UNIVERSITY OF AGRICULTURAL SCIENCES, BENGALURU, KARNATAKA

Report on

SAFAL FRUIT & VEGETABLES AUCTION MARKET

BANGALORE, INDIA
(For the partial fulfillment of the course BEV 404)

SUBMITTED TO

MR. M.K ARVINDA KUMAR ASSISTANT PROFESSOR DEPARTMENT OF ECONOMICS AGRICULTURE COLLEGE HASSAN By DEEPAK KUMAR 4th B.tech (Food Science & Tech.) FSL (H) 011 DEPARTMENT OF FOOD SCIENCE AND TECHNOLOGY AGRICULTURE COLLEGE, HASSAN

1) Background 2) The Existing System 3) Brief Introduction of the Strategy 4) Concept and components of the New Marketing System a. Auction Market b. Backward Linkages c. Forward Linkages 5) Lesson learned 6) Problem 7) Solution

Background
Ministry of Agriculture, Government of India, requested the NDDB to undertake a study of the existing wholesale marketing system and formulate an implementable a project for fresh fruit and vegetables marketing. The findings of study indicated that the existing system produced a vested interest in that the present system which was controlled by commission agents. It also realized that the system cannot easily be transformed. Therefore, the only way to modernize the marketing of horticulture produce was to set up an alternate system that operated parallel to, and in addition to the present system.

The Existing System

There were a large number of unorganized small farmers lack market power; There was a low share of the consumer price to the farmer; Farmers dependence was on credit from traders who did not provide any other

service; The system provided no incentive for quality; Agricultural Acts emphasized regulations and restrictions on marketing activity thereby creating monopoly situations. Lack of standardization and enforcement of quality norms. Markets were poorly designed and congested;

Brief Introduction of the Strategy

Involved the establishment of an alternate marketing structure that provided incentives for quality and productivity thereby improving farmers income. The new structure was supported by improved technology and methods. The unique element of this new approach was that it integrates growers, wholesalers and retailers into the market system in contrast to the previous market supply chain structure.

Concept and components of the New Marketing System

Establishment of an Auction Market Backward Linkages Farmer Associations Forward Linkages Cash & Carry Retail Stores

Auction Market
Electronic online auction system that facilitated the central auction conducted by the Auction Market Authority Participation of registered buyers by; Being physically present in the Auction Halls at the Market Pre-bidding through internet & telephone The market provided a common business platform to the producers and the buyers Auction of graded, standardized and quality produce Transparent and fair competition Mechanized material handling Clean, hygienic and healthy market environment and infrastructure

Professionally managed

Backward Linkages
The market was also supported by 225 horticultural Farmers Associations (FAs) organized throughout India. Of these, about 150 FAs were located and facilitated in various production areas in Bangalore. A further 75 located in main producing areas of India. 225 FAs were linked to 45 Collection Centers (CCs). These CCs were equipped with facilities to meet the specific or special requirements of buyers, in terms of quality, packing and weight etc. The CCs provided facilities like sorting, cleaning, dressing, grading, weighing, packing and storage etc. Production enhancement was introduced by improving varieties, agronomic and plant protection practices, pre and post-harvest management. Logistics support was offered in terms of packing and transportation of produces arranged on behalf of the growers. All produce was sorted to standard quality, grade, weight and packing. The number of fresh fruit and vegetable items along with their different grades handled at the Auction Market was more than 200. The Quality Assurance Team of the Auction Market developed quality specifications, weight per packs & type of packing material for each item handled by the Auction Market.

Forward Linkages
12 Cash & Carry Stores owned and set up by the Auction Market in the City were franchised to cater tothe requirements of the local retailers 4 Distribution Centers at the complex were established for the requirements of the large institutional buyers. Cold Storage facility was available at Auction Market to the Wholesalers or other Market Users.

Incentives to the Wholesalers

Assured availability of quantity and quality of fresh fruit and vegetables Sorted, graded and quality checked produce in wholesaler / retailer friendly packs for easy handling and transport Short term storage facility for the fresh produce State- of- art Fruit Ripening facility

Lessons Learned from the SAFAL

New Concept of Trading, the need of the food supply chain in understanding the system Inconsistency in standardization of food quality issues Over reliance and delays in backward linkage supply chain including the lack of unity between Backward Linkages and Marketing.

Problem
Marketing and lack of awareness and development of orientation programs. Lack of demand within the market of produce produced resulting in alternative supply lines and product losses Lack of awareness on promoting cold store opportunities, benefits within the food supply chain Shortage of buyers specializing in auction methods.

Solution
Support of international trade and goods movement through international corridors by means of modernization logistic opportunities, interaction of networks and multimodal (combined) transpor Growth of exports, and provision of food safety of the state; Creation of modern transport-logistic structure integrated into international transport-logistic system of goods movement and services; Effective use of transit potential, favorable geopolitical situation of the country and advantages of availability of international directions of highways, railways, air corridors;

The structure of trade-logistic Centre

Logistic centre

Building and constructions

Transport service Customs service Laboratory Certification Information marketingce ntre Local net, server, internet

Warehouses Hangars Refrigerating premises Directorate Office premises Hotels Cafes and other necessaral personal

SGP of productio n Processing of productio n utomatiz ation storage equipment Weigh house

Exhibition halls Broker and juridical service Wholesale Platform for trade from wheels Retail sale

Local railways

Equipment

Trade area

Railway branch lines Auto roads including trunk lines Automobil e parking Recreation of the territory