Maharashtra ADB DPR

FINAL REPORT
Operationalising the Agribusiness

Infrastructure Development
Investment Program- Phase II
-Maharashtra-
November 2010
Prepared by
Client:
Asian Development Bank
OPERATIONALISINGTHEAGRIBUSINESSINFRASTRUCTUREDEVELOPMENTINVESTMENTPROGRAMPHASEII
FINALREPORT
TableofContents
1
1.1
1.1.1
1.1.2
1.2
1.2.1
1.2.2
1.3
1.4
Introduction
Projectoutlineandintent
ValueChainapproach
HubandSpokemodel
IntegratedvalueChainRegions
AgriMarketingandInfrastructure
SelectionofRegions
Methodology
StructureoftheReport
1
1
1
2
3
3
3
4
9
NashikIntegratedValueChain
10
2
2.1
2.1.1
2.1.2
2.2
2.2.1
2.2.2
2.3
2.4
3
3.1
3.1.1
3.1.2
3.2
3.3
3.4
3.4.1
3.4.2
3.5
3.6
4
4.1
4.1.1
4.2
5
5.1
5.1.1
5.1.2
5.2
5.2.1
5.3
5.4
6
6.1
6.1.1
6.1.2
6.2
6.2.1
6.2.2
6.2.3
6.3
6.4
12
13
13
16
18
18
18
18
19
20
21
21
24
25
26
28
28
28
29
30
31
33
38
41
43
44
44
46
47
47
48
48
49
50
50
55
57
57
57
58
58
59
Focuscrop:Pomegranate
Valuechainanalysis
Tradechannelofpomegranate
Pricebuildupalongthevaluechainofpomegranate
InfrastructureAssessment
PostharvestInfrastructure
MarketingInfrastructure
Gapsidentifiedinthevaluechain
PotentialforIntervention
Focuscrop:Grape
ValueChainAnalysis
TradechannelofGrapes
PricebuildupalongthevaluechainofGrapes
Wineries
ExportofGrapes
PostHarvest/MarketingInfrastructure
InstitutionalInfrastructure
Gapsinthevaluechain
ProposedInterventions
FocusCrop:Banana
ValueChainAnalysis
ExistingPostHarvestInfrastructureandInstitutionalMechanism
Gapsinthevaluechainandpotentialinterventions
Focuscrop:Onion
Valuechainanalysis
TradechannelofOnion
PricebuildupalongthevaluechainofOnion
Gapsinthevaluechain
Focuscrop:Tomato
Valuechainanalysis
Tradechanneloftomato
PricebuildupalongthevaluechainofTomato
Postharvestinfrastructure
InstitutionalInfrastructure
Gapsinthevaluechain
Potentialforintervention
FINALREPORT
DPR:NashikIntegratedValueChainProject
7
Spoke:Deola
7.1
FocusCropsandEstimatedThroughput
7.2
ProposedFacilities
7.2.1
PackHouse
7.2.2
Warehouse
7.2.3
OtherFacilities
8
Hub:PimpalgaonBaswant
8.1
8.2
ProposedFacilities
8.2.1
PackHouse
8.2.2
PackShedAmbient
8.2.3
BananaRipeningFacility
8.2.4
AmbientOnionStores
8.2.5
DryWarehouse
8.2.6
ColdStore
8.2.7
OtherFacilities
9
Spoke:Sinnar
9.1
9.1.1
PackHouse
9.1.2
PackShedAmbient
9.1.3
AmbientOnionStores
9.1.4
OtherFacilities
10
Spoke:Chandwad
10.1
10.2
ProposedFacilities
10.2.1
PackHouse
10.2.2
OnionStorage
10.2.3
OtherFacilities
11
Spoke:Sangamner
11.1
11.2
ProposedFacilities
11.2.1
PackHouse
11.2.2
AmbientPackShed
11.2.3
OnionStore
11.2.4
OtherFacilities
12
Spokes(Banana):Anturli,Padalasa,Kajgaon,Galangi
12.1
FocusCropsandEstimatedThroughputbyCluster:
12.1.1
ClusterI
12.1.2
ClusterII
12.1.3
ClusterIII
12.2
ProposedFacilities
12.2.1
PackHouse
12.2.2
12.2.3
OtherFacilities
13
FinancialAnalysis
13.1
IVCsinMaharashtra
13.2
NashikIVC
13.2.1
ProjectDetails
13.2.2
ProjectCost
13.2.3
Preliminary&PreoperativeExpenses
13.2.4
MeansofFinance
13.2.5
KeyOperatingAssumptions
13.2.6
FinancialPerformance
14
EconomicAnalysis:IVCNashik
60
61
61
61
62
64
64
65
65
66
66
67
68
69
69
69
69
71
71
71
73
74
74
76
76
76
77
78
79
80
80
81
81
83
84
84
85
85
85
85
86
87
87
89
89
90
90
90
90
91
94
95
95
98
100
ii
FINALREPORT
14.1
14.2
14.3
14.4
14.5
14.6
14.6.1
MethodologyandAssumptions
QuantificationofBenefits
QuantificationofCosts
CostBenefitStatement
CalculationofEconomicIRR(EIRR)andNPV
EconomicAppraisalResults
MajorEconomicIndicators:
AurangabadAmravatiIntegratedValueChain
15
FocusCrop:SweetLime
15.1
ValueChainAnalysis
15.2
15.2.1
PostHarvestInfrastructure
15.3
GapsintheValueChain
15.4
PotentialInterventions
16
FocusCrop:KesarMango
16.1.1
Valuechainanalysis
16.1.2
Pricebuildupalongthevaluechainofmango
16.2
InfrastructureAnalysis
16.2.1
16.3
Gapsinthevaluechain
16.4
17
FocusCrop:Orange
17.1
ValueChainAnalysis
17.1.1
ValueChainActorsandFunctions
17.1.2
GradesinOrange
17.2
PostHarvestInfrastructureandInstitutionalArrangements
17.3
Gapsinthevaluechain
17.4
18
FocusCrop:Lemon
18.1
ValueChainAnalysis
18.1.1
PricebuildupalongthevaluechainofLemon
18.2
18.2.1
PostHarvest/MarketingInfrastructure
18.3
Gapsinthevaluechain
18.4
19
FocusCrop:Banana
19.1
ValueChainAnalysis
19.1.1
ValueChainActorsandFunctions
19.2
19.2.1
PostHarvestInfrastructure
19.3
GapsintheValueChain
19.4
PotentialInterventions
DPR:AurangabadAmravatiIntegratedValueChainProject
20
Spoke:Warud
20.1
20.2
ProposedFacilities
20.2.1
AmbientOrangePackhouse
20.2.2
DryWarehouse
20.2.3
Addon/CommercialFacilities
21
Spoke:Anjangaon
21.1
21.2
ProposedFacilities
100
101
103
104
104
105
105
106
108
108
113
113
114
114
115
115
118
120
120
121
121
122
122
123
126
128
129
129
131
131
133
135
135
135
135
137
137
138
141
141
142
142
143
144
144
144
145
146
146
147
147
148
iii
FINALREPORT
21.2.1
21.2.2
21.2.3
21.2.4
21.2.5
22
22.1
22.2
22.2.1
22.2.2
22.2.3
23
23.1
23.2
23.2.1
23.2.2
23.2.3
23.2.4
24
24.1
24.2
24.2.1
24.2.2
25
25.1
25.2
25.2.1
25.2.2
25.2.3
25.2.4
26
26.1
26.1.1
26.1.2
26.1.3
26.1.4
26.1.5
26.1.6
27
27.1
27.2
27.3
27.4
27.5
27.6
27.6.1
BananaPackHouse
AmbientOrangePackhouse
DryWarehouse
Otherfacilities
Spoke:Akola
ProposedFacilities
DryWarehouse
AmbientPackingShed
BusinessCentre
Spoke:Sangrampur
ProposedFacilities
PackHouse
DryWarehouse
OtherFacilities
Spoke:Jalna
FocusCropandEstimatedThroughput
ProposedFacilities
AmbientPackHouse
Otherfacilities
Spoke:Paithan(Pachod)
ProposedFacilities
PackHouse
SweetlimeAmbientPackHouse
DryWarehouse
Otherfacilities
FinancialAnalysis
AurangabadAmravatiIVC
ProjectDetails
ProjectCost
Preliminary&PreoperativeExpenses
MeansofFinance
KeyOperatingAssumptions
FinancialPerformance
EconomicAnalysis:IVCAmravatiAurangabad
MethodologyandAssumptions
QuantificationofBenefits
QuantificationofCosts
CostBenefitStatement
CalculationofEconomicIRR(EIRR)
EconomicAppraisalResults
MajorEconomicIndicators:
148
150
151
151
151
152
152
152
153
153
154
155
155
155
156
158
158
158
159
159
159
160
161
162
162
163
163
165
166
166
167
167
167
167
170
170
171
173
175
175
176
178
179
179
180
180
Maharashtra:IntegratedValueChains
181
28
28.1
28.1.1
28.1.2
28.1.3
28.1.4
28.1.5
182
182
182
182
183
183
183
ConceptualPlansforFacilities
ConceptualPlansforfacilitiesatselectedlocationsoftheIVCs
PlanningConcept
MasterPlan
Buildings
Services
Road&Parking
iv
FINALREPORT
28.1.6
29
29.1
29.1.1
29.1.2
29.1.3
29.2
29.2.1
29.2.2
29.3
29.4
30
30.1
30.2
30.3
30.4
30.5
30.5.1
30.5.2
30.5.3
30.5.4
31
31.1
31.2
32
32.1
32.2
32.2.1
32.3
32.3.1
32.4
32.5
32.6
33
33.1
33.1.1
33.1.2
33.1.3
33.1.4
33.2
33.2.1
33.3
33.3.1
33.3.2
33.3.3
33.3.4
33.4
33.4.1
33.5
33.5.1
33.5.2
34
34.1
34.1.1
34.1.2
34.1.3
34.1.4
GreenArea
StakeholderConsultations
IVCsinMaharashtra
Farmers
Traders/Wholesalers/Localprocessors/ColdChainOwners
IndustryPlayers
StakeholdersMeetingatMumbai
SuggestionsfromStakeholdersonPolicyIssues:
SuggestionsonProposedInterventions:
StakeholdersMeetingatRahejaCentrePoint,Mumbai
ListofPotentialInvestors
AssessmentofMarketDemand
AssessmentofFoodmarketinIndia
Growthdriversofvalueaddedfoodproducts
AssessmentofFoodretailIndustry
Majorplayersinorganizedfoodandgrocerysegment
Assessmentofmajorconsumptionmarkets
Delhi
Mumbai
Kolkata
Patna
ImpactAssessment
EnvironmentalAspects
SocialandPovertyAssessmentandMitigation
CapacityBuilding
CapacityBuilding:NeedsAssessment
Farm/ProductionClusterlevel
CapacityBuildingatProductioncluster/farmlevel
CapacityBuildingatHubSpokeLevel
CapacityBuildingathubandspokelevel
CapacityBuildingCoverage
Implementationarrangements
SummaryFinancialsforMaharashtra
PolicyandRegulatoryAspects
IssuesrelatingtopolicyAgribusinessinfrastructure
RegulatoryIssues
Credit
TechnologyInduction
CapacityBuilding
RecentPolicyInitiativestakenbytheGovernment
StateLevelAPMC
InitiativestakentopromoteAgribusinessInvestmentinMaharashtra
AmendmenttoAPMCAct
GrapesProcessingIndustryPolicy,2001
PackageSchemeofIncentives,2007
Others
ExistingSchemesPertainingtoAgribusinessinfrastructure
ImpactofSchemesonDevelopmentofAgribusinessInfrastructure
PolicyInitiativesCriticaltoSuccessfulImplementationofAIDP
ApplyingtheIntegratedValueChainapproach
SuggestedPolicyInterventions
ImplementationFramework
ProposedModelsunderPublicPrivatePartnership
ApproachtoPublicPrivatePartnership(PPP)inIndia
ExperienceofPPPinIndia
PPPinAgribusinessInfrastructure:
ViabilityGapFundingScheme(VGF)
183
199
199
199
200
200
201
201
202
202
203
205
205
206
207
209
210
211
212
213
214
215
215
215
216
216
216
217
218
218
220
220
220
221
221
221
223
223
224
224
225
225
226
226
227
228
229
229
229
229
230
231
231
231
231
232
233
FINALREPORT
34.2
34.2.1
34.2.2
34.2.3
34.2.4
34.2.5
34.2.6
34.3
34.4
34.5
ChallengesofVGFmodelforAgribusinessInfrastructureunderAIDP
UnderVGF,ownershipofprojectassetshastoremainwiththeGovernment
Privatesectorisgivenacontract/concessionforprojecttermtorecoveritsinvestments
Userchargesneedtobedeterminedbeforeimplementationoftheproject
NeedforaflexiblePPPstructureforAIDP
BOTvsBOTAnnuitymodels
SPVModel
PreferredOperationModelforAIDP
ProposedProjectGrant,O&MFrameworkandRecoveryofCharges
ProjectManagementFramework
234
234
234
235
235
236
236
236
239
240
Annexure
vi
OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II
FINAL REPORT
1 INTRODUCTION
IL&FS Cluster Development Initiative Limited (IL&FS Clusters) has been appointed by Asian
Development Bank (ADB) to prepare a Detailed Project Report for operationalising the
Agribusiness Infrastructure Development Investment Program Phase II in the states of Bihar
and Maharashtra. The Agribusiness Infrastructure Development Investment Program (AIDP)
is a Program of Asian Development Bank in the agriculture sector in India.
This document is the Final Report.
1.1 PROJECTOUTLINEANDINTENT
AIDP is aimed at addressing three main constraints to agriculture growth- outdated
technologies; lack of public investment in basic infrastructure and limited diversification.
Taking into account the Integrated Value Chain (IVC) approach, the program targets
improving physical and institutional linkages along agricultural value chains through support
of agribusiness market infrastructure; support infrastructure like last mile roads, power,
water; systems relating to market intelligence; and, capacity building and
strengthening/establishing value chain linkages.
The intent of the program is to achieve accelerated investment in agriculture and to support
related infrastructure in rural areas, along the Integrated Value Chains. The interventions may
target several or all of the following:
Aggregation facilities
Sorting, grading, packaging
Storage (ambient and controlled temperature)
Value addition and market intelligence
Distribution facilities including logistics
Value chains for end-to-end linkages
1.1.1 ValueChainapproach
The Integrated Value Chain approach guides the process and forms the underlying structure
for this initiative. Of the several motivations to employ a value chain approach, the
development orientation is partial to one that drives economic growth with the aim of
poverty reduction through the integration of large numbers of micro- and small players (in
this case, farmers, traders, commission agents etc) into increasingly competitive value chains.
By influencing the structures, systems and relationships that define the value chain the aim is
to help farmers, traders and other stakeholders to improve (or upgrade) their products and
processes, and thereby contribute to and benefit from the chains competitiveness. Through
FINAL REPORT
this approach, the government would enable the small and mid-size playersincluding
small-scale farmersto create wealth and escape poverty 1.
The value chain approach; as discussed here, though not especially different from other
economic development approaches is distinct in that it simultaneously emphasizes several
features like:
A market system perspective
A focus on end markets
Understanding the role of value chain governance
Recognition of the importance of relationships
Facilitating changes in behaviour
Transforming relationships
Targeting leverage points
Empowering the private sector through its greater involvement
Taking a value chain approach necessitates understanding a market system in its totality:
from input supply to end market buyers; the support systems that provide technical, business
and financial services; and the business/market environment in which the sector operates.
Such a broad scope of analysis is needed because the principal constraints to competitiveness
may lie within any part of this system or the environment in which it operates. While it may
be beyond the capacity or outside the mandate to address certain constraints, the failure to
recognize and incorporate the implications of the full range of constraints generally leads to
limited, short-term impact or even counter-productive results. 2
A careful understanding of these dynamics underpinned the project from its early stages right
up to the final proposal. In particular, with an eye to effective implementation, special
attention has been directed at the proposed institutional arrangements and capacity building
support across levels. To elaborate, this approach envisages to bring about positive changes
through increased competitiveness, to make visible and measurable differences across the
board. The focus of the value chain approach is thus on transforming relationships
particularly between players linked vertically in the value chainto:
facilitate upgrading to become competitive, and
adapt to changes in end markets, in the enabling environment or within the chain to
remain competitive
1.1.2 HubandSpokemodel
Use of the concept of the hub and spoke model in the
value chains is another key aspect of the project. This
takes into account existing players in the supply
chains and resolves them into the new, ordered and
1
2
TheValueChainFrameworkBriefingPaperwww.microlinks.org/ev.php?ID=21629_201&ID2=DO_Topic
ibid
FINAL REPORT
more efficient structures that employ the use of improved infrastructure and systems.
Assignment and clarification of roles along with support of the appropriate infrastructure, or
the wherewithal to execute the functions leads to improved efficiencies, greater value
realisation and, finally, improved
competitiveness.
The
illustration
alongside
demonstrates the flow and activities
from spoke to hub and from there
to the consumption markets.
1.2 INTEGRATEDVALUE
CHAINREGIONS
One of the most industrialized
states in the country, Maharashtra
has achieved good economic development over the years with agri & allied sectors
contributing 14% of GSDP even as agriculture is the livelihood of 55% of the population.
It is the largest producer of fruits in India (11mn MT annually) and a leading producer of
grape, pomegranate and orange. It is the second highest producer of banana and ranks seventh
in vegetable production (6.4 mn MT annually) in the country. Maharashtra is the highest
producer of coarse cereals and cotton and ranks second in sugarcane production in the
country. .
1.2.1 AgriMarketingandInfrastructure
The state has 294 main markets and 607 sub-markets of APMCs with their size varying from
<1 Ha to >100 Ha; also, infrastructure facilities in the markets vary greatly. In the state, 291
main markets and 54 sub-markets have been computerized and connected through internet to
MSAMB.
At present, 75% of the value of produce traded through APMCs comprises rice, paddy,
wheat, soyabean, onion, potato, tur, gram, jaggery and cotton.
Marketing channels of horticultural crops are different and may vary, mostly including preharvest contractors; the routing may involve farmer cooperative societies, APMC market- to
varying degrees and direct deals with traders/commission agents of distant markets, by some
farmers.
1.2.2 SelectionofRegions
The regions identified for the purpose of this project in Maharashtra lie in different agroclimatic zones and vary considerably in terms of agricultural production in both volume and
variety. The selected regions are also significant in terms of quantum of produce- which have
been flagged as the focus crops being studied, for the respective regions.
Regions identified for the purpose of the project are:
Nashik Region
Aurangabad-Amravati Region
3
FINAL REPORT
NashikRegion
This region includes Nashik, Ahmednagar and Jalgaon districts.
The districts in this region collectively produce 72% of the states total production of banana,
51% of grape, and about 29% of pomegranate, of Maharashtras total production. The area
also accounts for 85% of onion, about 70% of tomato, cauliflower and cabbage produced in
the state. Based on these considerations, and the assessed potential for development, the focus
crops identified for the region are pomegranate, onion, grapes, banana, and tomato.
This region is also among the highly industrialised, also in terms of agri-business
infrastructure and food processing units. Nasik and Jalgaon produce 38% and 14% of Indias
grape
and
banana
respectively. Synergies
between
the
IVC
Aurangabad
projects
and
other
Amravati
initiatives
proposedRegion
Nashik
Mega
Food
Park,
Region
Modern
Terminal
Market, NAIP and other
initiatives add to the
focus on this region for
this programme.
Aurangabad
AmravatiRegion
This region covers Aurangabad, Amravati, Buldhana, Jalna and Akola districts, in
Maharashtra. The region is known in particular for sweet lime in Aurangabad and Jalna,
Kesar mango in Aurangabad ; lemon and banana in Buldhana, and orange in Amravati.
Maharashtra ranks second among Indian states in production of sweet lime, producing about
23% of the total production in the country, with 98,400 Ha of area under sweet lime
cultivation and an annual production of 678,700 MT. This cluster produces about 87% of the
total sweet lime grown in the state.
The major orange producing districts in the region are Amravati and Akola. The state ranks
fifth in terms of production of lemon among Indian states producing about 6.3% of Indias
total production of lemon.
Though the regions production of mango is small compared to the mango-belt in North
India, Kesar mango is fast cornering a niche segment of the market with its distinctive taste
and the efforts of the local growers in Aurangabad region.
In sum, the selected areas have very good potential for interventions of the kinds envisaged
under the project.
1.3 METHODOLOGY
In the course of the assignment, an assessment was made of the current status of produce,
existing supply linkages and systems of aggregation, transportation, trade, sale and
processing in the identified areas. Feasible clusters of high value agricultural /horticultural
4
FINAL REPORT
produce and high volume produce in Maharashtra, were specially flagged for examination
along with an assessment of gaps, as also of the extant infrastructure.
The different phases of the assignment were as follows:
Phase I: Identification of regions for the integrated value chains of high value/volume
agricultural/horticultural produce in the regions.
Phase II: Detailed field survey and analysis, gap analysis, identification of stakeholders
Phase III: Stakeholder-consultations
Phase IV: Structuring and detailing of project components (including locations and
financials) for each of the selected integrated value chains
Phase V: Stakeholder-consultations for pre-testing models and project finalization
PHASEI:Identificationofregionsfortheintegratedvaluechainsofhigh
value/volumeagricultural/horticulturalproduceintheregion
IL&FS Clusters undertook to identify the major regions for Integrated Value Chains of high
value/volume agricultural/horticulture produce based on primary and secondary studies and
in consultation with some key stakeholders; representatives of the concerned departments of
the state. The methodology adopted for the purpose was:
A study of various existing data e.g. relating to production, processing, marketing,

