked cartel
that operates in farming India, produce is procured as relatively low prices and hawked to the consumer at
staggering prices by artificially controlling supply. Narayan's sale on the morning of May 9 was clearly in
distress: a day earlier there was a heavy downpour at his village Chetwara, nine km away from Chomu. In
ankle-deep water, Narayan and his family salvaged their tomato crop from his five-bigha. ``Tomato
cultivation get spoiled during rains and thus we have to collect our produce and get it to the mandi as soon as
we could,'' Narayan said.
At 5 am the following day, the hastily-harvested tomatoes were loaded into a camel-driven cart that was
headed for Chomu mandi. Unfortunately for Narayan, the mandi was officially closed because of Purnima.
But time, tide and tomatoes wait for none. Narayan did not want to take his produce all the way back to his
village: apart from the effort, there was no telling how his prematurely-picked produce would survive the
journey. Just as he was wringing his hands in despair, along came the commission agent. Since this was
obviously a buyers' market situation, Narayan provided easy pickings for commission agent Saini. For every
one Saini there are at least ten Narayans.
As the morning wore out, commission agent Saini came forward with feigned disinterest to do a deal with
Narayan. Narayan feebly demanded Rs 650 per 40 kg for good quality of tomato and Rs 300 for half ripe
ones.
Saini, however, offered one price of Rs 350 per 40 kg for Narayan's entire produce. Narayan immediately
gave in and settled for Saini's price.
Saini went through the same routine with other farmers who, like Narayan, were desperate to sell their
produce. But Saini's tempo had still space to accommodate more vegetables. He then went for other cash
crops - brinjal and ghiya (gour) and easily pocketed them at rate of 25 paise a kg and 50 paise a kg
respectively.
As there was more space in his tempo, he moved on to the Manoharpur mandi, located 15 km away from
here. Here too, the mandi was closed, but some farmers had shown up to sell tinda. Saini preferred tinda,
which is being sold at Rs 16 a kg in Delhi markets. But he got it for only 75 paise a kg from Jagdish, a local
farmer from Manoharpur. He filled the remaining space of the tempo and sent it to Tilak Nagar mandi in
Delhi and part of the supply to Chandigarh.
According to Saini, tomato cost him Rs 15 a kg at Delhi after the transportation charges. But, in the same
breath, he also told that he had paid Rs 2,000 for the tempo, which as to go to Delhi and parts of Haryana.
A tempo carries 200 baskets of tomato (each basket of 25 kg). And if Saini pays Rs 2,000 for the tempo, the
transportation charge comes to Rs 1.25 a kg only, thus tomatoes costing him nearly Rs 11 a kg. He auctions
the produce to vegetable merchants in Delhi and Haryana for a profit of about Rs 5-6 a kg. The merchants, in
this chain of middlemen, corner maximum profit, ranging between Rs 9-10 a kg. And local vendors do not
lag behind the merchants, as their profit margin is only one to two rupee less than the vegetable merchants.
Thus, tomatoes get dear by 26 to 30 rupees, which is being shared by the commission agent, vegetable
merchant and vendors.
Some vegetable merchants are at more advantageous position, as they hire their agents and appoint them at
Chomu and nearby mandis, thus eliminating `commission' agents in the link of middlemen. The merchants
pay salaries to these hired agents.
At Chomu, one of the main four centres to supply tomato to Delhi, are commission agents from Delhi,
Haryana, Chandigarh, Ahmadabad and Poona. During the tomato season, they throng the Chomu Mandi
(about 200 km‟s away from Delhi) and corner most of the tomato supply at cheaper rates.
More interestingly, these agents have spread their network in the tomato grower villages around Chomu and
do not even allow the villagers to reach the mandi. On a road to Chomu off the Delhi-Jaipur highway, there
are a number of villages growing tomato.
At Samarpura village, the agents had camped six days ago. They opened a working mandi (in local parlance
called `tal') on a small vacant plot and invited farmers to sell their produce. Farmers were too happy that
they would not have to travel all the way to Chomu.
References: -
Horticulture department
Agri. Economic Magazine
Horticulture information magazine
Wikipedia.org
Agricultural produce marketing committee
National Institute of Agricultural Marketing
www.indiastat.com/
www.rajasthankrishi.gov.in/
www.nhm.nic.in/
www.marketingteacher.com/
www.indianexpress.com/
Directorate of Horticulture, Govt. of Rajasthan
Directorate of Horticulture, Govt. of Rajasthan & Fertilizer Association of India
Terminal market, Jaipur