**India**: As the fruits and vegetables sector grows, it faces challenges such as post-harvest losses and price instability. With examples like the Sahyadri Farmer Producer Company, experts consider whether similar cooperative models can transform this vital industry, seeking solutions through better infrastructure and policy support.
India’s fruits and vegetables (F&V) sector is experiencing rapid growth, currently contributing roughly 30 per cent to the value of the country’s crop agriculture. Despite its nutritional benefits and significant economic contribution, the sector has historically received less policy focus and institutional support compared to cereals. The lack of organised value chains, appropriate storage facilities, and adequate processing capabilities leaves the F&V sector vulnerable to seasonal gluts, price instability, and substantial post-harvest losses. According to a report by NABCONS in 2022, around 8.1 per cent of fruits and 7.3 per cent of vegetables are lost in the post-harvest value chain, resulting in total annual losses estimated at Rs 1.53 trillion.
Farmers typically receive around 30 per cent of the price consumers pay for F&V, a disparity that poses challenges for the sector’s sustainability and profitability. This situation raises a crucial question for policymakers: can the F&V sector replicate the success of the dairy sector in India? The dairy industry, led by cooperatives such as AMUL and spearheaded by Verghese Kurien, has transformed India from a milk-deficient nation to the largest producer globally, with 239 million tonnes produced in 2023-24.
However, replicating this model for the F&V sector is complex. Unlike dairy, which revolves around a single commodity, F&V encompasses multiple commodity value chains, each requiring specialised infrastructure. The highly seasonal nature of these products, often harvested in specific regions, makes them susceptible to severe price fluctuations. A potential solution to this issue involves integrating farmers into well-structured value chains that encompass aggregation, grading, sorting, packaging, processing, and direct market access both domestically and internationally.
The role of Farmer Producer Organisations (FPOs) is essential in this transition. The Sahyadri Farmer Producer Company Ltd (SFPCL) serves as a notable example of success within this model. Established in 2004 in the Nashik district of Maharashtra by Vilas Shinde, SFPCL began with just 10 farmers and has grown into a vast network of over 26,500 registered farmers working across 31,000 acres in 252 villages as of 2023-24. The company’s annual turnover has seen significant growth, escalating from Rs 13 crore in 2011-12 to Rs 1,549 crore in 2023-24.
SFPCL generates 64.6 per cent of its revenue from the domestic market, with exports contributing 35.4 per cent to 41 countries. The revenue is predominantly derived from grapes and tomatoes, which together account for 51.7 per cent of the total revenue, with grapes leading in export share at 63.9 per cent. The organisation has successfully created curated pathways for small farmers to access global markets, adhering to stringent quality standards and good agricultural practices.
Key to SFPCL’s success is its investment in processing infrastructure. Tomatoes represent a significant portion of SFPCL’s domestic revenue, making up 35 per cent, with all of this produce directed towards processed products like ketchup and sauce. This processing capability has enabled price stability for farmers, especially during periods of oversupply. Additionally, the expansion of processing facilities has resulted in more than 6,000 jobs, with 32 per cent of positions held by women in the 2023-24 period.
The achievements of Sahyadri Farms highlight a potential framework for scaling operations across the broader F&V sector. As of August 2024, the Indian government aims to establish 10,000 FPOs, with 8,875 successfully registered. Should the country succeed in scaling such impactful FPOs, it could revolutionise the F&V sector similarly to the dairy industry. The government’s support in strengthening FPOs through institutional assistance, better access to infrastructure, and digital integration could prove instrumental in this endeavour.
Additionally, reviving and expanding initiatives such as Operation Greens and the National Horticulture Mission remains imperative. Launched in 2018, Operation Greens aimed to stabilise prices for perishables but has struggled due to limited funding and a lack of comprehensive leadership. A focused approach on commodity-specific value chains, ensuring a minimum level of processing for 10 to 20 per cent of F&V, may also address issues related to distress sales and price volatility.
To optimise the potential of the F&V sector, the establishment of a National Fruit and Vegetable Board, similar to the National Dairy Development Board, is proposed to streamline market connections and improve price realisations for farmers. The question posed to stakeholders is whether Vilas Shinde can emerge as the transformative figure in this sector akin to Kurien’s impact on dairy. The ongoing success of Sahyadri Farms offers promising insights, but achieving escalation requires substantial backing, appropriate policies, and a dedicated champion for growth in the F&V domain.
Source: Noah Wire Services
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