infrastructural facilities, along with a mapping of the same.
To validate findings of secondary data, limited field assessments were carried out.
A team of agribusiness supply chain experts mapped the state for production clusters, related
infrastructure, existing systems and assessed the market demand and supply for different
crops. Based on this, different high value and volume crop regions for the integrated value
chains were flagged for consideration. The potential for value addition to the produce
through processing at different levels to increase efficiency, preserve quality and/or reduce
wastage/spoilage was additionally taken into account and assessed
Detailed production data of agri/horticultural crops was collected and analyzed. The status of
agri/horticultural processing, marketing and infrastructure including storage, connectivity,
etc. in the clusters were also assessed in the context of production on the one hand and its
consumption market on the other.
Focused field assessments were undertaken (of a limited scope) to validate the secondary data
in some areas in the envisaged integrated value chains.
PHASEII:Detailedfieldsurveyandanalysis,gapanalysis,identificationof
stakeholders
A survey team was put in place to undertake detailed field surveys for each of the identified
integrated value chains. As part of this exercise, IL&FS Clusters undertook an assessment of
the range of activities under the value chain to understand the gaps and inefficiencies in order
to identify sub-sectors with the most potential for growth. The methodology adopted is
outlined below:
A detailed structured questionnaire survey was canvassed for mapping the entire
value chain. This included assessment of marketable surpluses, mapping of the
5
FINAL REPORT
existing supply chain and identification of gaps at each stage, with added focus on
institutional arrangements and infrastructure including marketing infrastructure,
existing technology in use and potential for appropriate technology induction etc. The
process of mounting the survey involved:
o
Identification of blocks to be surveyed, based on production areas of the

district that are known for the identified crops; villages from the identified
blocks were visited by the survey team to collect data
A two-level assessment- to gauge from farmers about the clusters, crops and
quantity, and also obtain information regarding the same from DHOs, DAOs
and market players such as commission agents to know their assessment of
clusters and quantity. This helped check, verify and triangulate information
and views.
The survey team was led by the agribusiness supply chain experts, and in addition to
the canvassed questionnaire, included focus group discussions at the cluster level,
interviews with key stakeholder representatives and group consultations. This process
was spread over six weeks.
Consultations were a key part of the project development exercise, extending beyond
the survey period, and, included stakeholders such as farmers, consumers, traders,
agro-enterprises, processors, exporters of raw and value added products, as also
private sector firms not currently involved but with the potential for participation in
the project.
The prepared action plan was validated through focus group discussion and bring out
environmental and social acceptability, financial feasibility, legal and other issues.
Social and environmental impact experts made independent assessment to understand

the context
The agribusiness supply chain experts assessed the demand for high-value crops and valueadded products in the domestic and international markets in consultation with the product
specialists on the team, and identified sub-sectors in the integrated value chains with the most
growth potential. Institutional, infrastructural and logistical barriers for product categories
were also identified.
The cold chain experts conducted an independent assessment in the field to assess the cold
chain needs for the identified integrated value chains, in view of the highly perishable highvalue products to suggest cold chain solutions for each integrated value chain. The cold chain
experts along with the logistics expert mapped the existing supply chains to identify the
temperatures ranges ideal for the selected produce types and their requirements throughout
the supply chain. For the focus crops, the following type of information was collected.
Crop harvest times;
Processes required for different crops picking, washing, grading, packaging,

storage;
Existing types and numbers of facilities for undertaking these operations;
Transport-types used, to and from these facilities;
Road networks connecting the clusters and markets, and also the facilities;
Main sources of consumption for the different crop types un-organized retail,
organized retail (supermarkets), export;
6
FINAL REPORT
Typical number of stages in the existing supply chains commission agents,

aggregators, traders, markets, etc.
Cold chain technology such as temperature controlled facilities and transport that is
in use in the existing supply chains.
Based on findings from the field studies, areas where key improvements can be made towards
quality, waste reduction and greater value realisation from the produce, with the development
of cold chain facilities, were flagged. The identification of cold chain interventions focused
on post harvest cold-chain management, reducing metabolic rates (respiration and
degradation by enzymes) and water loss/volume reduction and wilting, appropriate time for
handling and processing, and, maintaining predictable consistent quality at delivery points.
Based on this, facilities, relevant technologies and transportation has been identified and
scoped.
Infrastructure specialists worked closely with the agribusiness supply chain specialists and
the cold chain specialists to identify and rationalize requirements and evolve the applicable
Hub and Spoke concept, located within the Integrated Value Chains.
A parallel assessment of the consumption markets in the existing supply chains took into
account the following aspects:
1. Key market requirements and factors that affect price and shelf life such as quality,
packaging, presentation, processing and Good Agricultural Practice (GAP)
requirements.
2. The specific activities and unit cost of the specific activities needed to meet market
requirements, e.g. mechanical harvesting, grading and packaging, cool storage, etc.
3. The commodity volumes and the synergies that may be developed between different
products for harvesting, grading, packaging, processing, storage and transport.
Outputs from these were used to define the scope of the infrastructure requirements and
provide the design parameters for value-adding plant and equipment as well as agribusiness
centres, storage and handling facilities.
A social development specialist assessed aspects of the project critical for the projects
sustainability. Poverty and Social Assessment was undertaken by the social development
specialist on a sample basis pertaining to key indicators of poverty and human development.
Given the nature of the activities, the project does not have a significant land acquisition
component that involves resettlement or any significant impacts to the indigenous peoples in
the areas.
PHASEIII:Stakeholderconsultations
The program aims at developing commercially sustainable integrated agri-infrastructure
projects; inputs and suggestions of potential investors in developing the projects have been
used to further develop the projects.
After the detailed field survey, the analysis and the gaps identified were discussed with a
range of key stakeholder groups, among them, farmers, consumers, agro-enterprises, research
and extension organizations, food processing industry, intermediaries in the value chain,
exporters and food retailers and private sector firms with potential for participation, etc. to get
their feedback on the analysis and understanding of the issues.
7
FINAL REPORT
These valuable inputs have been used at several instances for the accurate structuring and
detailing of project components in the integrated value chains.
These inputs have also informed the need to build capacities along the envisaged integrated
value chains.
PHASEIV:Structuringanddetailingofprojectcomponents(including
locationsandfinancials)foreachoftheselectedintegratedvaluechains
Based on the need assessment for each value chain, action plan were drawn-up and
stakeholder consultations undertaken to identify locations of hubs and spokes in each
integrated vale chain. International best practices were also used as applicable to benchmark
and inform the practises to be instituted along the value chains.
The cold chain specialist developed detailed designs of the identified cold chain elements of
the selected value chains along with costs- the infrastructure specialists developed the costs of
civil works and technical equipment, in consultation with the cold chain experts. Improving
efficiencies along the supply chain and greater value realisation were kept in focus.
The infrastructure specialist made an estimate of the civil works for buildings as well as for
supporting infrastructure like water and power supply, effluent treatment etc. using tabled
standard cost norms. The master plans of identified project structures in the selected value
chains have been included.
A market intelligence and information system has been envisaged an integral part of the
proposed interventions and knowledge centres have been proposed at hub and spoke
locations.
The project finance/PPP specialists along with agribusiness supply chain experts, cold chain
experts and infrastructure experts have developed detailed project costs for each value chain.
The project finance/PPP specialists have considered various PPP options for project
structuring. After detailed analysis of various operation models, most feasible options have
been recommended to ensure smooth project implementation. Project structuring for
determining various PPP options and identification of procurement options for various
components along with sources and quantum of investment from different sources and the
possible ways of meeting the O&M expenses of the assets for the value chain of each selected
product of project, are also included..
The agribusiness supply chain specialists explored existing farmer organizations
(groups/clubs/cooperatives/associations) in the identified value chains, and recommendation
for further formation of groups and capacity building have been included in the project with
a suitable institutional mechanism, to ensure that small and marginal farmers are included in
benefiting from the project.
PHASEV:Pretestingmodelsandprojectfinalization
In consultation with the strategic advisor, pre-testing of project components with potential
private sector investors and existing stakeholders has been carried out.
The legal/PPP contracts experts undertook to review existing legal frameworks in the states
with respect to the sub-project construction and implementation aspects.
FINAL REPORT
1.4 STRUCTUREOFTHEREPORT
The document, for Maharashtra, covers both Integrated Value Chains; Nashik and
Aurangabad-Amravati and the layout is as follows:
Map of region
Introduction- Separate sections detailing focus crops Pomegranate, Grape, Tomato, Onion,
Banana
Spoke description, proposed system
Proposed Locations for Hub and Spoke model, system
Proposed Integrated Value Chain Project
Map of region
Introduction- Separate sections detailing focus crops Sweet lime, Kesar mango, Orange,
Lemon, Banana
Spoke description, proposed system
Proposed Locations for Hub and Spoke model, system
Proposed Integrated Value Chain Project
Conceptualplansoffacilities,engineeringdrawingsetc.
Stakeholderconsultations
Marketassessment
Impactassessment
Capacitybuilding
Policyandregulatoryaspects
Implementationframework
Projectimplementationstructure
FINAL REPORT
NASHIKINTEGRATEDVALUECHAIN
Nashikregion,Maharashtra
FocusCrops
Pomegranate
Grape
Tomato
Onion
Banana
DPR:NashikIntegratedValue
ChainProject
DescriptionofHubandSpokes
10
FINAL REPORT
NashikRegion
IL&FS Clusters identified Nashik region for Integrated Value Chains of high value/volume
agricultural/horticulture produce based on a combination of factors like agricultural
production in terms of volume and variety, human and economic development, suitability for
development of integrated value chains and commercial viability of infrastructure projects.
The map below indicates the region covered under this Integrated Value Chain: This region
includes Nashik, Ahmednagar and Jalgaon districts.
Nashik
Region
The districts in this region collectively produce 72% of the states total production of banana,
51% of grape, and about 29% of pomegranate , of Maharashtras total production. The
area also accounts for 85% of onion, about 70% of tomato, cauliflower and cabbage
produced in the state. Based on these considerations, and the assessed potential for development,
the focus crops identified for the region are:
Focus Crops in this region are:
Pomegranate
Grape
Tomato
Onion
Banana
11
FINAL REPORT
2 FOCUSCROP:POMEGRANATE
Maharashtra, the largest producer of pomegranates in the country accounts for 70% of total
production of pomegranates. In 2007-08, total area and production of pomegranates in
Maharashtra was 98500 Ha and about 0.6 million MT respectively. Crop production and
productivity of Pomegranates in Maharashtra in 2007-08 have marginally declined from the
previous year. Solapur, Sangli, Nashik, Ahmedanagar, Pune, Dhule, Aurangabad, Satara,
Osmanabad and Latur are the major districts under pomegranate cultivation in the state.
Nashik district alone accounts for 26 % of the total production of pomegranates in the state.
In 2007-08, the total area and production of pomegranates in Nashik district was 9132 Ha and
0.15 million MT respectively. Most of the area under pomegranates in Nashik district is
concentrated in three talukas i.e. Malegaon, Satana and Deola.
Areaandproductionofpomegranatesintheidentifiedregion
Districts
AreainHa
ProductioninMT
Nashik
9132
155244
Ahmednagar
4388
30644
Jalgaon
3575
*Source: Directorate of Horticulture, GoM
27288
Ganesh, Mrudula and Bhagwa are the major varieties grown in the cluster. Bhagwa is the
preferred variety for export as well as for all new plantations in the region. Some of the major
varieties and their characteristics are mentioned below:
Ganesh: It is a prolific bearer. The fruit are very large with yellowish red rind and pinkish
aril with soft seeds. The average yield ranges from 8-10 kg per tree.
Mrudula: This variety has all the characters of the Ganesh variety except the arils are dark
red in colour. The colour of the arils in 'Ambe' bahar and 'Mrig' bahar is dark red in colour
while it is pink during the 'Hasta' bahar. The average fruit weight is 250-300 grams.
Bhagwa: Fruits of this variety are very attractive because of saffron coloured smooth and
glossy peel. Aril is cherry red in colour that is suitable for processing as well as table purpose.
Fruits have better keeping quality as compared to other varieties i.e. 12-15 days under
ambient condition. The variety is not susceptible to fruit crack and fruit drop. Because of
thick peel, this variety is also suitable for long distance transport and hence it fetches 2-3
times higher price as compared to Ganesh. It is a high yielding variety and the yield per tree
is around 30-40 kg.
Pomegranate is propagated through grafting. The plant starts bearing fruit from 2nd year
onwards. Recently, tissue-cultured saplings are also being planted in the area. Around two
hundred thousand tissue culture saplings were planted in the region last year, covering an area
of about 100 Ha, which were distributed free of cost by a private player (Jain Irrigations).
Around 80-90% of the farmers in the cluster use drip irrigation as availability of water is a
problem in many areas of the cluster. Pomegranate is harvested round the year in the cluster.
The fruit harvesting increases by 10-15% mainly from July to September and again from
November to March. Harvesting of the fruits is relatively low from April to June.
12
FINAL REPORT
Die back is among the major diseases of pomegranate in the cluster, which sometimes lead to
dying of entire orchard within two years. Black spot, fruit crack and fruit drop are the other
disorders found in cultivars of pomegranate.
Export of pomegranate from the cluster has started picking up in recent years after exporters
educated farmers on Good Agricultural Practices and requirements of international markets.
A few farms in the cluster are EurepGAP certified and about 4000-5000 farmers are in the
process of obtaining certification. Around 150 MT of pomegranates were exported in the year
2008-09 from the region mainly to United Kingdom, Holland, other European and gulf
countries.
2.1 VALUECHAINANALYSIS
2.1.1 Tradechannelofpomegranate
The following illustration depicts the various stakeholders of the pomegranates supply chain:
Various channels of the pomegranate supply chain
are mentioned below:
Preharvestcontract:
This is the most commonly used sales system of
pomegranates. Around 85-90% of the produce from
an orchard is sold under pre-harvest contract.
Farmers prefer to sell their entire produce from an
orchard to a contractor, irrespective of the size and
grade, because of lower price realization for lower
grades. The price is paid to the farmer on per kg
basis. After harvesting and aggregating the produce,
the pre-harvest contractor supplies pomegranates to
bigger APMC markets like Mumbai, Delhi etc,
where the traded is facilitated by a commission
agent. The produce is bought by wholesalers, who
does further distribution to semi-wholesalers and retailers.
PreHarvest
Preharvest
contractor
Village
aggregator
Commissionagent
Wholesaler
Semiwholesaler
Retailer
Consumer
Villagelevelaggregator
Around 10-15% of the produce from an orchard is sold through village level aggregators.
These fruits are very small in size at the time of harvesting of fruits by the contractor and
hence they are not plucked by the contractor.. These are plucked by the farmer later on and
sold through village level aggregators in APMC markets of Nashik, Malegaon and Satana.
The major players involved in trade of pomegranates are farmer, pre-harvest contractor,
village level aggregator, commission agent, wholesaler, semi-wholesaler and retailer. The
role played by major stakeholders and the value added at each stage is briefly captured below:
Farmer:
The average landholding of pomegranate farmers is around 8 Ha, which is spread into 3-5
land parcels. Around 50% of the land is used for pomegranate cultivation and the rest is used
13
FINAL REPORT
for growing other crops. As mentioned earlier, pomegranates are propagated through grafting.
The plants are sown in square system that accommodates 750 plants in a hectare. Most of the
farmers set up their orchards in different land parcels and each orchard is of different variety.
The objective is to harvest fruits round the year
.
Farmers incur a cost of Rs160,000 in establishment of orchard in a hectare. Besides this,
farmers incur capital cost of Rs 2 million in drip irrigation system, construction of packing
shed etc for an orchard of 7 Ha. As the size of orchard increases, it becomes much more
economically viable to the farmer. The cost of establishment of orchard in a hectare is
represented in table below:
ActivityinaHafor750plants
CostinRs
Pitdigging@Rs10/pit
7500
Fertilisers*
12000
Organicmanure**
22500
* 20 bags of fertilizers per Ha @ Rs 600 per

bag of 50 kg of NPK
Pesticides
12500
**7.5 trolleys of Rs 3000 each
Growthhormonesforrootsetting
3750
Neemcake***
6750
Farmlabour****
Irrigation
Plantingmaterial@Rs15/plant
Total
90000
500
***1 kg per plant @ Rs. 9/kg

****Rs. 100 per day (1 person per acre
throughout the year)
11250
166750
The capital cost incurred for establishment of an orchard in 7 Ha is mentioned below:

Capitalcostincurredinorchardof7Ha
Rsinlakhs
Landleveling
2.5
Waterstoragetank
Dripirrigationsystem
4.5
Borewellwithelectricityconnection
labourquarter
packingshed
2.5
roomfordripirrigationfiltersystems
0.5
Total
20
Besides the initial establishment

cost, farmers incur a cost of Rs
100,000 Rs 200,000 in
maintenance of 1 ha of orchard. It
mainly comprises of costs
incurred
in
application
of
fertilizers, pesticide application,
irrigation, pruning etc.
The operational cost per Ha is shown below:

OperationalcostperHafor750plants
CostinRs
Fertilizer
27000
liquidfertilizer
8000
Pesticides
21000
micronutrients
6250
Irrigation
500
labourforvariousoperations
90000
Staking
3750
Total
156500
Fertilizer-3 kg per
applications @ 1
application)
plant (3
kg per
Pesticides - 14 litres per plant @

Rs. 2 per litre
Staking - 4 bamboo sticks per
plant @ Rs. 5 per bamboo stick
(life of bamboo sticks - 4 years)
The plant starts bearing fruit from

