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Context:

 India’s fruits and vegetables (F&V) sector, though rapidly growing and nutritionally critical, lags behind cereals in policy focus and institutional support. Replicating Amul’s dairy success here is challenging but possible—with the right scale, policy backing, and leadership.

Current state of India’s fruits and vegetables (F&V) Sector

F&V sector is growing faster than cereals and contributes roughly 30% to the value of crop agriculture. It is also more nutritious. However, it receives far less policy focus and institutional support compared to cereals.

The sector suffers from unorganized value chains, inadequate storage, and limited processing facilities, leading to seasonal surpluses, price crashes, and post-harvest losses.

About 8.1% of fruits and 7.3% of vegetables are lost post-harvest, amounting to 37% of total post-harvest losses worth Rs 1.53 trillion annually.

Farmers receive only about 30% of the consumer price due to fragmented value chains.

What lessons can the F&V sector learn from dairy success?

India’s dairy sector, led by Amul under Verghese Kurien, transformed the country from a milk-deficient nation to the world’s largest milk producer (239 million tonnes in 2023-24). 

Amul’s cooperative model ensures that farmers receive 75-80% of the consumer price. The key lessons for the F&V sector include:

• Organized value chains: Efficient aggregation, processing, and market linkages.
• Farmer empowerment: Collective action through cooperatives or Farmer Producer Organizations (FPOs).
• Policy support: Strong institutional backing and visionary leadership.

Challenges in replicating the Amul model for the F&V sector

• Diverse commodities: Unlike milk, F&V involves multiple crops, each requiring specialized infrastructure and handling.
• Seasonality and regional concentration: F&V production is highly seasonal and region-specific, leading to price volatility.
• Post-harvest losses: Lack of storage and processing facilities results in significant losses.
• Fragmented value chains: Farmers receive a small share of the consumer price due to middlemen and inefficiencies.

What role can Farmer Producer Organizations (FPOs) play in transforming the F&V sector?

FPOs can replicate the cooperative model of Amul by:

• Aggregating produce: Collecting F&V from small farmers to achieve economies of scale.
• Value addition: Grading, sorting, packaging, and processing to reduce losses and increase profitability.
• Market linkages: Connecting farmers directly to domestic and export markets, ensuring better price realization.
• Empowering farmers: Providing access to technology, credit, and training.

What is the Sahyadri Farmer Producer Company Ltd (SFPCL), and how has it succeeded?

SFPCL was founded in 2004 in Nashik, Maharashtra, is a successful FPO that started with 10 farmers and now spans 252 villages, 31,000 acres, and over 26,500 farmers. 

Its annual turnover grew from Rs 13 crore in 2011-12 to Rs 1,549 crore in 2023-24. Key factors behind its success include:

• Integration of value chains: Aggregation, processing, and direct market linkages.
• Export focus: 35.4% of revenue comes from exports to 41 countries, with grapes being the dominant export.
• Processing infrastructure: Investments in tomato processing (ketchup, puree, sauce) ensure price stability during surplus.
• Farmer benefits: Farmers receive about 55% of the Free on Board (FOB) price for exports.

What are the key interventions needed to scale up the F&V sector?

To replicate the Amul model, India needs:

• Strengthening FPOs: Provide institutional support, working capital, and infrastructure. Use digital platforms like the Open Network for Digital Commerce (ONDC) and blockchain for transparency.
• Policy support: Revive and expand initiatives like Operation Greens and the National Horticulture Mission with clear accountability and visionary leadership.
• Commodity-specific value chains: Focus on processing at least 10-20% of F&V produce to stabilize prices and prevent distress sales.
• National Fruit and Vegetable Board: Establish a body similar to the National Dairy Development Board (NDDB) to streamline market linkages and promote efficient value chains.

Can Sahyadri Farms become the “Amul” of the F&V sector?

Sahyadri Farms has demonstrated the potential to be a “divadandi” (lighthouse) for the F&V sector, much like Amul was for dairy.

Its success in integrating small farmers into global value chains, ensuring price stability, and generating employment (including 32% women) provides a blueprint for scaling up. However, replicating this success nationwide requires:

• Expanding the model to 10,000 high-impact FPOs.
• Strong government support and institutional frameworks.
• A visionary leader like Verghese Kurien to drive the transformation.

Way Forward

The Amul model aims to ensure farmers receive 55-60% of consumer price, similar to the dairy sector. This can be achieved by building organized value chains, investing in processing and storage infrastructure, strengthening FPOs, providing market access, and establishing a National Fruit and Vegetable Board.

Replicating this model can reduce post-harvest losses, stabilize prices, and transform the livelihoods of millions of small farmers, making the sector a cornerstone of India's agricultural economy. 

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Source: 

INDIAN EXPRESS