2 year onwards. The average yield per tree is around 40 kg. The contractors start visiting
pomegranate orchards of farmers when the fruits are nearing maturity. The price is negotiated
between the farmer and contractor on the basis of size and quality of the fruit and it is decided
on per kg basis. Most of the farmers prefer to deal for the entire produce of an orchard
nd
14
FINAL REPORT
irrespective of the grades, due to inconvenience in arranging transport to the local APMC and
low price realization for lower grades. The average price realized by a farmer is around Rs
35/kg for Bhagwa variety. However, the price is dependent upon grade and variety and varies
from Rs 25-80. Payment to the farmer is done by the contractor within seven days after
harvest.
Preharvestcontractor:
The pre-harvest contractor is responsible for harvesting of fruits, sorting, grading, packaging
and transportation to destination markets. The time of harvesting depends upon the market
demand, as assessed by the trader. When fruits attain maturity, the trader informs farmer to
start plucking. It is done by the farmer using his own family members. However, some of the
large farms employ labour at the rate of Rs. 120 /day. Plucking usually starts in the morning
with the help of secateurs or manually by retaining 1 cm stalk with the fruit. Harvesting
continues throughout the day. All the fruits are harvested in 2-3 pickings within a span of one
month. Fruits are collected in plastic crates of 20 kg each and it is handed over to the
contractor after weighing by the labourers employed by the contractor.
Sorting, grading and packaging are done manually at farm itself. Every farmer provides a
small space on his farm to the contractor for grading and packaging. In certain farms, it is
done on a concrete platform with tin shade and others use tarpaulin on the ground as well as
for shade. Grading is done manually on the basis of size, colour and health of the fruit and
packed in the corrugated boxes using paper cuttings for cushioning. A team of 6 people,
which comprises of 2 helper, 2 people for sorting/grading and 2 persons for packaging, can
handle 2-3 MT of pomegranates in a day. The prevailing charges for each of them are
mentioned in table below:
ChargesinRsperperson
Size and quality of the box vary depending Activity
Sorting/Grading
120
upon the destination markets. 3 fold CFB
Packaging
150
boxes are used for local market while 5 fold
Otheractivitiesonfarm 80
CFB boxes are used for distant markets.
Generally, 2.5 kg, 5 kg, 8 kg and 10 kg CFB boxes are used. 5 kg boxes are used for Delhi
and Mumbai markets and 8 Kg boxes are used for Delhi, Kolkata and Jaipur markets. The
cost of 5kg and 8kg CFB boxes is around Rs 5.5-6.5/box and Rs 8-9/box respectively.
The contractor arranges for pick up of fruits from farm gate to the point of aggregation in
smaller trucks of 3 MT capacities. The cost of transporting 3 MT produces from farm to the
point of aggregation, which is usually 25-30kms away, is around Rs 1500. Thereafter it is
transported to bigger APMC markets like Mumbai, Delhi etc in trucks of 9 MT capacities.
The cost of loading and transportation from the point of aggregation to Mumbai comes to
around Rs 8000 per truck of 9 MT capacities.
Thus the entire cost of weighing, grading, packing, loading, transportation to destination
markets, unloading and commission is borne by the trader, which comes to around Rs 8.2/kg.
Commissionagent:
They facilitate trade between the contractor and the wholesaler for which they charge a
commission of 8-10% from the contractor. Payment to the contractor is made by the
commission agent on behalf of the buyer/wholesaler.
15
FINAL REPORT
Wholesaler:
They are the bulk breaker and are responsible for distribution of pomegranates to various
locations in the country. The wholesaler pays marketing cess @1.05% and sends the produce
to semi-wholesalers or retailers.
Villagelevelaggregator:
When the farmer sells pomegranates through village level aggregator cum transporter, the
aggregator arranges for transport and brings the produce in crates to APMC markets. The
total expenses borne by the farmer comes to around Rs 10, which includes cost of
transportation, unloading charges as well as margin of the village level aggregator.
As mentioned earlier, only 10-15% of the produce from an orchard is sold through
aggregators in APMC markets. APMC markets of Malegaon and Satana receive only grade C
and D, which are smaller in size and have visible spots on the fruit, whereas Nashik APMC
receives all kind of grades. The produce is sold by open auction through commission agents
and they charge 8% commission from the farmers. The produce is bought by traders and they
pay marketing cess @1.05%. Pomegranates are graded, packed at the space provided by the
commission agent and its cost is borne by the trader.
Pomegranates are loaded in trucks and
sent to many places all over the country
like Kanpur, Bareilly, Jhansi, Patna,
Ludhiana, Amravati, Nagpur etc.
Activity
CostinRs/box
GradingSortingandPackaginglabour
Rs.3
PackagingMaterial(10kgperbox)
Papercuttingforcushioning(250gm
to500gmperbox)
Rs.10
Loadingintotrucks
Rs.0.75
Rs.810
2.1.2 Pricebuildupalongthevaluechainofpomegranate
Value chain of 1 kg of pomegranate indicating the various activities and cost build-up at
every step has been mapped, as shown below.
Co ns u me rp rice
Re tai lers marg in
Rs80
Lo s se s
W h ol es ale rsm arg in
Tran s p ort
Lo s s es
Co m mis si on ch arg es
Tran sp ort atio n ,lo ad in g ,U/L , lo s se s
Grad in g, Pack ing
F arm g ate p rice
Rs8
Rs6
R s0.3
Ma rke ting ce ss
R s3
Co ntra cto rsm arg in
Rs11 .5
R s0.6
R s60(W hole sal ersP rice )
Rs
6
L os se s
R s5
Rs2.3
R s50 (C ontra ctorsP rice )
R s1.5
Rs35
16
FINAL REPORT
Some of the assumptions of the price build up are:
The most commonly observed trade channel has been selected for the price build up of
pomegranate i.e. Farmer- Pre harvest contractor-Commission agent- Wholesaler-Semiwholesaler-Retailer.
The price build up is indicated for medium grade Bhagwa variety of pomegranate.
The transportation cost has been taken from Malegaon to Mumbai
The cost of retailing, which includes the cost of shop, wages, rent etc, has not been
considered.
As evident from above, farmers incur a cost of Rs 5/kg in maintenance of pomegranate

orchard. Around 3-5 % of the produce, which may be cracked, rotten or damaged by the pest
is culled during sorting and grading on the farm. The average price realized by the farmer is
around Rs 35/kg and thus his net margin is Rs 28/kg.
As explained earlier, the cost of grading, packaging, loading, unloading, transportation and
commission at APMC market, which is around Rs 8-9, is borne by the contractor. It has been
observed that after the replacement of wooden boxes and gunny bags by plastic crates and
corrugated boxes as packaging material in recent years, per cent of produce wasted during
handling and transportation from farm to market has considerably reduced. Some contractors
have reported that once the produce is packed at farm in the corrugated boxes, not even 1% of
the total produce is wasted during handling and transportation to the destination markets. The
price realized by the contractor is Rs50/kg at APMC Mumbai and his net margin is Rs 6/kg.
The produce is traded in APMC market and it is bought by the wholesaler and he pays
marketing cess @1.05%. Since commission agent facilitates trade and also pays to contractor
on behalf of the wholesaler, he takes financial risk and thus charges commission at the rate of
8% from the contractor. The net margin realized by the wholesaler and retailer is around Rs 6
and Rs 11/kg respectively. At retail level pomegranates are mostly sold on the basis of count
instead of weight.
The price build up can be summarized as below:
Particulars
Costofmaintenance/Purchaseprice(Rs/Kg)
Costofmarketing,transport,wastage(Rs/Kg)
Sellingprice(Rs/Kg)
Pricespread
Farmer
5
1.7
35
28.3
Contractor
35
8.9
50
6.1
Wholesaler
50
4
60
6
Retailer
60
8.5
80
11.5
Some of the salient features of the price build up are mentioned below:
There are around five intermediaries between the farmer and consumer. The
intermediaries are contractor, commission agent, wholesaler, semi-wholesaler and
retailer.
The price build up from farmer to consumer is around 2.5 times.
The produce is sold on mark up basis and at retail level it is sold on count instead of
weight in Mumbai. However, in the retail markets of Delhi, pomegranates are mostly
sold on weight basis.
Since pomegranate is a hardy fruit, wastages are quite low along the value chain i.e 35% at farm level and 1% during handling and transport. Major losses occur at retailers
17
FINAL REPORT
level (both weight and value) i.e. around 5-10%, if the produce is not sold on the same
day.
The contractor bears the product risk and his price spread is Rs 6/kg and earns 8 paisa of
a consumer rupee.
The commission paid by the

contractor to the commission agent
constitutes 6 paisa of a consumer
rupee.
The wholesalers bears product,

marketing as well as financial risk,
though to a lesser extent, and his
share in a consumer rupee is around
8 paisa. Around 5% of the produce
is also wasted at wholesale level.
The retailer deals in smaller volumes and his share in a consumer rupee is around 14
paisa.
2.2 INFRASTRUCTUREASSESSMENT
2.2.1 PostharvestInfrastructure
Nashik region does not have any pack house for pomegranates. Some of the traders are using
pack houses meant for grapes for washing, sorting, grading, waxing, pre-cooling etc.
There are about 53 3 pomegranate processing units in the region involved in manufacturing of
juice and anardana.
2.2.2 MarketingInfrastructure
Major APMCs in the region, where pomegranate is traded, are Malegaon, Satana and Deola.
None of the APMCs has any cold storage facility or any other facility such as grading
packing line etc. for pomegranate.
2.3 GAPSIDENTIFIEDINTHEVALUECHAIN
An assessment of the range of activities under the value chain was undertaken to understand
the gaps and inefficiencies in the pomegranate value chain. A detailed structured
questionnaire survey was undertaken to map the existing supply chain and identification of
gaps at each stage, with added focus on institutional, infrastructural and logistical barriers.
Based on data from 2006-07
18
FINAL REPORT
After the detailed field survey, the gaps identified were discussed with a range of key
stakeholders to get their feedback on the analysis and understanding of the issues.
Some of the gaps identified in the value chain are:
Farmers have limited knowledge about scientific crop management, which is a

prerequisite for export.
Plucking is mostly done manually. Use of equipments for harvesting is limited to a few
large growers.
Pomegranates are graded and packed manually at farm level. Farm level pre-processing
facilities like pre-cooling, washing, grading, sorting are absent. As already mentioned,
some of the traders use pack houses meant for grapes for pre-cooling and other
operations.
As already mentioned, export has recently started picking up from the region. However,
there is no export oriented pack house in the region. Because of this, exporters have to
either transport their produce to export facility centre at Baramati or Indapur, which are
approximately 250-300 km away. This results in delayed pre-cooling and relatively
short shelf life of the produce and hence less price realization.
2.4 POTENTIALFORINTERVENTION
Based on the need assessment of the pomegranate value chain, action plans were drawn-up and
stakeholder consultations undertaken to identify areas of potential interventions. Some of the
areas identified for intervention are:
It is proposed to set up a pack house for pomegranates at Malegaon in Nashik district.

The pack houses may have facilities for:
Pre-cooling,
Sorting/grading
Packing
Cold storage.
It is estimated that the throughput of pomegranates at Malegaon and Sangamner spoke shall
be 2000 MT. This spoke will also handle other crops such as grapes, onion and maize. The
details of the facilities have been captured in the subsequent chapter.
Pomegranates may be transported in reefer vans to avoid physical and quality loss during
transit
Since export of pomegranate has recently started from the region, farmers may be educated
about Good Agricultural Practices and requirements of international markets.
19
FINAL REPORT
3 FOCUSCROP:GRAPE
Maharashtra is the largest grape producing state of India, contributing to more than 75% of
the total grape production in the country. Within Maharashtra, Nashik, Sangli, Solapur, Pune
are major grape growing districts, of which, more than 60% of the grape is produced in
Nashik alone.
As per the Directorate of Horticulture, Government of Maharashtra, total area under grape
production in Nashik in the year 2007-08 was about 32000 hectares and production was
around 0.6 million MT. Major grape growing talukas in Nashik are Niphad, Dindori, Nashik
and Sinnar.
AreaandproductionofGrapesintheidentifiedregion
Districts
Nashik
Ahmednagar
Jalgaon
AreainHa
32113
1132
18
*Source: Directorate of Horticulture, GoM
ProductioninMT
610147
30553
391
Of the total production of grapes, about 10% goes into wine manufacturing, 2-3% in raisin
making, 5% in exports and rest 82-83% in domestic market for fresh consumption.
Grape is grown on trellises using iron angles, bamboo sticks and wires. Cost of establishment
of an orchard comes to around Rs 0.5 million per Ha. Fruiting starts from 3rd year and
economic yield starts from 5th year onwards. Most of the farmers in Nashik region are using
drip irrigation for grape cultivation.
Thompson Seedless, Black Seedless and Sonaka are popular among table varieties and Shiraj
is grown for processing. Major varieties exported from the region are Thompson Seedless,
Black Seedless, Flame Seedless and Sharad Seedless. Some of the major varieties and their
characteristics are mentioned below:
Thompson Seedless: This variety is seedless and the berries are green in colour. It
accounts for the bulk of export of grapes for table purpose. It is available from mid Jan
to mid April.
Sonaka: This variety is also seedless and has elongated berries. It is available from mid
Jan to mid April.
Black Seedless: This variety is seedless and black in colour. They are good for table
purpose as well as for processing into wine. It is available in January and February.
Grape is harvested from February to May. The fruits are harvested at full maturity when the
colour turns light green or yellowish. For export purposes, fruit is harvested at full maturity
before change of colour. In Nashik district, productivity of grapes is 19MT/Ha. However in
export oriented farms, the productivity of grapes is around 25-30 MT/Ha. Around 90% of the
table varieties produced in the region is sold on farm itself. Of the remaining 10%, about 67% of the produce goes to local APMC.
20
FINAL REPORT
3.1.1 TradechannelofGrapes
The following illustration depicts the various stakeholders of the grapes supply chain:
Various channels of the grape supply chain are
mentioned below:
Around 85-90% of the grapes produced in

the region are sold directly from the farm
and are bought by traders. The trader does
the sorting, grading and packaging at the
farm itself and the packaged grapes are
sent to destination markets. As mentioned
earlier, traders visit orchards when the
fruit is nearing maturity. The price is
decided on per kg basis depending upon
the size and quality of fruit.
Around 10% of the produce goes into

processing/winery industry.
Around 5% of the produce goes for export

purpose.
As shown in the figure above, major players involved in the trade of grapes are farmer, trader,
commission agent, wholesaler, exporter and processor. The role played by major stakeholders
and the value added at each stage is briefly captured below:
Farmer:
Farmers incur a cost of around Rs 0.5 million in establishment of orchard in a Ha. The cost of
establishment of an orchard in a hectare is represented below:
Activity
CostinRsperHa
Landpreparation
25000
Trellisesandsupportsystem*
312500
dripirrigationsystem
62500
greenmanure
30000
organicmanure
37500
fertilisers
20000
pesticides
25000
irrigation
2500
plantingmaterial
3750
Total
518750
*Supportsystem
Rate
Quantity/Ha
Ironangles
Rs.35perkg
500angles@1angleper5plants
Wire
Rs.65perkg
500kg
Bamboo
Rs.10perstick
2500sticks
21
FINAL REPORT
Grape is a labour intensive crop especially during 4 months of the year starting from
flowering till fruit maturity i.e. from Oct to January. Major operations include spray of
chemicals, thinning of bunches, covering of bunches by paper, cleaning of bunches by
removing dead or rotten berries etc. Labour accounts for more than half of the operational
expense incurred during the year for taking one crop. Use of pesticides, growth hormones and
fertilizers is very high in grapes and is second major contributor towards operational cost.
The operational cost incurred by the farmer in a hectare is represented below:
OperationalcostperHainRs
Fertilizer
Export
Domestic
Winery
60000
50000
25000
3750
3750
3750
Growthhormone
17500
8750
8750
Pesticides
25000
25000
20000
Irrigation
5000
5000
5000
Papercoverforbunches
5000
Labourforvariousoperations
132500
87500
47500
TotalCost
248750
180000
110000
Chemicalapplicationafterpruning
The break up of the expenses incurred by the farmer on employing farm labour is mentioned
below:
Activity
Export
Domestic
Winery
Pruningandgrowthregulatorapplication
6250
6250
6250
Failfruitremoval
3750
3750
3750
1stdippingofbunchesinGA
7500
7500
2nddippingofbunchesinGA
7500
7500
3rddippingofbunchesinGA
7500
1stthinningofbunches
25000
25000
25000
2ndthinningofbunches
25000
25000
7500
4thdippingofbunchesforfruitshine
bunchcleaning
20000
bunchcovering
25000
bunch/branchtying
12500
12500
12500
147500
87500
47500
Total
Processing varieties require less labour and an operational cost per Ha comes to around
Rs.0.1 million. Operational cost for table varieties is around Rs 0.18million per Ha, whereas
the operational cost for export quality produce is around Rs 0.25 million. All operations till
and including harvesting are farmers responsibility. The fruits are harvested at full maturity
and when the colour turns light green or yellowish. For export purposes, fruit is harvested at
full maturity before change of colour.
When the fruit is of about 4 months i.e. in January-February, traders visit the farms and a
price is negotiated between the farmer and the trader depending on fruit size and quality.
Payment terms vary from case to case on the basis of relationship between the farmer and the
trader. However, a token amount is paid to the farmer by the trader at the time of price
fixation. Duration of remaining payment vary from immediate to 2 weeks after harvesting.
Price received by the farmer varies from Rs. 15 40 per kg depending on the size and quality
of berries. Around 5% of the produce from an orchard are loose berries and they are not
bought by the traders. The farmer brings these berries to local APMC market, where it is
22
FINAL REPORT
traded through a commission agent. These berries are mainly used for consumption in local
market as well as for making raisin.
Grape grown for export purpose by the farmers i.e. berry diameters of more than 16 mm, tests
are conducted for residue levels. Farmers need to get 3-4 samples tested and each test costs
around Rs. 5000-7000 to the farmer. Destination of the produce is decided on the basis of
residue level and the price offered is determined on the basis of destination market. Europe
has the most stringent residue norms in comparison to Middle-Eastern countries and then
comes Bangladesh.
PreharvestContractor(Trader):
Trader picks up the produce from farm itself after sorting, grading and packaging. These
activities are done by his work-force hired for the entire grape season of 3-4 months. The
entire operation is done manually at the orchard. Mostly labourers migrated from northern
states are involved by the traders for carrying out the above operations. They are relatively
available at cheaper rates than the local labour. Wages of farm labourers vary from Rs. 80150 per day. A team of 3-4 people can grade and pack about 1.5-2.0 MT of grape in a day and
load it in the truck. Grading is done on farm manually on the basis of colour and size.
Characteristics of different grades are as follows;
Grade A: Berries are > 16 mm diameter
Grade B: Berries between 16 14 mm diameter
Grade C: Berries less than 14 mm diameter
Grape is packed in corrugated fibreboard boxes. Boxes come in various sizes of 2 kg, 4 kg. A
box of 4 kgs costs about Rs. 8-10.
Since grape is sold before harvesting, risk of price fluctuation in the market shifts from
farmer to the trader. Traders are resourceful and are more capable to bear this risk by storing
the produce during peak season.
Pre-harvest Contractor The Driver of the Value Chain
Pre-harvest Contractors, popularly known as Vyapari or Trader, play an important role in the value
chain of grape. They maintain a network with other traders operating in major markets across the
country. Orders are taken over the phone and supply is done as per market demand. Hence, the traders
are able to control the price fluctuation to some extent. Moreover, many traders own cold stores in
Nashik and provide further buffer against glut by storing the grape for 2-3 months during peak
harvest season. This also enables them to fetch a better price during lean season.
CommissionAgent:
They facilitate auction of the produce brought to the APMC. Major markets of grape in
Nashik are Pimpalgaon and Nashik APMCs. Open auction system prevails in these markets.
CA is authorised by the APMC to charge the commission @ 8% of selling price from the
seller in Nashik and Pimpalgaon, whereas 10% in case of Mumbai APMC. CA also provides
credit facility to the buyer of the produce by making immediate payment to the seller on
behalf of the buyer. Payment to the CA by the buyer is done after 1-2 weeks depending on
their relationship. Market fee and cess @ 1.05% is being paid by the buyer to the APMC,
which is also routed through the CA.
23
FINAL REPORT
3.1.2 PricebuildupalongthevaluechainofGrapes
Value chain of 1 kg of fresh grapes indicating the various activities and cost build-up at every
step has been mapped, as shown below.
ConsumersPrice
LossesatRetailLevel
RetailersMargin
Rs50.00
Rs2.00
WholesalersMargin
Rs8.00
MarketFee@1.05%
Rs4.63
TradersMargin
Rs0.36
Commission@10%
Rs2.94
Transportation,UnloadingatAPMC
Rs40(WholesalersPrice)
Rs3.50
Grading,Packing,Loading
Rs1.25
Farmgateprice
Rs2.30
Rs35(TradersPrice
Rs25
grape i.e. Farmer- Trader - Commission agent- Wholesaler -Retailer.
The values have been assumed for the Grade B grape i.e. berry diameter of 14-16 mm,
which are the best quality available for the domestic market.
The transportation cost has been taken from Niphad to Mumbai
considered.
The grape farmers incur a cost of Rs 12.5/kg in cultivation of grapes. The price offered by the
trader to the farmer is Rs 25 and the net margin realized by the farmer is Rs 7.5/kg.
Reduction in Wastage by Use of CFB Boxes
Earlier grape was packed in wooden boxes using dry leaves of sugarcane or using some other grass as
cushioning material. Ventilation was limited in the wooden boxes due to which temperature and
ethylene levels were high inside the box. This resulted in low shelf-life of the fruit inside causing
higher level of wastage while transporting to distant markets. Grass used for cushioning also caused
damage to the berries.
Wooden boxes have been replaced by cardboard boxes during the last 5-8 years. Now, corrugated
fibre board boxes of 3 ply and 5 ply are being used for packaging of grape. These boxes have
provision for ventilation and wastages have been reduced considerably.
The trader is responsible for grading, packaging, loading in trucks and transportation to
destination markets and unloading at the APMC market. He incurs an expense of Rs 3.5/kg in
bringing the produce from farm to market. The trader also pays commission to the
commission agent, which is charged to him at the rate of 10%, which comes to around Rs
3.5/kg. The price realized at the APMC market is Rs 35/kg and the traders margin is Rs 3/kg.
The produce is bought by the wholesaler at APMC market and he pays marketing cess
24
FINAL REPORT
@1.05%. The wholesaler earns a margin of Rs 4.6/kg and does distribution of grapes to
various retailers. The retailers margin is Rs 8/kg and thus the consumer price reaches to Rs
50/kg.
The price build up can be summarized as below:
Particulars
Sellingprice(Rs/Kg)
Pricespread
Farmer
12.5
5.0
25
7.5
Trader
25
7
35
3
Wholesaler
35
0.5
40
4.5
Retailer
40
2
50
8
Some salient features of the price build up are mentioned below:
The price paid by the consumer is almost two times of the price realized by the farmer.
There
are
around
4
intermediaries in the supply
chain of grapes i.e. trader,
commission agent, wholesaler
and retailer.
Grape farmers receive 15 paisa

of a consumer rupee. Around 45% of the berries come out of
bunches
during
harvesting,
sorting, grading and packaging,
which are discarded by the
trader. These berries are sold by the farmers to local women at very low prices i.e. Rs.
5-8 per kg and are used for raisin making.
Total wastage of about 8-10% has been reported by various actors of the value chain.
Once grape is packed by the trader, no losses are observed till the produce is sold in the
APMC to the wholesaler. Further 4-5% berries loosen out of the bunch at retailers level
and are either thrown away or sold at a very low price.
Trader plays an important role in the value chain of grapes. They bear product as well as
price risk, for which they earn a margin of Rs 3/kg i.e. around 6 paisa of a consumer
rupee. As grapes are sold before harvesting, risk of price fluctuation in the market shifts
from farmer to the trader. Traders are resourceful and are capable to bear price risk by
storing the produce during peak season.
3.2 WINERIES
There are about 32 wineries in Nashik manufacturing more than 75 lakh litres of wine every
year. Most of these wineries are located in Niphad and Dindori Talukas. A wine park has also
been set up by Maharashtra Industrial Development Corporation (MIDC) in Vinchur, Taluka
Niphad. Wine varieties cover about 10% of the area under grape.
Wineries require a different variety for manufacturing desired quality and taste of wine. Since
these varieties are not consumed as table grapes, wineries enter into contract with the growers
for assured buy-back of the produce at a pre-determined price.
In case of processing varieties, it is the farmers responsibility to deliver the produce at the
winery. Grading and packing is not done in case of processing varieties. Plastic crates are
25
FINAL REPORT
used to carry the produce. A tempo carrying 200 crates of 20 kg each, charges Rs. 500 for
transportation of produce to the winery located about 15-20 kms away. Payment to the
grower is done immediately upon delivery of the produce at the winery. Payment is done
FarmersMargin
generally by cheque instead
of cash.
ContractPrice
Value chain of grapes used
Transportation
for processing is much short
HarvestingLosses
and simple. Values build up
Rs0.13
at each stage and activity of CostofProduction
Rs1.00
the value chain for wine
Rs8.33
grape (per kg) is as shown.
Rs15.54
Rs25.00
3.3 EXPORTOFGRAPES
Dependence of Growers of Processing Varieties on Wineries
Many farmers preferred to grow processing variety of grape as it is less labour intensive and pay more for fewer
efforts. Due to slow down in wine industry, wineries are left with huge stocks of unsold wine. Hence, in the year
2007-08 and 2008-09, procurement of raw material was relatively low and many wineries did not buy the
produce at the contract price.
It was informed during the field survey that some farmers got only Rs. 15 per Kg as against the contract price of
Rs. 25 per Kg. Moreover, it could not be sold in the market for fresh consumption as the taste of processing
varieties is not accepted by the consumer in the fresh market segment.
Farmers incur a cost of around Rs 0.25 million in cultivating export quality grapes in a
hectare. The productivity of export oriented farms is around 25-30MT/Ha, of which, about
15-17 MT produce is of export quality and the remaining produce is sold in domestic market.
Farmers are paid Rs. 35-60 per kg of grape for export quality produce depending on the
market. Average price for different grades and approximate quantity of each grade harvested
from one Ha of vineyard is as given below;
Quality
ExportQuality
DomesticQuality
LooseBerries
QuantityproducedperHa
1517MT
7.510MT
2MT
PriceinRs.perkg.
3560
2030
56
Farmers producing export quality grape have to obtain EurepGAP or Global GAP
certification for their farms. The certificate is valid only for one year. For Global GAP,
certification charges vary between Rs. 20000-25000 per farm, if taken individually, whereas,
if certification is taken as a group of farmers together, charges of Rs. 5000-7000 per farm are
levied.
Major varieties exported from the region are Thompson Seedless, Black Seedless, Flame
Seedless and Sharad Seedless. Residue testing of random samples is being done to check if
the pesticide residue is within the permissible limits. Samples are tested at Pesticide Residue
Analysis Laboratory, which has been recently set up in Nashik by National Horticulture
Research & Development Foundation (NHRDF). The laboratory has also been recognized by
APEDA and accredited by NABL for residue analysis of all export oriented agricultural
produce especially grapes, pomegranate, mango, onion and other such products. Till last year,
samples were sent to Pune for residue testing. Charges of residue test are Rs. 5000-7000 per
sample.
26
FINAL REPORT
For export purpose, grape is harvested by the trader early in the morning, generally between
6:00 to 8:00 a.m. and the harvested produce is brought to the pack house by 10:00 to 11:00
a.m. Sorting, grading, packing and pre-cooling operations take about 10-12 hours and it is
then stored in cold rooms, until full container load is processed. Temperature maintained
during various operations of grapes is as follows:
Operation
Precooling
Storage
Temperature(degreeC)
0
01.5
Grape is exported to European countries in 4.5, 5 and 9 Kg boxes. Plastic punnets or pouches
are used as separators in the boxes. Each punnet or pouch contains 500 gram grapes each. As
a standard practice, about 250 grams grape is packed extra per 5 kg so as to compensate for
moisture loss during transit.
Grape is exported in refer containers by sea. The container takes 17-20 days to reach UK
from Mumbai. Shelf life of grape is about 3 months, if processed properly. Sulphur pads are
used between grape boxes to increase its shelf life. Boxes are palletized and loaded into the
container at pack house. Each pallet contains 120 boxes of 5 kgs each and 20 such pallets are
loaded in one container of 12 MT.
The containers are checked and sealed at the pack house and sent from Mumbai to JNPT
Mumbai for export. Clearing & Forwarding Agents charge about Rs. 7000-8000 per container
for paper work for excise and custom clearance. Freight from Nashik to JNPT Mumbai is
between Rs. 18000-20000 per reefer container. Freight from JNPT, Mumbai to UK in 2009
was USD 2500. The cost break-up for exporting 1 kg of grape is
Item
Cost
Costofprocurement
Rs.40perkg
Packagingmaterial*
Rs.3540per5kgbox
Operationalcostofpackhouse
Rs.33.5perkg
Clearing&Forwarding
Rs.70008000percontainerof12MT
Excise&Customs
Rs.2000percontainer
PhytoSanitaryCertification
Rs.1000percontainer
TerminalhandlingchargesatJNPT
Rs.1600017000percontainer
Freight:NashikMumbai
Rs.1800020000percontainer
Freight:MumbaiUK
2500USDpercontainer
*packagingmaterialinclude3plyCFBbox@Rs.2528perboxandpunnetsorpouch,grapeguardetc.Many
exportersareusingimportedboxesof3plyforexportpurpose,whichcostRs.30perboxof5kgeach,imported
fromItalyorSouthAfrica.QualityofimportedboxesisreportedtobebetterthanIndianboxes.
Average selling price of grapes in Europe is about GBP 7.5-10 per box of 5 kg. During
Christmas season, grape prices are as high as GBP 14-20 per box of 5 kg in Europe and early
varieties of grapes exported from India can fetch such returns.
Most of the corporate such as ITC, Mahindra and Deepak Fertilizers etc. are operating on
margin basis. They charge 14-15% of the sale price as their margin and pay rest of the
amount to the growers after deducting their all expenses. 25% of the expected sale price of
produce is paid to the farmer in advance and rest is paid after sale proceed is realized. None
of these companies have invested in infrastructure in the area. Existing pack houses are being
taken on rent on per kg basis and used for processing of fresh grape.
There are about 138 grape exporters in Nashik area. Bhandari, N.D. Grapes, FreshTrop Fruits
etc. are some of the big grape exporters from the region.
27
FINAL REPORT
3.4.1 PostHarvest/MarketingInfrastructure
Nashik is the leading grape exporting region in the country and exported about 1400
containers to Europe and Middle-East in 2007-08. About 150 exporters are operating in
Nashik district most of them are into grape, onion and vegetables export and few of them
export pomegranate as well.
Nashik has about 84 APEDA recognized pack houses, used mainly for export of grapes. Few
of them are not in functional stage, particularly 2-3 pack houses that were established by
cooperative societies. About 6-7 of these pack houses are owned by co-operatives and rest all
are privately owned by the exporters. The pack houses are operational during grape season
and remain idle during 6-8 months during the year. Some of these pack houses have their
gensets for power back-up and many of them have taken connections on Express Feeder of
Hindustan Aeronautics Limited (HAL) for assured power supply.
About 7-8 pack houses in Nashik area have big cold storage facilities i.e. 2000 MT or above,
while others have only about 50-150 MT cold storage capacity. As per an estimate, pack
houses in Nashik have a cumulative capacity to process 1000-1200 MT of grape per day
(processing includes grading, packing, pre-cooling and storage).
Some cold stores are used for pomegranate, vegetables and raisins during off-season. Export
of grape is a remunerative business and most of the pack house owners do not realize the
need to utilize the facility for any other purpose to increase its viability. Some cold stores also
stock the grape during peak supply and sell them into domestic market for about 2 months
after the grape season is over.
About 16 new proposals for setting up of grape pack houses have been submitted to APEDA
this year.
3.4.2 InstitutionalInfrastructure
Maharashtra State Grape Growers Association, Grape exporters association and MahaGrapes
are the three major institutions operating in the region.
MaharashtraStateGrapeGrowersAssociation:
The association was registered in 1960 and since then it is working to provide technical support to growers
through extension services, arranging of seminars and group discussions, importing and distributing some
importantinputslikeGibberellinetc.TheassociationisheadquarteredinPuneandithasfourdivisionaloffices
ingrapegrowingareas.OneofitsdivisionalofficesislocatedinNashik.
The association has 25000 members cultivating grape on more than 40000 hectare of land. Of these, 7500
farmers are from Nashik area. The association has a nursery for quality planting material and testing
laboratorieswithfacilitiesfortestingofsoil,water,petioleforbetterqualityproduction.Onesuchtestinglab
has recently been started in Nashik. These facilities are available for members and nonmembers. It has a
monthly technical magazine Draksha Vrutta to guide the farmers and keep them updated with the latest
informationinviticulture.
Life membership fee for becoming member of the association is Rs. 665. Differential charges are levied for
testingfacilitiesfrommembersandnonmembers.Forexample;
Soiltestpersample:Rs.276formembersandRs.436fornonmembers
Watertestpersample:Rs.168formembersandRs.226fornonmembers
28
FINAL REPORT
The association played an important role in formation of grower cooperative societies for
marketing and exports of grape. These cooperative societies later formed MahaGrapes. The
association has also taken lead in formation of Grape Growers Federation of India.
MahaGrapes:
Mahagrapes is a partnership firm of 16 farmers cooperative societies. It was established in January 1991.
Mahagrapes assists its member societies in marketing of produce especially in international markets and
provide market information. The 16 member cooperative societies have almost 2500 farmers as their
members.Eachmembercooperativesocietyhasapackhousewithaprecoolingof5MT&3coldstoresof30
MTcapacitieseach.TechnologyofthesefacilitieswasimportedfromCalifornia.Ofthe16membersocieties,4
societiesarefromNashikdistrict,asmentionedbelow;
Baglantalukagrapegrowerscoop.societyltd.,Nashik
Mogigrapegrowerscoop,societyltd.,Nashik
Maltagrapegrowerscoopsociety,Nashik
Shriramgrapegrowerscoopsociety,Nashik
Two of the above cooperative societies i.e. Mogi and Malta are almost non-functional now
and the facilities are closed. Both the societies have a debt of about Rs. 35-40 lakhs. The
main reason behind the failure of these societies is crop shift. Both the societies are located in
Malegaon area of Nashik district, where grape has been replaced by pomegranate due to
decreasing water resources and high operational cost and labour requirement of grape.
GrapeExportersAssociation:
This is an association of grape exporters. Major activities are to represent exporters interest at APEDA,
importingcountriesetc.
Primaryagriculturalcooperativesocietiesarethemainsourceofcreditformostofthegrapefarmers.Amount
ofcreditvariesfromcroptocropandlandholdingofthefarmer.Forgrapes,theamountisasfollows:
Grape(export):Rs.90,000peracre
Grape(domestic):Rs.70,000peracre
Thesecroploansareprovidedforamaximumperiodofoneyear.Rateofinterestchargedontheseloansis6%
per annum. Term loans are also provided by the PACS and rate of interest differs in that case. Term loan is
generallygivenforirrigationsystems,tools,farmimplementsetc.LoansuptoRs300,000attractaninterestof
12.5%.IftheamountexceedsRs300,000,therateofinterestincreasesto14.5%
3.5 GAPSINTHEVALUECHAIN
An assessment of the range of activities under the value chain was undertaken to understand the gaps
and inefficiencies in the grape value chain. A detailed structured survey was undertaken to map the
existing supply chain and identification of gaps at each stage, with added focus on institutional,
infrastructural and logistical barriers. After the detailed field survey, the gaps identified were
discussed with a range of key stakeholders to get their feedback on the analysis and understanding of
the issues. Gaps in the value chain identified during the field surveys are as mentioned below:
Use of agro chemicals including pesticides and growth hormones is very high in grape.
Residue is checked only for the produce meant to be exported, whereas it is equally
important to provide residue free fruit to the domestic market also. Also, chemicals used
for grape for export purpose are different than those used for domestic purpose. The
chemicals used in case of export purpose grapes leaves less residue and are more
expensive.
Grape is a labour intensive crop. Decreasing availability of labour and increasing labour
cost calls for farm mechanization.
29
FINAL REPORT
Post harvest infrastructure for grape in Nashik region is quite good. Lot of investment
has already been done by traders, exporters and growers cooperatives with assistance
from Government of India. However, the infrastructure is utilized only for 4-5 months
in a year and remains idle for rest of the year.
Approximately 4-5 % of the berries that loosen during harvesting are used for making
raisin at household level. Sulphur solution is used in making raisins from loose berries,
which is not good for health and causes thyroid problems.
For the domestic market, most of time grapes are directly kept into cold storage without
pre-cooling the produce.
Refrigerated transport is required to maintain the fruit quality after the produce is taken
out from cold stores during off season, which is almost absent. At present, stored fruit is
also transported through normal trucks.
3.6
PROPOSEDINTERVENTIONS
Based on the need assessment of the grape value chain, action plan were drawn-up and
stakeholder consultations undertaken to identify areas of potential interventions. It is proposed to
set up 3 pack houses for grapes in the region. The proposed locations for spokes are
Malegaon, Pimpalgaon and Nashik Road (Sinnar). The estimated throughput at Malegaon
shall be 2000 MT per annum. Pimpalgaon and Nashik Road shall handle 10000 MT and 5000
MT/annum respectively. The pack houses shall have following facilities for grapes:
Washing
Sorting/Grading
Pre-cooling
Packaging
Cold Storage
Container stuffing: This facility is proposed to be set up at Pimpalgaon, which is also a

proposed location for hub.
Besides grapes, Malegaon spoke would also handle pomegranates, onion and maize. The
other two spokes would also handle other crops such tomato, vegetables etc.
30
FINAL REPORT
4 FOCUSCROP:BANANA
Maharashtra is the leading producer of banana in the country with about 25% share in
countrys total production. Average productivity of Banana in Maharashtra (63 MT/Ha)
stands highest among major producing States. Total area under Banana cultivation in
Maharashtra is estimated at 80000 Ha with a yearly production of about 4.96 Mn MT.
Important districts of the state under banana cultivation are Jalgaon, Hingoli, Nandurbar,
Beed, Parbhani and Pune. Jalgaon district is popularly known as Banana bowl of the State
with about 39264 Ha area under banana crop. It alone accounts for 65% of the total area
under banana cultivation in the state and it holds approximately 18-20% share in national
production. In Jalgaon district, Raver taluka alone accounts for about 29000 Ha of banana
cultivation. Besides Raver, other important talukas are Yawal, Chopda and Jalgaon.
The production snapshot of Jalgaon, share of respective production clusters and their
contribution to States total output of Banana are provided in the table below:
Jalgaon
Maharashtra
Area(Ha.)
39264
75000
Avg.
(MT/Ha)
65
65
Productivity Production
(MT)
2556287
4962900
%age of
Production
51.5
States
Source: Directorate of Horticulture, Government of Maharashtra (FY 2007-08)
ClusterI
The cluster comprises of Raver taluka and accounts for about 52 percent of districts total
production. This production statistics alone make it an ideal cluster for interventions in post
harvest infrastructure for Banana crop. Major Banana growing villages in the cluster have
established forward linkages with key consumption markets like Delhi, Amritsar, Srinagar,
Jammu, Chandigarh, Jalandhar, Indore, Bhopal and Lucknow. The cluster has exclusive rake
siding facility for rake loading at Raver, Savda and Nimbora railway stations in Raver taluka.
This facility provides excellent transport facility for bulk transport of Banana during the peak
season.
ClusterII
The cluster comprises of Chopda and Yawal taluka and accounts for about 23 percent of
districts total production of Banana. This is the second largest cluster followed by Raver in
terms of production. Major Banana growing villages in the cluster have established forward
linkages with key consumption markets like Delhi, Amritsar, Srinagar, Jammu, Chandigarh,
Jalandhar and Lucknow. This cluster has no rail connectivity and almost entire transport of
raw material happens through road transport. The cluster is located along BurhanpurAnkleshwar highway and provides connectivity to markets in M.P & Gujarat. This highway
also connects to National Highway-3 at Shirpur which is about 50 km from Chopda.
Transportation hub at Savda is the key source for supply of trucks in season.
ClusterIII
The cluster comprises of Pachora and Bhadgaon taluka and accounts for about 7 percent of
districts total production and about 5 percent of States total production of Banana. Area
31
FINAL REPORT
under Banana in this cluster has drastically gone down between 1996-2004 due to the
decrease in precipitation levels. However, with improved rainfall conditions, area under
banana cultivation is again on an increasing trend since 2007. Major Banana growing villages
in the cluster have established forward linkages with key consumption markets like Delhi,
Chandigarh, Jalandhar, Indore, Bhopal and Lucknow. This cluster has good connectivity both
via road as well as rail transport. The cluster falls on the route of central railway. However,
transport of raw material mainly happens through road transport. The cluster is located at
about 30 km from national highway-6 (Mumbai-Nagpur) and 75 km from national highway-3
(Mumbai-Agra) which provides connectivity to potential consumption markets.
The major varieties cultivated in the state are Grandnene and Shreemanti, followed by
Mahalakshmi and Robusta.
a. Sreemanthi: It is a popular commercial variety grown extensively for table purpose
in the cluster. The plant is of dwarf variety, making it less prone to wind damage. The
bunch size and the fruit length are quite good and the latter ranges from 6 to 8 inches.
The average bunch weight, with 6-7 hands and with about 13-15 fruits per hand, is
about 15-25 Kg and in some cases as high as 30 Kg. The thick rind of the fruit retains
the greenish colour even when the fruit is ripe.
b. Grand Nene: It is a semi-tall variety grown significantly in the cluster. It is a high
yielding variety and produces bunch of large size with well developed fruits. A
Bunch weighs about 25-30 kg. Dark green fruits turn bright yellow upon ripening
depending on ripening conditions. The fruit is very sweet with a good aroma. It also
has a better shelf life in comparison to Sreemanthi which makes it suitable for export
purpose.
Banana in the district is grown mainly in two seasons as described below:
a. Season 1: This season is known as Mrig Bag. The planting time for suckers is
between May and June and it takes about a years time for the complete flowering
though onset of flowering can be seen from eighth month itself. The harvesting
period ranges from July to September. Banana cultivated in Mrig Bag season
consumes more water and is mainly rainfed as this crop witnesses two summer and
rainy season. Also, abundant sunshine, supported by assured irrigation provides for
robust growth of crop. The banana plant of this season is comparatively taller than
the banana plant of Kand bahar. Most of the banana plantation in all the clusters are
sown in this season and it accounts for 75-80 percent of sowing.
b. Season 2: It is also known as Kanda Bag as the suckers planting time coincides
with the planting of Kanda (local dialect name of Onion in Maharashtra). The
planting time for suckers is between October and November and takes about ten
months to a years time for onset of flowering. Crop under Kanda Bag season
encounters two winter seasons which hinders the vegetative growth and also affects
the yield. The critical growth window for the crop is the period of May-June which is
about 6 months after the plantation. Kanda bag is mostly planted in Chopda taluka
in cluster II and accounts for 60-70 percent of total sowing.
However, recent trend since last four years indicates that banana is generally grown
throughout the year in cluster I & II which leads to an availability of banana fruits for almost
9 months in a year except November, December and January.
32
FINAL REPORT
Around 80-85% banana produced in Maharashtra is marketed out of the state to New Delhi,
Lucknow, Kanpur, Amritsar, Jaipur etc. New Delhi is the most important market for banana
of Maharashtra and it acts as a major consumption as well as distribution centre for markets
in national capital region.
Banana in the region is marketed in the following ways:
A. Marketing through cooperative societies: Around 70% of the banana in the region
is traded through cooperative societies. The Society works on a membership basis
and each farmer has to pay a nominal fee to become a member of the society. The
principal function of the society is to market the produce. The societies negotiate
with the commission agents in destination markets about the price and thus provide
marketing linkage to its members. The societies charge a fee of 2-3% to the farmers
on the selling price of the produce.
B. Marketing through fruit merchants: When banana bunches are mature, local fruit
merchants negotiate the price and give advance payment to the farmers. Bunches are
procured at farm itself and then dispatched to destination markets. Fruit merchants
bear cost of transportation as well as the risk associated with it. Post Harvest
Contractors facilities aggregation, transportation to the destination market and
payments to the farmers from the traders/commission agents. For his services, the
PHC generally charges a commission of 2-3% of the value of the crop to the farmers.
C. Direct Marketing: Some of the progressive farmers in the region having big
landholding directly liaison with traders/commission agents of wholesale markets and
send the produce to destination markets after fixing up the rate and quantity over
phone. The cost of harvesting is borne by the farmer. The farmer facilitates
aggregation and the transportation but the transportation cost is borne by the buyers.
D. Procurement by companies: Some of the companies such as Jain Irrigation System
procure banana from identified progressive farmers. They give farm extension
support to growers as well as provide cellophane for covering banana bunches on
plants. The transportation cost is borne by the buyer companies.
The supply chain mechanism for Banana in the region is depicted below:
Moreprevalent
PostHarvest
Contractor
Commission
Agent
Trader/
Wholesaler
Retailer
Cooperative
Society
Commission
Agent
Trader/
Wholesaler
Retailers
Consumers
Farmers
Lessprevalent
Consumers
33
FINAL REPORT
The major activities along the supply chain are as follows:
Harvestingiscarriedoutmanually.
Harvest
Produce aggregated on roadside at various pick up

points; then loaded on trucks for transportation to
nearestrakepointordirectlytodestinationmarket
Aggregation
Primary
Transport
Produce is transported via. railway wagon/surface

transportby10MTtruckstodestinationmarkets
Sorting&Grading
(Packing is also done as
perrequirement)
Sorting/grading and packaging (when required) is

mostly carried out at destination market where the
bulkbrakingtakesplace
Ripeningofproducetakesplaceatdestinationmarket
a good practice, as it minimizes post harvest losses
transportingraw,hardbananatolongdistances
Ripening
Post ripening & sorting/grading, produce is

transported under a noncold chain environment to
retail markets in the catchment area of destination
markets
SecondaryTransport
Commonly used post harvest activities
Banana is mostly propagated by suckers followed by tissue cultured plantlets. Planting is

done in the months of June-July as well as during October-November. Around 80% farmers
use suckers as planting material and the rest use tissue cultured plantlets as well as suckers of
tissue cultured plants. Around 1600-2000 plants are sown in an acre. About 90% of the
farmers use drip irrigation for irrigating their fields which saves about 45-50% of the water
consumption. Average yield of banana is approximately 60-65 MT per hectare.
Banana orchard has an eighteen month cycle and total cost of cultivation of 1 Ha of orchard is
about Rs. 200,000. The breakup of the cost of cultivation of banana per Ha is given below:
Components
Costoflease@Rs.20000/acre
Interestonborrowedcapital@10%
Dripirrigation
Fertilizers&Manures
Electricity
Labour@Re.1perplant/acre
Harvesting
Totalcost
CostinRs
50000
15000
12500
52000
12000
4250
13500
159250
34
FINAL REPORT
*Planting materials are obtained from the existing orchards free of cost. The cost of new
suckers, if a farmer wants to buy from the market, is Rs. 1-2/sucker.
The economics of banana cultivation in the study region is given below:
CostofcultivationperHa(Rs.)
AverageyieldperHa(inMT)
AveragepriceperMT(Rs.)
Farmersincomefromsaleofbanana(Rs.)perHa
Farmersnetrealization(Rs./Ha)
159250
65MT
6250
406250
247000
The planted crop gets ready for harvest within 12-15 months of planting. Harvesting is done
manually and banana bunches are generally cut at 75 -85% maturity level. The time of
harvesting depends upon:
Distance of destination markets: For distant markets like Delhi, fruits are harvested at
early maturity levels than nearer markets of Mumbai and Pune.
Prevailing market price: If the price prevailing in wholesale markets witnesses

increasing trend, farmers prefer to harvest the crop and vice versa.
Demand from wholesale markets: Pre harvest contractors prefer to lift banana bunches
from the field when the demand from buyers increases.
Sorting and Grading is very minimal at field level. In case of banana transported through
railway wagons, some amount of sorting is seen at railway station. Banana hands with
scattered, thin and short fingers are removed from the bunch with the help of sickle. There is
negligible storing of banana at the farm level. Most of the storing is done near the
consumption market.
After harvesting, bunches are carried on shoulders by the labourers and brought to the
aggregation point wherein produce is loaded on normal trucks and it is sent to the destination
markets. For rake loading, produce is transported in normal trucks from field to railway
stations and further loaded on railway wagons.
Key Observations: Rake Loading
Around 75-80% of the banana is transported through trucks while balance 20-25% is routed
through railways.
Around 80% of the produce transported through railways is sent to Azadpur mandi, Delhi. Other
places where banana goes include Lucknow, Kanpur, Jaipur, Amritsar etc.
Annually 140-160 rakes amounting to 300000 MT of Banana is sent out from major rake points
at Raver, Sauda and Nimbura railheads of Jalgaon district.
There are 3 banana growers union at Nimbuara, Sauda and Raver. Banana growers union, Sauda
has approximately 125 members. For booking of wagons, unions place their demand one day in
advance to the railways and the unions are given priority over others.
Rake loading happens for 5-7 hours twice or thrice a week at three stations in Jalgaon districts
viz Raver, Sauda and Nimbura.
35
FINAL REPORT
Rake Loading at Savda Station in Raver Taluka
Rake Siding
Loading Operation
Wagon Filling
Rejected bananas
Typical Value chain of banana (per Kg) (from Jalgaon to New Delhi) is represented in the
diagram below:
Retailersmargin
Secondary
transportationand
ripeningcost
Rs.2.50
WholesaleMarginat
AzadpurMandi
Rs.1.00
Commission@46%at
AzadpurMandi
Rs.1.50
Wastages
*
Rs.18.00
(RetailersPrice)
Rs.0.30
Labourandtransportation
Rs2.50
CommissionofPHC@2%
Rs.14.00
(WholesalersPrice)
Rs2.50
FarmersPrice
Rs0.20
Rs6.45
* This is the cumulative wastage along the chain (details given below) (Amounts are per Kg)
In the value chain, the farmer pays 2% commission to Post Harvest Contractor. The loading
and unloading labour cost and transportation cost to distant markets are paid by the
wholesaler. Further transport, labour and ripening costs are borne by the retailer.
36
Wastage happens at different levels in the value chain. It is lowest at

contractor level as
Wastage
the produce is in
the hard and raw
stage while it is
maximum at the
Atthewholesalerlevel
Farmer/PHClevel
810%
5%
retail level where
the produce is at
Cropdamage
Moisture/weightloss
Improperharvesting
Physicaldamagedueto
the ripened stage.
techniques,improper
poorhandling,storage
The
factors
transportationand
ortransportGrading/
responsible
for
handling
sortingbyretailers
wastage vary at
different levels and are shown in the diagram:
FINAL REPORT
the farmer/pre harvest
Attheretailerlevel10
12%
Physicaldamagedueto
poorhandling,storage
andtransport,
Grading/sortingby
customers
In case of transportation from Maharashtra (Jalgaon) to New Delhi through trucks, expenses
vary from Rs 2-2.5 per kg. Commission charges at Delhi are 8 %.
TransportationCosts(InRs.)
Delhi
RakeTransport
RoadTransport
38000
Lucknow
Delhi
Chandigarh
Jammu
Jaipur
28000
22000
30000
32000
20000
OneRakeloadof38MT
OneTruckLoadof10MT
Despite of immense potential for export of banana from the cluster to gulf countries and
European markets, volume of exports has not been picking up. MAHABANANA, (A
federation promoted by MSAMB with an objective to strengthen market support to the
growers) has initiated the export from the cluster and sent a few consignments to gulf
markets. However due to lack of appropriate farm gate infrastructure including cold chain
and manual operations leading to a higher cost and wastage, the profit from exports remains a
concern. A typical export value chain of banana is depicted below:
Value Chain- Export (Raver to JNPT, Mumbai) (Per Kg)
Landed
@JNPT
TransporttoJNPT
Mumbai
PrimaryTpt,Processing&
Packaging
Rs12.5
Rs1.5
FarmgatePrice
Rs2.5
Rs8.5
(Amounts are per Kg)
Growers in the area mention that maintaining the quality of export banana all along the
supply chain till it reaches the destination markets, remains a challenge for them while such
concerns are not critical when catering to domestic markets where produce is transported
mostly under a non -cold chain environment. The wastages in the above chain are minimal
and are limited only from harvesting to the pack house and are around 5%.
37
FINAL REPORT
Price Dynamics
Monthly average wholesale price of banana in Jalgaon varies from Rs 600-800/Quintal.

Banana is graded primarily into three grades based on the following:
Grade
A
B
C
Lengthoffinger
7.58inches
7to7.5inches
Lessthan7inches
NooffingersinoneKg
56
78
9andabove
Grade A banana is firm, have straight fingers with

no mark of damage and bruises.
Grade B bananas are slightly shorter in length. Most
of the upper grade banana goes out of the state. And,
rejected and damaged banana is consumed locally.
Grade A banana
While the good quality grade-B banana is sold at Rs 700-800/quintal in wholesale markets of
Maharashtra, rejected bunches are sold at Rs. 600700/quintal. In case of Delhi, biggest
market for banana from Jalgaon, wholesale prices vary from Rs. 900-1100 per quintal with
Grade-A fetching highest prices. Retail prices of ripened bananas in Delhi varies from Rs 3040 per dozen.
4.1.1 ExistingPostHarvestInfrastructureandInstitutionalMechanism
Presently, there is little post harvest infrastructure for banana in the region. There is no
storing facilities and almost negligible cold chain infrastructure. Limited use of cold storage
has been observed for banana. This is because banana can be grown all round the year and
therefore does not need to be stored after harvest season. Banana is also harvested before
fully ripe enabling it to be handled and transported to the consumption market whilst it is
harder and less susceptible to damage. Cold chain technology is being used for banana
primarily for the export (very low volume) and processing industry. Sorting and grading is
minimal and mostly done manually. There are very few pack houses in the region. Some of
them are described below:
MSAMB Export Oriented Banana Pack House
An export oriented pack house of MSAMB, under assistance from APEDA, has been set up
at Savda in Jalgaon. This is a modern packing hall for banana for export that has been in
operation for a few months. Facilities in the pack house include sorting, grading, pre-cooling,
ripening, a pack line with vacuum packing benches, and cold storage. It has five ripening
chambers each with 5 MT capacity and a cold storage of 25 MT capacity. The insulation on
the cold store consists of modern composite polyurethane panels and the refrigeration
equipment is modern using self contained evaporator and fan units within the cold store.
Ventilation for gas and humidity control is basic but the stores are designed for short term
shortage before loading to a refrigerated shipping container. The pre-cooling chamber is used
to reduce the temperature prior to storage.
The Tapti Valley Banana Wine & Products Cooperative Society has taken the facility on
annual lease basis from MSAMB and processes banana on job work basis. Export quality
banana is processed at the facility and is sent to Jawaharlal Nehru Port Trust (JNPT) Mumbai
for export to Gulf markets.
38
Packaging Line
Cold Store
FINAL REPORT
Pre- Cooling Chamber
Washing Sorting Grading Line
As per feedback, the capacity of the facility is under utilization as it does not get enough
volume for processing. Lack of on-farm aggregation facility and proper transportation to pack
houses result in physical damage of produce (for e.g. bruises) which lowers volume of export
quality grade from the lot.
BananaPackHouse,Chinnawal,RaverTaluka(Jalgaon)
MSAMB, with the assistance of FAO, set up a pack house at Chinawal village in Raver
taluka in 2003. Facilities in pack house include washing, sorting, grading and packing. The
plastic crates from harvest are placed on an overhead conveyor system and dipped in the
treatment tanks before being taken to the pack bench for drying and packing.
MAHABANANA carries out primary processing and packaging of grade-A banana. There is
lack of on-farm collection centres due to which there is a higher wastage during
transportation to the distant pack house. As a result, almost 30 percent of the produce falls
under grade-B during sorting and grading at pack house. In addition to this, the pack house is
not supported by cold chain.
This facility was designed for export. Six containers were exported but money was lost on
these and the facility was not used beyond this. The losses may have been due to problems
with quality and shelf life due to the following:
The farmers claimed that the conveyor speed and size of the dipping tanks is improper
and the dipping is too fast;
There was no pre-cooling facility and banana was loaded to shipping containers at field
temperature;
Although shipping containers were refrigerated, the refrigeration units could not remove
the field heat and thus bananas produced ethylene, which accelerated the ripening
process. Apart from these, there are some companies that procure banana for processing
39
FINAL REPORT
and fresh trading and export. They have their own pack houses with ripening facilities
and cold store.
JainIrrigationSystem
JainIrrigationSystem,a25yearoldcompanyheadquarteredatJalgaon,starteditsbusinessofmanufacturing
differenttypesofirrigationsystemsin1989.Thefirmhasventuredinthebusinessoffoodprocessingin1994
and has setup modern integrated food processing facilities for dehydration of onion, vegetable and
productionoffruitpurees,concentratesandpulpinJalgaoninMaharashtraandChittoorinAndhraPradesh.
TheseplantsareISO9001&HACCPcertifiedandmeetInternationalFDAstatutoryrequirements.Todayitis
recognized amongst the top food processing companies in the country. The product profile mainly includes
dehydrated Onionandvegetable products andaseptic fruitpurees, concentrates andjuices,IQFandFrozen
products.Thefacilitiesincludefollowingannualinstalledcapacityforfruitandvegetableprocessing.
FruitPulpsandConcentrates
FrozenFruits
Onion&VegetableDehydration
100,000MT
5,000MT
120,000MT
4000MT(Cumulative)
Banana,OnionandMangoarethemaincropsprocessedatJainsfollowedbyotherfruitsandvegetables.The
company is a key ingredient supplier to major players like Pepsi, Knorr and Parle Agro etc in addition to
catering offshoremarketsas well.Thecompanytodayhasaccess to variousmarkets acrosstheglobe.The
company is also actively engaged in providing technical assistance to the farmers in its catchment area of
operation in terms of providing genetically superior planting materials, efficient water and fertilizer
management system and agronomical guidance. It also buys fruits and vegetables from growers under
contractual arrangement and processes them at its respective processing facilities. Selected varieties of
Banana, Guava, Mango, Pomegranate, Aonlas, Papaya and Tomato puree are processed in the plant. Jain
IrrigationshavealsosetupamodernR&DandincubationcenteratJalgaonforinventionandtestmarketfor
newproductsinfoodprocessing.
In spite of such a huge production base concentrated in a radius of about 75 km in 6-7 blocks
of the district and almost round-the-year availability, volume of exports to potential markets
is almost negligible. While the production clusters have highly evolved linkages with various
domestic consumption markets, they hardly have been able to establish such linkages with
export markets to leverage its strengths. In order to provide a strong platform for export of
Banana, Directorate of Agricultural Marketing and Maharashtra State Agriculture Marketing
Board together facilitated the formation of MAHABANANA, which is the apex cooperative
marketing society. It was registered in January, 2002 and the registered office is located at
APMC, Jalgaon. The main objectives of the society are as follows:
To plan a strategy for Banana export and to implement export process
To supply tissue culture plants of Banana varieties having export potential and also
provide technical guidance for cultivation
To organize seminars, workshops and demonstrations to create awareness about

cultivation of export quality Banana and post-harvest management
To include more numbers of cooperative fruit sell societies as partner members of

MAHABANANA.
During the year 2006-07, MAHABANANA facilitated sale of about 1300 MT which were
sent to domestic markets in Delhi, Punjab, Haryana and J&K. It has also exported about 20
MT of Banana under the brand name of MAHABANANA to Dubai (UAE). For export
purpose, it has actively done the exercise for selection of appropriate farms, covering banana
bunches with perforated poly bags, farm management including use of appropriate
40
FINAL REPORT
insecticides and pesticides and proper post harvest management. It has played a key role in
setting up of a banana pack house set up by The Shetkari Fruit and vegetable cooperative
society at Chinawal village in Raver taluka. In addition to above activities, the apex society is
also engaged in extending credit facility to its members at reasonable interest rates.
ShriTandulwadiHingoneGroupCooperativeFruitSellSociety
Thesocietywasestablishedintheyear1945inVillageKajgaonunderBhadgaontalukainJalgaondistrict.This
65 year old society is one of the few successful cooperative societies in the district. There are about 1550
members enrolled in the society. It plays a key role in marketing of Banana in the cluster. It is engaged in
providing financial assistancetoitsmembersandalsofacilitatesmarketinglinkagesforsaleof the produce.
Duringtheyear200809,thesocietysold4600MTthroughlocalmerchants.Thecommissionchargedbythe
societyfromitsmembersis5percent.Thesalehappensthroughaprefixedpricewiththelocalmerchantand
societyreceivespaymentwithin10daysofdispatchafterwhichthemoneyispaidtothegrowers.
Generally, the marketing officer of the society is in continuous touch with the local merchant to assess the
demand during the season. He then liaison with growers to firm the plan for harvesting, dispatch etc. It
arrangeslabourforharvest,loadingandtransportetcandensuresthatproduceisdispatchedaspertheplan.
Thesocietyalsoprovidescroploantomembergrowersforaperiodofoneyearorforacropseason.Therate
of interest charged by the society varies from 810 percent. Typically, farmer repays the loan out of the
proceedsofsaleofthecrop.Duringtheyear200708,thesocietydisbursedanamountofRs.1.93mntowards
croploantoitsmembers.
4.2 GAPSINTHEVALUECHAINANDPOTENTIALINTERVENTIONS
An assessment of the range of activities under the value chain was undertaken to understand the
gaps and inefficiencies in the banana value chain. A detailed structured survey was carried out to
map the existing supply chain and identification of gaps at each stage, with added focus on
institutional, infrastructural and logistical barriers. After the detailed field survey, the gaps
identified were discussed with a range of key stakeholders to get their feedback on the analysis
and understanding of the issues. The major gaps identified in the value chain of banana are as
follows:
Traditional methods of post harvest mechanism is followed which leads to damage of

fingers.
Farm level collection centres are absent; sorting, grading, de-handing, washing and
packing is virtually absent in the area.
Since de-handing is done at destination markets, transportation of central stem along

with the bunch adds up to the cost of transportation.
41
FINAL REPORT
25-30% of the fruits are wasted along the value chain as mentioned earlier.
Pack houses in the region are few and the pack houses already present in the region are facing
problem in procurement and quality maintenance mainly due to the fact that these are stand
alone facilities without support infrastructure/facilities. There is a good potential of integrated
facilities which would include the following:
Packhouses
Modern Pack houses may be created at the main production clusters in the region which
would cater to the banana grown in the surrounding area having a truck travel time of about
2-3 hrs from the farm to the pack house. The pack houses would have the following
infrastructure:
a. De-handing, Washing and De-sapping facilities
b. Sorting and Grading Line
c. Fungicidal Treatment facility
d. Packaging facilities (in corrugated cartons/crates)
4 pack houses for banana in Jalgaon district are proposed with the above facilities. The
proposed locations are Anturli, Padalasa, Kajgaon (Chopada) and Galangi.
42
FINAL REPORT
5 FOCUSCROP:ONION
Maharashtra produces 25-30% of the total production of onions in the country and contributes
to about 80-85% in the total onion export. Total area under onion cultivation in Maharashtra
increased from 0.15 million Ha in 2005-06 to 0.25 million Ha in 2007-08 and the production
also increased from 1.87 million MT to 4 million MT during the same period. Productivity of
onions in Maharashtra is around 15 MT/Ha which is marginally higher than the national
average.
Nashik and Ahmednagar are the major onion producing districts of Maharashtra. Total
production of onion in Nashik and Ahmednagar is approximately 0.6 million MT and 0.75
million MT respectively and together they account for 55% of the total onion production of
the state. In Nashik district, productivity of onions is around 18 MT/Ha. Niphad, Baglan and
Yeola are the major taluks under onion cultivation in Nashik district. In district Ahmednagar,
major taluks are Nevasa, Sangamner, Srirampur and Rahuri.
Areaandproductionofonion
Districts
Nashik
Ahmednagar
Jalgaon
AreainHa
ProductioninMT ProductivityinMT/Ha
32690
588420
18
45120
740314
16
5120
70375
14
Onion is cultivated in three crop seasons viz. kharif (June-Aug), late kharif (Sep-Dec) and
rabi/summer season (Jan/Feb-March/April). Around 50-60% of the crop is cultivated in
rabi/summer, 30-40% in late kharif and 10-15% in kharif season. Kharif and late kharif crops
are sold in the market after harvesting and are not suitable for storage due to their short shelf
life, whereas rabi/summer crop can be stored upto 4-6 months. Major varieties cultivated in
the region and their keeping quality is mentioned below:
Variety
Season
Colour
Storage
N53
Kharif
Red
PoorStorage
N241
Rabi
BrickRed
GoodStorage
N25791
Rabi
White
GoodStorage
PoonaFursungi
Rabi
RoseRed
GoodStorage
While N-53 variety is cultivated in kharif season, N 2-4-1, N 257-9-1 and Poona fursungi are
cultivated in rabi season.
Onion is a six months crop and it is grown by transplanting the seedlings which are 4-6 weeks
old. Three crops of onion are taken in the region. Most farmers take 2-3 crops in a year on
different land parcels of their land holding depending on the crop rotation planned. It has
been observed that 2 crops are taken by the farmers on the same piece of land in a year.
Various crop stages and their timing in a year is mentioned below:
OnionSeasons
Nursery
Transplanting
Harvesting
Kharif
JuneJuly
August
NovemberDecember
Rabi
September
November
MarchApril
Onion is sold through APMC markets in the region. There are about 12-14 big onion markets
operating in Nashik district and 8-10 markets in Ahmednagar district. While Lasalgaon,
Pimpalgaon, Malegaon, Umbrane, Yeola and Manmadare important markets in Nashik
43
FINAL REPORT
district, Srirampur, Rahuri, Sangamner are the major market for onions in Ahmednagar
district.
5.1.1 TradechannelofOnion
The following illustration depicts the various stakeholders of the onion (grown in Rabi
season) supply chain:
While kharif and late kharif onion is sold by the
farmers within 15 days to 1 month after harvest,
rabi onion is stored by the farmers in on-farm
bamboo based conventional storage structures.
Onion is sold in APMC markets through open
auction system. The commission agent facilitates
the trade and the produce is bought by the
wholesaler. The wholesaler does the distribution
of produce and sells to either retailers or
wholesalers of distant markets. The role played
by major stakeholders and the value added at
each stage is briefly captured below:
Farmer:
As mentioned earlier, onions are cultivated by
transplanting of seedlings. The seedlings are
prepared by the farmer in his own nursery. About 6.25 kg of seeds are required to prepare
seedlings for a hectare. The cost of seeds is around Rs 5000for 4 kg of seeds. The total cost
incurred by the farmer in raising seedlings for transplanting in a hectare is around Rs 8900.
Activity
CostperHa
Seedfornursery
7800
Fertiliser
500
Pesticides
600
Total
8900
Farmers incur a cost of around Rs 63000 in cultivating onion in a hectare. The break up of the
cost of cultivation is mentioned below:
Activity
CostperHa
Nursery
8900
Labourfortransplanting
9000
Fertilisers
7500
Pesticides
5000
Irrigation
750
Labourforinterculture
23000
Labourforharvesting
9000
Total
63150
44
FINAL REPORT
The intercultural operations are carried out three times by the labourers. Farmers give
contracts for arranging farm labour and the price is negotiated between the farmer and the
contractor on the basis of size of farm. The entire activity is carried out by farm labour.
After harvesting, onions are cured on farm and stored in bamboo based conventional
structures. The width of the storage is about 8-10 feet and there is no ventilation except for
the few outer layers of the produce. Conventional storage structures have many inherent
problems and cause losses to the produce stored. They are built on the ground which leads to
rotting of bulbs, which come in contact with the soil. Dampness during rains and sometimes
direct water flow is among the other problems of conventional storage.
Presently, farmers in the region are resorting to improved storage structure where the lower
base of onion storage structures is raised 1.5-2.00 ft from the ground level.
As already mentioned, kharif and late kharif onion is sold by the farmers within 15 days to 1
month and around 40- 50% of rabi/summer onion is stored by farmers in on-farm bamboo
based conventional storage structures. The farmer takes out the onion from storage when he
has to sell it in the APMC market. The produce is graded manually at farm level and packed
in gunny bags of 50 kg each or brought loose to the nearest APMC market in trucks or tractor
trolleys by the farmers. In Srirampur and Rahuri markets, onions packed in gunny bags are
traded while in case of Pimpalgaon and Lasalgaon markets, onions are brought in loose
condition. Onion is traded in the APMC markets through open auction system. A commission
of 6% is levied on farmers by the registered commission agents.
Commissionagent:
The commission agent facilitates trade between the farmer and the wholesaler and for which
they charge 6% commission from the farmer. Payment to the farmer is made immediately by
the commission agent on behalf of the wholesaler.
Wholesaler:
These are traders/ or commission agents of distant markets or wholesalers of local markets.
The APMC markets levies a market cess of 1% on wholesalers. The wholesalers either sell
the produce directly or store it, depending upon the market conditions. The wholesalers store
onions in storage structures, owned or rented, after buying it from APMC market. Some of
the large traders also provide storage facility to other traders on rental basis. Storage rentals
generally vary from Rs 10,000 12,000 per season for a capacity of 50MT. The stored
produce is graded, packed and then dispatched to destination markets. Grading is done
manually on the basis of size. Mostly women and children (girls) are engaged in
grading/sorting operations. Trader pays Rs. 3 per bag of 50 kg each for sorting, grading and
45
FINAL REPORT
bag filling. A team of 25 can grade and sort about 20 MT onions per day. Labour charges for
weighing, stitching and loading on trucks are Rs. 0.60 per bag.
5.1.2 PricebuildupalongthevaluechainofOnion
Value chain of 1 kg of onion indicating the various activities and cost build-up at every step
has been mapped, as shown below. Some of the assumptions of the price build up are:
It is assumed that onion is traded at Srirampur APMC and sold in local markets by the
retailers.
Onions packed in gunny bags are brought to the APMC market.
Grading and packing have been done at the farm level.

ConsumerPrice
Retailersmargin
Losses
Retailersexpense
Wholesalersmargin
Rs1
Rs0.5
Wastage
Rs1
Wholesalersexpense
Farmgateprice
Rs1.5
Rs0.5
Rs7.5
Rs14
Rs2
Rs10.5(WholesalersPrice)
The average cost of onion cultivation comes to around Rs 3.5/kg. Generally, farmers incur a
cost of Rs 60,000 per Ha on onion cultivation and the production is around 20 MT/Ha.
Around 2-3 % of onion is wasted during harvesting and weight/value loss to the tune of 520% has been observed during storage. Farmers incur a cost of Rs 1.4/kg in marketing his
produce (which includes grading, packing, transportation and commission) and his net
realization is Rs 3.1/kg. Farmers realization is better after 2-3 months of harvest, but its
offset by the losses (weight loss, rotting and sprouting) during storage which ranges from 520% depending on the duration and condition of storage. The produce is bought by the
wholesaler, who earns a margin of Rs
1/kg.Onion is mainly transported by trucks;
however some quantities are also transported
by rail from Niphad. The retailers margin is
around Rs 2/kg and price jacks up to Rs 14
when it reaches consumers.
Some of the salient features of the price build
up are:
There are 3 intermediaries between the

farmer and the consumer.
46
FINAL REPORT
The price realized by the farmer is almost half of the price paid by the consumer and
farmer earns 22 paisa of a consumer rupee.
In case of onion, moisture loss/weight loss is quite high i.e. around 10-20%, depending
upon the storage conditions.
Wholesalers and retailers earn 7 paisa and 14 paisa of a consumer rupee respectively.
The price build up can be summarized, as below:

Particulars
Costofcultivation/Purchaseprice(Rs/Kg)
Sellingprice(Rs/Kg)
Pricespread
Farmer
3.0
1.4
7.5
3.1
Wholesaler
7.5
2
10.5
1
Retailer
10.5
1.5
14
2
Nashik district has 2.13 lakh MT of storage capacity for onions at farm level as well as
around 87,000 MT storage capacities at market level. However, conventional storage of
onions witnesses several problems viz. loss in weight, sprouting and rotting of bulb. To
reduce these losses, Maharashtra State Agricultural
Marketing Board (MSAMB) with the help of
NABARD and National Research Centre for Onion
and Garlic, Rajgurunagar has developed a scientific
onion storage structure. A scheme has also been
launched by MSAMB under which, a subsidy of Rs.
1500/- per MT for 5, 10, 15, 20, 25 & 50 MT
capacity onion storage structures will be granted to
farmers, Cooperative Societies and APMCs.
Improvedstorage
An irradiation facility has been set up by MSAMB at Lasalgaon and another irradiation
facility has been set up by Hindustan Agro in Rahuri. The details are as follows:
IrradiationfacilityatLasalgaon,Nashik(jointlyrunbyBARCandMSAMB):
The facility was set up by Bhabha Atomic Research Centre in 2003, with an investment of
Rs. 80 million. The plant can handle up to 10 MT of produce per hour and is approved by
USDA. Initially the plant was set up to cater to irradiation operation in onion and potato to
prevent sprouting and hence enhanced shelf life. Later, it was upgraded to handle mango after
India started exporting mango to US. In mango, irradiation destroys stone weevil, which is a
required for quarantine purposes. Regular inspections by PPQ (Plant Protection &
Quarantine) are done at the facility.
Quantity handled at the facility
Year
200910
200809
200708
Quantityhandled(MT)
Mango Onion
130
700
275
150
The total time taken in the irradiation process from

receiving to dispatch is about 4-5 hours. Time taken inside
the irradiation plant for various produce varies such as
about 1.5 hrs for onion and 2.5 to 3 hrs for mango.
47
FINAL REPORT
Treatment is done by Cobalt-60 and gamma rays. The charges for treating different
commodities are as follows;
Onion: 10% of the price of produce
Mango: Rs. 25 per box of 3.5 kgs each
IrradiationfacilityatRahuri,Ahmednagar(ownedbyHindustanAgro
CooperativeSociety):
The facility in Rahuri is under construction. It is being set up by a cooperative society, with
transfer of technology by BARC. The facility would be able to handle 20 MT per hour, once
it is operational.
Some of the gaps identified in the value chain are given below:
Since farmers have limited information about market, they bring the produce to APMC
market without knowing about the price trend and sell the produce at the prevailing
price.
Because of inadequate storage at APMC markets, onions coming to various markets are
sold on the same day even if prices are low. Farmers do not take back the produce
because it would jack up their transportation cost.
Manual grading is practiced at farm/market level, which is time consuming.
It is proposed to set up handling facilities for onion at three spokes in Nashik district and one
spoke in Ahmednagar district. In Nashik district, storage structures would be set up at
Malegaon,Chandwad and Pimpalgaon spokes and in Ahmednagar district, the proposed
location for the spoke is in Sangamner.
48
FINAL REPORT
6 FOCUSCROP:TOMATO
Maharashtra ranks 7th in tomato production in the country and it occupies a share of 7% in
national production. In 2007-08, total area under cultivation of tomatoes in Maharashtra was
around 32,000 Ha with production of around 0.7 million MT. Productivity of tomatoes in the
state is 22.2 MT/Ha that is higher than the national average of 17.9 MT/Ha for the year 200708. The production trend of tomatoes is captured in table below:
Year
200506
200607
200708
AreainHa(000Ha)
35
30.7
32.2
Productionin000MT
887
681.3
715.3
Productivity(MT/Ha)
28.2
22.2
22.2
*Source: NHB database
Nashik, Ahmednagar and Pune are the major tomato producing districts of Maharashtra.
Pimpalgaon in Nashik, Sangamner in Ahmednagar and Narayangaon & Rajgurunagar in Pune
are the famous markets of tomatoes all over the country.
In Nashik region, total area under cultivation of tomatoes in 2007-08 was around 10,000 Ha
and production was 0.19 million MT.
Districts
Nashik
Ahmednagar
Jalgaon
Total
AreainHa
8457
1828
492
10777
ProductioninMT
135312
50526
9056
194894
*Source: Directorate of Horticulture, Govt. of Maharashtra
As shown above, Nashik and Ahmednagar are the major districts under cultivation of
tomatoes. Niphad, Vinchur, Dindori, Sinnar, Chandvad and Nashik are the major tomato
producing talukas in Nashik district and Akole and Sangamer in Ahmednagar district.
Abhinav, 1389, Utsav and Samrat are the major varieties cultivated in the region. Most
farmers prefer to grow long varieties of tomato as it contains more flesh and less juice and
have relatively better shelf life as compared to round varieties. Some of the major varieties
and their characteristics are:
Abhinav: Abhinav is a high yielding late variety. Plant height goes up to 4-4.5 feet and
the yield potential is around 40 MT/Ha under favourable weather conditions. The fruit is
of good quality and fetches a higher price by Rs. 1-2 per kg as compared to other
varieties. Seed of this variety is about 2.5 times costlier as compared to other varieties.
1389: 1389 is also a high yielding variety and it gives an average yield of about 25-30
MT/Ha under favourable weather conditions. Plant height is relatively short and goes up
to 3-3.5 feet.
Tomato is a four months crop and it is grown by transplanting the seedlings which are 3-4
weeks old and 6-8 cms in length. Three crops of tomato are taken in the region with a gap of
about 1 month for a continual supply for about 6 months. Most farmers take 2-3 crops in a
year on different land parcels of their land holding depending on the crop rotation planned. It
has been observed that 2 crops are taken by the farmers on the same piece of land in a year.
Various crop stages and their timing in a year is mentioned below:
NurseryStage
May
Transplantingstage
June
Harvesting
JulyendAugust
49
NurseryStage
June
July
Transplantingstage
July
August
FINAL REPORT
Harvesting
SeptemberOctober
OctoberDecember
Fruits are harvested on full maturity when the colour of fruit starts turning from green to
yellow but the fruit is still unripe and firm. Ripe red tomatoes are sent to the nearby markets :,
Mumbai, Surat, Ahmedabad etc. and firm tomatoes with yellowish colour are sent to Kolkata,
New Delhi, Jaipur, Jammu etc. and smaller sizes are sent to Ranchi, Patna and Allahabad etc.
6.1.1 Tradechanneloftomato
The following illustration depicts the various stakeholders of the tomato supply chain:
The major players involved in trade
Farmer
of tomato are farmer, commission
agent, wholesaler, retailer, exporter
CommissionAgentat
and tomato processor. Farmers bring
Processors
APMCmarket
their produce to APMC markets,
where tomatoes are traded and bought
Trader
by the traders. The commission agent
facilitates trade between the farmer
and the wholesaler. It also purchases
Wholesaler
tomatoes on behalf of exporters as
well as processors and sends it to
Retailer
them. The role played by each
stakeholder and the value added at each stage is briefly captured below:
Exporters
Farmer:
Most of the small farmers prepare their own nursery for raising tomato seedlings due to its
cost effectiveness. The cost of raising seedlings at own farm comes to less than Re.1/seedling.
There are local nurseries as well as some government nurseries that supply tomato seedlings
to the farmers at a cost of Rs. 3/seedling. On an average, 7500 seedlings are transplanted in a
hectare. Farmers incur a total cost of Rs 50,000- 55,0004 in cultivation of tomatoes in a
hectare. Besides this, farmers spend around Rs 25,000-30,000 on bamboo sticks and wires,
which can be used for around 4 years. Tomato plants are given support of bamboo sticks and
tied with wires so that the plant can bear the fruit weight and fruit is not spoiled by touching
the ground. A bundle of 100 bamboo sticks costs Rs. 800-1000 and the price of wire is about
Rs. 60000/MT. 25 bundles and 100-125 kg of wire are required in a hectare. Some farmers
also use strings instead of wire, which costs much lesser.
It does not include cost of bamboo sticks and wires used for giving support to tomato plants
50
FINAL REPORT
The cost of cultivation in a hectare is represented in table below:

Inputs
CostperHa(Rs)
Seeds
3750
Fertilisersandpesticidesinnursery
2500
Labourforplacingsupporttotheplants
18750
LabourforHarvesting
10000
OrganicManure
5000
FertiliserandMicronutrient
6250
Pesticides
5000
Irrigationandotherexpenses
3750
Total
55000
Dug wells and bore wells are the most common source of irrigation in the region. Some
farmers use drip irrigation particularly in the areas where water is scarce, whereas most of the
farmers use flooding method of irrigation for tomato. Tomato is grown in rotation with onion,
wheat and pulses. The economics of tomato cultivation in a hectare has been given in the
table below, with an assumption of productivity at 25 MT per hectare.
Particulars
Costofcultivation
AmountinRs
55000
Bamboosticksandwires*
3125
PlacticCrates**
1375
TransportationCost***
10000
Other Expenses@ 8% (Commission @
6%+marketfee@1.05%+others)
9000
TotalExpenses
78500
Income@Rs.4.5perkg.
112500
NetProfit
34000
NetProfitperkg
1.4
*apportionedcostwithanassumptionof2cropsperyear,4yearsoflifespanforthebamboosticksandwire
**apportionedcostwithanassumptionof3cropsinayearand6yearsoflifespanforplasticcrates
***Assumptionoftotalyieldtobe10MT/acreandtransportationcostRs.8percrate
The average yield of tomatoes in Nashik and Ahmednagar districts is around 17-20 MT/Ha.
About 4-5% of tomatoes are wasted at farm level due to over ripening because of delayed
harvesting and pest attack.
Tomatoes are harvested by the farmers on full maturity when the colour of fruit starts turning
from green to yellow. The fruits are collected on a tarpaulin or a cloth on the field. Harvesting
is done manually during day time and about 10-12 harvestings are done for each crop. Each
harvest is done at an interval of 3-4 days and some fruits ripe fully during the gap. The
prevailing labour charges for harvesting of tomato are Rs. 8 per crate. The tomatoes are
graded manually on farm according to size and maturity levels. Four grades are popular
among the farmers;
Red (fully ripe) big size
Fully mature (half ripe) big size
Fully mature (half ripe) medium size
Unripe and small size fruit
51
FINAL REPORT
Graded tomatoes are put in plastic crates. Each plastic crate can hold around 20kg of
tomatoes and the cost of a crate is around Rs 160. Around 150-175 crates are required to
handle crop of one hectare. Tomato farmers reported that the normal life of a plastic crate to
be about 6-7 years.
Farmers bring their produce to APMC markets in plastic crates. Most of the farmers use hired
vehicle that carries the produce of many farmers to get the full vehicle load. Even if the
produce is brought to the market in an aggregators vehicle, most of the farmers themselves
come to the market. The transporters charge on per crate basis from the farmers depending on
the distance from farm to the market, which is generally between Rs. 8-12 per crate for a
distance of 20-30 kms. Pick-up van with a capacity of 1.5 MT and tractor trolleys are the
most common mode of transport used by the farmers. Some farmers also get their produce in
Toyota Qualis or Tata Sumo owned by them.
The evacuation time of tomatoes depends upon the timing of APMC markets. If the produce
is sold to the evening market, retention time at farm is 2-4 hrs and if it is sold in the morning
market, retention time at farm is about 12-16 hrs. Some APMCs operate in the afternoon such
as Pimpalgaon, which is known to be the biggest tomato market in the region, whereas others
like Sangamner and Nashik APMCs operate in the morning hours.
Unlike in other vegetables where farmers prefer to go to nearest APMC markets, tomato
farmers are attracted more towards Pimpalgaon APMC since large traders are available and a
better price can be expected. Farmers have preference for Sangamner APMC since there are
no commission agents and produce is sold directly to traders through negotiation hence
farmers realization is higher by 6%.The price discovery method varies from market to
market. Nashik APMC has an open auction system, whereas in Pimpalgaon and Sangamner
APMCs, one to one negotiation takes place. Traders observe the quality and quantity of the
produce and contact with their counterparts in distant markets to check the demand and
market price at other places. Payment is made to the farmers within 24 hrs of the sale of
produce.
All the APMCs in Nashik have electronic display system, where prices of major commodities
in important markets of the country are displayed. However, it has been observed that farmers
rarely come to see the displayed price. Some APMCs like Lasalgaon still update the daily
minimum, maximum and average price and arrival of major commodities in nearby major
markets and announcements are made every day morning on the price and arrivals of
previous day.
Pimpalgaon APMC has taken some initiatives to sensitize farmers and enable them to take an
informed decision. SMS service has been recently started by the APMC to disperse the
information regarding daily price of tomato and onion. About 10000 farmers are covered
under this initiative so far and SMS is sent to them everyday at 11:00 a.m. after the market
price is opened. Also, a weekly report is published in all Marathi newspapers
Tomato is a very uncertain crop due to high price fluctuation. The price realized by the
farmers is on the basis of arrivals in the market, demand at consumption markets and
grade/quality of the produce. Average market price of different grades is mentioned below:
Grade
Red(fullyripe)bigsize
Fullymature(halfripe)bigsize
Fullymature(halfripe)mediumsize
Unripeandsmallsizefruit
%ofTotalHarvest
1015
3540
3035
1015
AverageMarketPrice(Rs.)
45
56
45
13
52
FINAL REPORT
This year the price realized by farmers in Nashik APMC market varied from Rs. 1.5 per kg in
September month to Rs. 12 per kg in November. Prices in September were very low because
of huge arrivals in the market. The crop was very good due to low rainfall and some of the
farmers reported crop productivity as high as 50MT/Ha. After the unexpected rains in the
month of November, standing crop was adversely affected and resulted in high market prices
due to low arrivals in the market. Still, tomato is a widely grown crop as it is of short duration
and provides quick returns to the farmers for their regular needs.
Generally, farmers take credit from village credit cooperative societies. The current rate of
interest charged by the societies for crop loan is 6% and about Rs. 37500/Ha is given to
farmers for cultivation of tomato. Crop loans are given for the duration of up to one year.
Farmers open their account with the society and 5% of the total loan amount is deducted and
kept as fixed deposit until the fixed deposit amount reaches Rs. 20000. In case of default due
to crop failure or any other reason, a farmer does not get further credit from the society and
has to go to the local money lenders. These money lenders are commission agents or traders
of the nearby APMC markets. The rate of interest charged by them is 3% per month, which is
quite exorbitant. The settlement is done at the time of sale of produce by the farmers and the
money is deducted from farmers payment. In certain cases, commission agents do not charge
interest on the money rather take other advantages, which are as follows:
First right to buy / facilitate sale of the produce
In the event of low production or crop failure in the region, farmer would help the
lender in getting produce from his fellow farmers or relatives, hence assuring better
business to the lender
Commissionagent:
They are registered with APMCs and have relations with both traders and farmers. Farmers
take their produce to the traders who they feel will get them the best price on the basis of their
own experience and relationship developed over the years. At the same time, traders inform
their desired purchase price to the commission agent after enquiring the price and demand of
the produce at distant markets. Commission agent plays an important role to facilitate the
transaction to the satisfaction of both trader and farmer and thus charges 6% commission
from the buyer of the produce.
Another important role played by the commission agent is to make timely payment to the
farmers. As per the guidelines issued by APMC, farmer should be paid within 24 hours of
sale of his produce. Since traders, who are the buyers of the produce, send the produce to
distant markets and get paid only after the produce reaches to the destination; commission
agent pays to the farmer on behalf of the buyer. Payment terms between the trader and
commission agent are on mutually agreeable terms, which may range from one week to four
weeks depending on their relationship.
As mentioned earlier, commission agent also provides credit support to the farmers and get
first right to facilitate sale / buy the produce. In some cases, no interest is charged by the
commission agents on the amount lent to the farmers, if he sells his produce through the
lender.
Commission agents are mostly local people and hold a powerful position in the value chain. It
was informed by a commission agent in Pimpalgaon APMC that some outside traders started
applying for license to operate as commission agent to save 6% commission. Their VC power
53
FINAL REPORT
can be gauged from the fact that commission agents association was able to convince the
APMC not to issue licenses to outsiders and they should act only as buyers.
Trader:
As per rough estimation by the commission agents and traders operating in Pimpalgaon
APMC, there are about 1000-1500 traders operating in Nashik region. About 30-35 are big
traders operate in the area, who deal with about 2-3 trucks daily on an average. Most of these
big traders operating in the region are from other states and only about 10-15% is from within
the state. These traders have trading as their family business and some of their family
members or relatives operate as wholesalers in distant markets such as Delhi, Chandigarh,
Jaipur, Kolkata, Bhubneshwar etc. They migrate to Nashik during tomato season for about six
months and to some other tomato producing belt in other states thereafter. Some traders also
trade in grape after tomato season is over.
APMC provides space to these traders for sorting, grading, packaging and dispatch of
produce, but only a few traders have been accommodated by the APMC due to limited space
and huge volumes handled in the market. Many traders take private land outside APMC
premise on rent for the season and set up temporary shops there. Area of these places range
between 1500 -2500 sq. ft. depending on the volumes handled by the traders. Rentals vary
from Rs. 20000-25000 for the entire season.
Though farmers bring the graded produce to the market, traders further grade the produce on
their own parameters depending on the requirement of the destination market. Grading and
packaging is done by employing labourers. Like traders, majority of labourers are also
migrants from other states. They come during the tomato season and stay in the traders shop
itself. Generally experienced people bring their own team of about 15-20 people and take
labour contracts for the entire season. A team once contracted, would work only for one
trader for the entire season. The contractor is being paid on per crate basis. Normally the
charges are Rs. 2-3 per crate for sorting, grading, crate filling and loading. These operations
are being carried out during any hour of the day and night as well as per the requirement.
There are no fixed working hours. A team of 15 people can process 25-30 MT per day.
Large traders use their own plastic crates for further transportation. Newspaper is used for
cushioning so that the produce could be saved from damage during transit. Only English
newspaper is used for the purpose as the quality of paper and ink are better than other
newspapers. These old newspapers are available at Rs. 10-12 per kg and one kg newspaper is
sufficient to provide cushioning to 7-8 crates. Traders reported normal life of a plastic crate to
be about 10 years.
In some cases, wooden boxes are also used to pack tomato. It generally happens in case of
small traders who do not have empty crates available and the buyer agrees to pay for the price
of wooden packaging. Newspaper is used as cushioning in wooden boxes also. Each wooden
box contains 20-28 kg of tomato and cost of wooden box ranges from Rs. 30-55 per box.
Lower quality boxes are used for relatively shorter distances such as Nagpur, Chhattisgarh
and Andhra Pradesh, whereas good quality boxes are used for far off markets in Uttar
Pradesh and Bangalore. Wooden boxes are generally used only once
Tomatoes are transported to destination markets in trucks of 10 MT and 16 MT capacities.
Each truck of 10 MT can carry about 500 loaded crates of 20 kgs each and 1500 empty crates.
Transportation cost varies depending on distance of destination market. Transportation
charges for a 10 MT truck for different markets are as follows:
54
Route
PimpalgaonDelhi
PimpalgaonMumbai
PimpalgaonBhuvaneshwar
FINAL REPORT
Charges(Rs.)
2200025000
70008000
3000035000
Ripe red tomatoes are sent to the nearby markets and firm tomatoes with yellowish colour are
sent to distant markets. Smaller sizes are sent to Ranchi, Patna and Allahabad etc. The trader
does business on mark-up basis.
Wholesaler:
Wholesalers are based at consumption markets and mainly deal with distribution of produce
to retailers in particular cities, towns or villages. Most big wholesalers in major markets of
India are closely linked with the traders and may even be related.
Exporter:
As per the estimates by traders, about 8-10% of total production is exported out of Nashik
district. Tomato is mainly exported to Dubai and most of the exporters are based at Mumbai.
Orders are placed by them to the local commission agents, who purchase the produce on
exporters behalf and send it to Mumbai. Purchase price for an exporter is Rs. 5-10 per kg of
tomato. The produce is further sorted, graded and packaged at Mumbai for export. The entire
set of activities are given on contract to the team of labourers, who charge Rs. 2.5-3 per box.
A team of 25 people processes about 7 MT tomatoes from unloading to grading, packing and
loading in 3-4 hours. Grading is done in the supervision of the exporter or his employee. Only
big size firm fruit of yellow colour is used for export purposes. For export purpose, CFB
boxes of 5 ply are used for packaging. Each box contains 7.5 kg of tomatoes and cost of such
CFB box comes to about Rs. 29-30 per box.
Processor:
On an average 30-40 MT of tomatoes are bought daily by the local processors for making
tomato powder and tomato puree. Processors generally buy either the smallest size of tomato,
which is not used for table purposes or the over ripe tomatoes, which cannot be sent to distant
markets. Average purchase price for the processor is about Rs. 1-2 per kg of tomato.
6.1.2 PricebuildupalongthevaluechainofTomato
Value chain of 1 kg of tomato indicating the various activities and cost build-up at every step
has been mapped, and is shown in the diagram. Some of the assumptions of the price build up
are:
tomato i.e. Farmer-Commission agent-Trader-Wholesaler-Retailer.
The cost of cultivation does not include cost of bamboo sticks, wires, cost of crates etc.
considered.
Wastages along the chain have been calculated for each level and the cumulative
wastage has been taken into account.
55
FINAL REPORT
Consumerprice
Retailersmargin
Cumulative
Wastage
Wholesalersmargin
Wholesalersexpenses
Rs4.8
Rs2.0
Rs2.0
Tradersmargin
Rs1.0
Tradersexpense
Rs0.8
Farmgateprice
Rs15.5
Rs8.8(WholesalersPrice)
Rs1
Rs4
Rs5.8(TradersPrice)
Farmers incur a cost of Rs 2.4 in cultivating 1 kg of tomato. The produce is harvested and
graded on farm and transported to APMC market by the farmer. He incurs a cost of Rs 0.4 in
bringing the produce from farm to APMC market. Besides this, farmer also pays Rs 0.3 to the
commission agent for facilitating trade. The price realized by the farmer at APMC market is
Rs 4/kg and his net margin is Rs 0.9/kg. After buying tomatoes from the farmer, trader does
further grading and packaging based on demand of buyer/destination market. The total
expense incurred by the trader is around Rs 1/kg and his mark up is around Rs 0.8-1/kg.
Traders send the produces to wholesalers, who are based at consumption markets and mainly
do the distribution of produces to the retailers in a particular city, town or village. The
cumulative wastage observed in case of tomato is around 20%. Analysis of wastage at every
level is shown below:
510%
Retailer
34%
23%
PrimaryMarket/
Trader
FarmLevel
Impropergradingby
FarmLevel
the farmer, losses
Overripeningduetoduring
delayed harvestingtransportation
andpestattack
45%
45%
DestinationMarket/
Wholesaler
Losses
during
transportation
Losses due to
delayedsale/unsold
produce

Particulars
Costofcultivation/Purchaseprice(Rs/Kg)
Sellingprice(Rs/Kg)
Pricespread
Farmer
2.4
0.7
4
0.9
Trader
4
1
5.8
0.8
Wholesaler
5.8
1
8.8
2
56
FINAL REPORT
There are 3-4 intermediaries between the farmer and consumer. The intermediaries are
trader, commission agent, wholesaler, semi-wholesaler and/or retailer. Trader,
wholesaler and retailer do
business/sales on mark up basis.
The price realized by the farmer is

around 1/4th of the price paid by
the consumer. However, the
farmers margin is only 6 paisa of
a consumer rupee.
Though retailers share of a

consumer rupee is 31 paisa, 50% of the wastage along the chain is accounted for, at this
stage because of multiple handling and quality loss in the previous stages.
The wholesalers margin is 13 paisa of a consumer rupee. However, in certain cases, it

is redistributed between the wholesaler and semi-wholesaler.
6.2.1 Postharvestinfrastructure
There is no post harvest infrastructure for tomato in the region. All post harvest activities
such as sorting, grading etc. are being carried out manually. Farmers grade their produce on
the basis of their understanding of pricing for different grades and feedback from the buyers.
Secondary grading is done manually at traders level on the basis of feedback from
consumption market.
Though there are pack houses in Nashik region, but none of them is used for tomato. As per
the stakeholders, operational cost of pack houses and cold chain becomes expensive and the
price recovery for the same becomes difficult.
Some corporate owning retail chains such as Reliance Fresh are in discussion with the
existing pack houses in the region for using them for cut and packaged vegetables for their
retail outlets. However, no such practice has been started so far.
Pimpalgaon, Sangamner, Niphad, Lasalgaon and Nashik are major APMC markets for
tomato. Among the above, Pimpalgaon is the biggest market for tomato. Apart from tomato,
other major commodities traded in Pimpalgaon APMC are onion and loose grape berries.
Details of crop arrival and market fee at Pimpalgaon market are as follows:
Commodity
Tomato
Onion
Grape
Arrival(MT)
117000
520000
2600
%ofCommission
6
4
8
There are 96 registered commission agents dealing with tomato and 39 commission agents
dealing with onion at Pimpalgaon APMC. 113 labourers are registered for loading/unloading
operations and 39 are registered for weighment. Weighment charges fixed by the APMC are
Rs. 2.12 per quintal and for loading/unloading Rs. 2.68 per quintal of produce. APMC takes a
57
FINAL REPORT
deposit of Rs. 3 lakh from the commission agents as security deposit. Market fee and cess is
charged @ 1.05%
As mentioned above, APMC has an electronic price display system, which displays the prices
of major commodities in all major markets of the country. Other facilities include drinking
water, canteen, ambulance etc.
APMC Pimpalgaon is spread over 10 acres and the space is inadequate to accommodate daily
arrivals in the market. Most of the traders have to take space on rent outside the market
premises to carry out the grading, sorting and dispatch operations. Hence, a new market is
being developed by the APMC, which is about 7-8 kms from the existing market. An area of
100 acres has been purchased by the APMC for onion and tomato market. The existing
premise is proposed to be used for pomegranate market once the existing tomato and onion
operations shift to the new market.
6.2.3 InstitutionalInfrastructure
There are more than 3000 Primary Agricultural Credit Societies (PACS) in the region, of
which 849 are in Nashik district, 871 in Jalgaon district and 1287 are in Ahmednagar district.
These PACS provide credit to the farmers for agricultural purposes. Rate of interest charged
by them for crop loans is 6%. Term loan is also given by the societies for purchase of fixed
assets such as drip irrigation system. The rate of interest charged by the societies for term
loan is 12% for loan up to Rs. 3 lakhs and 14.5% for loan more than Rs. 3 lakhs.
There are no cooperative societies working for cultivation and marketing of tomato in Nashik
region.
An assessment of the range of activities under the value chain was undertaken to understand the gaps
and inefficiencies in the tomato value chain. A detailed structured questionnaire survey was
undertaken to map the existing supply chain and identification of gaps at each stage, with added focus
on institutional, infrastructural and logistical barriers. After the detailed field survey, the gaps
identified were discussed with a range of key stakeholders to get their feedback on the analysis and
understanding of the issues. Some of the gaps identified in the value chain of mango are as
follows:
Tomato is graded at farm level, again at trader level and finally at retailer / exporter
level also. Grading at each stage involves a cost and time and the produce goes through
several hands. This causes loosening of skin and pulp and results in lower shelf life of
the produce.
Plastic crates used for tomato are changed at each level of the supply chain. Farmers use
their own crates and traders have their own. Thus multiple handling is responsible for
major losses in tomato, which manifests mostly at retail level. It is observed that more
than 50% of total losses are at retail level but the same is a result of quality deterioration
during previous stages.
58
FINAL REPORT
In case of tomatoes, wastages are as high as 30%-40% (in case of worse weather
conditions) mainly due to attack of insect pest and disease, erratic climatic conditions
and over ripening of fruit due to delayed harvesting.
Based on the need assessment of the tomato value chain, action plan were drawn-up and
stakeholder consultations undertaken to identify areas of potential interventions. It is proposed to
set up 2 pack houses for tomatoes in Nashik district and 1 pack house for tomatoes in
Ahmednagar district. The proposed location for packhouse is Pimpalgaon and Nashik Road in
Nashik district and Sangamner in Ahmednagar district. It is estimated that the throughput of
tomatoes at Pimpalgaon would be around 4000 MT per annum and the other two packhouses
would handle 2000 MT/annum of tomatoes each. Besides tomatoes, Pimpalgaon and Nashik
Road packhouse would receive grapes and vegetables also. Sangamner APMC would also
handle vegetables. The packhouses will have following facilities for tomatoes:
Sorting
Grading
Packaging
The details of the facilities have been captured in the subsequent chapter.
Interventions such as timely information dissemination on weather forecast, potential

damage to the crop and suggested remedial actions may help reduce losses due to bad
weather. Farmers should be educated on right stage of harvesting to prevent fruit over
ripening.
Instead of newspaper, there is a scope for using better cushioning material.
There is a need to establish processing facilities for tomatoes in the region. As there is
wide fluctuation in price of tomatoes, setting up of processing facilities would provide
assured market for farm produces.
59
FINAL REPORT
DPR:NASHIKINTEGRATEDVALUECHAINPROJECT
Spoke
Deola
Spoke
Sinnar
Hub
Pimpalgaon
Spoke
Chandwad
Spoke
Sangamner
Spoke
Anturli
Spoke
Padalasa
Spoke
Kajgaon
Spoke
Galangi
60
FINAL REPORT
7 SPOKE:DEOLA
The proposed spoke at Deola, in the Nashik region, is located 19 km from the National
Highway and has excellent road connectivity.
7.1 FOCUSCROPSANDESTIMATEDTHROUGHPUT
Pomegranate and grape have been identified as focus crops while designing the facility for
the spoke at Deola. It was found during the study that most of the farmers have storage
facilities for onion at their farms and additional storage may not be required for onion.
The existing pack houses in Nashik have a cumulative capacity to process 1000-1200 MT of
grapes per day. While some of the larger pack houses such as Freshtrop have a handling
capacity of 60 MT/batch, other pack houses handle 5 40 MT/batch. Hence the throughput of
the spoke has been designed taking into account the present production in the catchment area,
the present capacities of existing similar infrastructures/facilities, potential for interventions,
financial viability of the proposed infrastructure and stakeholders consultations.
The estimated annual throughput of the pack house in MT is as follows:
Spoke
Grape
Deola
Pomegranate
2000
2000
The arrival pattern of the focus crops in the proposed facility shall be according to the crop
season as follows:
Crops
Jan Feb
Mar
Apr
Grape
Pomegranat
e
May
Jun
Jul

Aug
Sep
Oct
Nov
Dec
As shown above, the seasons for grape and pomegranate are different. The proposed cold
chain infrastructure shall be used for grape during January to May and for pomegranate
thereafter. Though pomegranate is harvested round the year in the catchment area of Deola
but the export quality fruit and more quantities are harvested in August-October months.
Hence it would be economically viable for the spoke to put pomegranate during this period of
the year. Utilization of cold chain for pomegranate during remaining months may be decided
depending on the market scenario.
7.2 PROPOSEDFACILITIES
Facilities have been designed on the basis of requirement of the focus crops with a view to
provide better quality to the consumer and enhanced shelf life of the produce. While deciding
on the capacities, existing facilities, their capacities and utilization have also been taken into
account. The proposed new facilities are as follows:
61
FINAL REPORT
7.2.1 PackHouse
The pack house shall have cold chain infrastructure for handling grape and pomegranate. It is
assumed that 100% quantity of grape and pomegranate arriving at pack house shall go
through the cold chain.
The infrastructure has been designed to process and pack 60 MT of produce per day. Facility
design complies with EHS regulations and provides segregated amenities by gender. The sub
components of the pack house are described in the following sections.
As described earlier, the facilities are modular in nature, 4 modules of cold chain
infrastructure are proposed
Receiving and Holding Area.
Sorting and Grading Area; mechanized conveyor belts as well as static sorting tables.
Inspection and Packaging area tables standard stainless steel type.
Weighing and unitization area certified weighing machines and palletisation

equipment.
Buffer Store (Ante room) holding area for 45 pallets pending pre-cooling.
Pre-cooler Forced Air Pre-coolers: capacity 20 MT (4 pre-coolers of 5 MT each),

each running 3 batches in 18 hour period. In peak season, more than 60 MT will be
pre-cooled daily through these pre-coolers. Pre-cooler size of 5MT selected to cater
to lean periods and to allow faster batch process from line to cooling. Large precoolers of 10MT would imply a longer wait for batch preparation and would reduce
flexibility in low volume periods.
Cold Store 100 MT capacity (4 cold stores of 25 MT each) (daily output plus 40%
stock overrun to cater for storing and possible transport delays). The pre-coolers can
also be used to supplement contingency storage. Cold Store size can be increased if
grapes are intended to be stored locally for seasonal arbitrage (depending on user
business plan) in local market.
Both pre-cooler and cold store refrigeration will cater to 0 to 4 C temperatures and
Relative Humidity between 80-90%
Staging Area (Ante Room) 24 pallets pending dispatch/transport.
Material handling equipment pallet movers, trolleys.
Waste disposal systems.
Vehicle waiting areas.
Crate washing system.
Laboratory for testing pesticide residue

and quality parameter control.
It is expected that the cold chain facility will employ

a minimum of 50 persons for handling this volume.
GrapeProcessflow:
Shelf life of grape at room temperature is about 7-8
days, which can be increased up to 6-8 weeks if kept
in cold chain. Cold chain technology intervention
62
FINAL REPORT
would extend shelf life and produce quality and hence extend the season of grape. Price
realization is better during off season due to limited availability.
The process flow for grape handled through cold chain in the pack house is shown here:
Technology
/Facilities
Description
Grading &
Packaging
Manualmethodofgradingandpackaging.
Generally packed in cardboard boxes (9 10 kg), panets (9 kg) or pouches (4 or 5 kg) for
exportmarkets.
Fordomesticmarket,packedin45kgofCFBboxesandplasticcratesof20kgs.
Precooledforexportandsometimesfordomesticmarket.
ForcedAirmethodofprecoolingisusedingeneralforgrapes
Temp:12C,RH80to85%
Duration:within68hoursofharvest
PrecooledandgradedgrapesarekeptinColdStorages.
ColdStoragerequirement
Temp:1C,RH:8590%
Storageperiod:maximum5daysforexport,38weeksfordomestic
Reefertransportationisusedforexport,temperatureismaintainedat1C.
InReefer(8MT)andnonReefertrucks(9MT)fordomesticmarket.
Precooling
Cold
Storage
Reefer
Transport
Others
After Precooling, cartons containing grapes are wrapped in polythene sheet along with
grapeguard(SO2releasingpads)forfungalcontrol.
PomegranateProcessflow:
Generally, pomegranate can be kept for 1-2 weeks in
ambient conditions, which can be increased up to 12
weeks if kept in cold chain. For export, it is necessary
to keep the produce in cold chain.
The process flow for pomegranate handled through the
cold chain in the pack house is shown in the diagram:
Technology
/Facilities
Grading &
Packaging
Precooling
Description
Cold
Storage
Reefer
Transport
Generallypackedincardboardboxes.
Fordomesticmarket,packedin4,5and10kgofCFBboxesandplasticcratesof20kgs.
Forexportmarkets,packedin4.5kgCFBboxes.
Precooledforexport.
ForcedAirmethodofprecoolingisused
Temp:5C,RH95%
PrecooledandgradedfruitsarekeptinColdStorages.
Temp:510C,RH:90%
Storageperiod:maximum1weekforexport,812weeksfordomestic
Reefertransportationisusedforexport;temperatureismaintainedat5oC.
AggregationMechanism
The pack house will establish direct relationship with farmers and provide extension and
training support to them for good farming practices, better post harvest handling practices,
efficient use of inputs and technology transfer etc. The pack house will develop its
aggregation mechanism and send trucks/pick-ups to the aggregation points. Farmers will be
encouraged to come together as producer companies, set up and manage aggregation points
63
FINAL REPORT
wherever possible. The pack house may also invest in developing infrastructure at
aggregation points such as platforms, sheds, etc.
PackHouseLogistics
The produce will come to the pack house from aggregation points and farms in various modes
of transport such as trucks (4 MT), vans, etc. Expected peak arrival of vehicles is about 38,
which would include following approximate number of vehicles;
Grapes / pomegranate: 12
Other commodities: 7
The above number would translate into six refrigerated out-going vehicles for fresh fruits
during the peak period. Outgoing vehicles for other commodities would depend on market
demand and duration of storage.
Small capacity field vehicles (load 800kgs to 1MT), have been incorporated in the project to
serve as feeders from local farms or aggregation points for backward integration. These
vehicles can have an insulated body deploying pre-cooled chill packs. It is expected that this
will increase field reach, and thereby enhance catchment range. Wherever possible, thermal
blankets may be used to cover the grapes when transporting them from field to pack house, to
provide protection from direct sunlight
7.2.2 Warehouse
Storage facilities have been considered for maize pulses and other cereal crops, since these
are also the major crops of the area. Capacity of the warehouse has been kept at 2000 MT.
The warehouses would plan for sufficient parking and eased traffic flow layout along with
waste disposal areas.
7.2.3 OtherFacilities
Apart from the above, following facilities are proposed in the pack house;
BusinessCentre
A business centre is proposed to house the administrative block for the market. There will
also be rooms/sections which may be rented out to reputed NGOs, companies, grass-root
level organizations such as microfinance institutions, etc as office spaces.
In addition to the above, the following are also proposed:

Canteen
Solid Waste Management Area
DG Room
Water Supply Facility
Parking Area
Utilities
64
FINAL REPORT
8 HUB:PIMPALGAONBASWANT
Pimpalgaon is an important existing market for tomato and onion. It is located at a distance of
about 35 km from Nashik on National Highway No. 3. The nearest railway stations are
Nashik Road (35 Kms) and Lasalgaon (30 km). It is also proximate to the existing Air and
Sea Cargo Centre and airport of Nashik, which is about 12 km from Pimpalgaon.
Pimpalgaon and surrounding areas are major producers of grape, tomato, onion and other
vegetables. Aggregation points may be located in either direction of Pimpalgaon in a radius
of 15-25 km to get sufficient quantities of fruit and vegetables mentioned above. Based on
several criteria, the proposed aggregation points for this hub, located 5 km from APMC in
Pimpalgaon, are given below, along with their approximate distance from the hub:
AggregationPoints
Palkhed
Vani
Vadalibhui
Karsul
ApproximateDistance(km)
15
25
22
7
As mentioned above, major fruits and vegetables grown in the catchment of Pimpalgaon are
grape, tomato, onion and other vegetables. Pimpalgaon is already serving as a hub for tomato
trade from Nashik region and is also a very big market for onion. Traders from all over the
country set up their shops during tomato and grape season and supply the produce to several
parts of the country.
The pack houses in Nashik have a cumulative capacity to process 1000-1200 MT of grapes
per day. While some of the larger pack houses such as Freshtrop have a handling capacity of
60 MT/batch, other pack houses handle 5 40 MT/batch. Hence the throughput of the hub
has been identified based on present production in the catchment, the existing capacities of
similar infrastructures/facilities, potential for interventions, financial viability of the proposed
infrastructure and stakeholders consultations.
Since onion is graded and packed at farm level itself, only storage facilities have been
proposed for onion; hence, throughput for onion grading and packing has not been estimated.
The estimated annual throughput of the hub in MT is as follows:
Spoke
Grape
Pimpalgaon
Tomato
10000
OtherVegetables
2000
5000
season as follows:
Crops
Jan
Feb
Mar
Apr
Grape
Tomato
Other
Vegetables
May
Jun
Jul

Aug
Sep
Oct
Nov
Dec
65
FINAL REPORT
As shown above, the facility would receive year-round supply of fresh fruit and vegetables
ensuring capacity utilization of the pack house throughout the year.
Facilities have been designed based on the requirements of the identified focus crops, to
induce better and efficient handling practices and faster evacuation of fresh produce to the
consumption markets, to ensure better quality to the consumer. While deciding on the
capacities, existing facilities, their capacities and utilization has also been taken into account.
The proposed new facilities are as follows:
8.2.1 PackHouse
The pack house shall have cold chain infrastructure for handling grapes, which is a high value
crop and is economically viable to keep in the cold chain. It is assumed that the entire
quantity of grape arriving at the pack house will go through the cold chain.
The cold infrastructure has been designed to process and pack 60 MT of produce per day.
Facility design complies with EHS regulations and provides segregated amenities by gender.
The sub components of the pack house are described in the following sections.
ColdChain:
infrastructure are proposed for grape

equipment.
to lean periods and to allow faster batch process from line to cooling. Large precoolers of 10MT would imply a longer wait for batch preparation reducing flexibility
in low volume periods.
66
FINAL REPORT

Laboratory for testing pesticide residue and quality parameter control.
It is expected that the cold chain facility will employ a minimum of 170 persons for handling
this volume.
GrapeProcessflow:
Shelf life of grape at room temperature is about 7-8 days, which can be increased upto 6-8
weeks if kept in cold chain. Cold chain technology intervention would extend shelf life and
produce quality and hence extend the season of grape. Price realization is better during off
season due to limited availability.
The process flow for grape handled through cold chain in the pack house is shown in the
diagram:
Technology/
Facilities
Grading
&
Packaging
Precooling
Description
Generallypackedincardboardboxes(910kg),panets(9kg)orpouches(4or5kg)for
exportmarkets.
Temp:12C,RH80to85%
ColdStorage
Temp:1C,RH:8590%
Reefer
Transport
Others
Reefertransportationisusedforexport,temperatureismaintainedat1oC.
AfterPrecooling,cartonscontaininggrapesarewrappedinpolythenesheetalongwith
Bulk storage is recommended closer to consumption markets thus the last leg of transport to
retail centres is at a minimal.
8.2.2 PackShedAmbient
An ambient pack shed is proposed to be setup adjoining the cold chain infrastructure. The
ambient infrastructure will cater to tomato and other vegetables, since margins in these crops
are relatively low. Also, tomato and other vegetables are grown all over the country and
additional cost incurred on cold chain makes the produce non-competitive in distant markets.
The ambient pack shed has been designed to handle 50 MT of produce per day. The sub
components of the pack shed are as listed below;
Covered Pack shed (open to ambient) with landing area.

Requisite weighing equipment and transaction recording arrangement.
Sorting and grading areas (with tables).
Packaging store and Packing tables.
Waste disposal systems (common to both cold chain and ambient).
Vehicle parking areas (common to both cold chain and ambient).
Crate washing system (common to both cold chain and ambient).
67
FINAL REPORT
ProcessflowinPackShed:
Process flow for the produce handled in the pack shed shall be as depicted below:
The hub will establish direct relationship with farmers and provide extension and training
support to them for best farming practices, better post harvest handling practices, efficient use
of inputs and technology transfer etc. The hub will develop aggregation mechanism and send
trucks/pick-ups to the aggregation points as well as to other spokes. Farmers will be
encouraged to come together as producer companies and set up and manage aggregation
points wherever possible. The spoke may also invest in developing infrastructure at
Logistics
The produce will come to the hub from various spokes, aggregation points and farms in
various modes of transport such as trucks (4 MT), vans, etc. Expected peak arrival of vehicles
is about 46, which would include following approximate number of vehicles;
Grapes: 12
Banana: 1
Tomato & other vegetables: 16
Onion: 10
The above numbers add up to 12 out-going vehicles in the peak period of which, six
refrigerated vehicles would be utilized for grape transportation
Small capacity field vehicles (load 800kgs to 1MT), are incorporated in the project to serve as
feeders from local farms or aggregation points as backward integration. These vehicles can be
with insulated body deploying pre-cooled chill packs. This is anticipated to increase field
reach, hence enhancing catchment range. Wherever possible, thermal blankets may be used to
cover the grapes during transport from field to pack-house, to provide protection from direct
sunlight.
8.2.3 BananaRipeningFacility
A banana ripening facility is proposed in the hub. Capacity of the ripening chamber will be
10 MT per day. The ripening chamber can also be used for other fruits such as mango, if
required. Ripening would be done using ethylene as the catalyst (see Annexure for technical
details). Ethylene generators would be utilised for appropriate dosing of the catalyst.
68
FINAL REPORT
The Banana ripening facility could adjoin a separate receiving and de-handing shed to allow
for locally sourced direct farm produce to be input for local ripening requirements. A waste
disposal area to cater to ripening room is specially designated.
Material handling pallet mover is provided for the daily operations. The receiving shed is
covered to protect from direct sunlight and weather. Though only one chamber will output
daily, sufficient space is provided to cater for dispatch staging as well as incoming
marshalling of the produce.
The ripening facility is envisaged to output into smaller vehicles for tertiary dispatch and a
separate designated parking lot for the same is designed.
8.2.4 AmbientOnionStores
Separate facilities for onion storage are proposed to be part of the facility. Onion stores of
2000 MT capacities would be set up. This would be kept as a separate section in the facility
to prevent odour contamination in other areas.
These storehouses would be constructed as per existing guidelines for storage of dry onions,
incorporating enclosures that allow ventilation while protecting from overhead inclement
weather. The roof would be extended to protect from driving rain while protecting from direct
sunlight, boundary walls of mesh material protecting the produce from rodents while
allowing adequate ventilation. The base platform would be raised to truck bed height easing
loading and unloading operations.
8.2.5 DryWarehouse
Storage facilities have been considered for maize and other cereal crops, since these are also
the major crops of the area. A dry warehouse of 10000 MT capacity is also proposed. It will
used for storage of grains such as rice, wheat, maize or other commodities.
8.2.6 ColdStore
A multi commodity cold store of 5000 MT is also proposed to store resins, fruits and
vegetables, chillies etc.
BusinessCentre
Business Centre is proposed to house the administrative block for the market. There will also
be rooms/sections which may be rented out to reputed NGOs, companies, grass-root level
organizations such as microfinance institutions, etc as office spaces.
69
FINAL REPORT
KnowledgeCentre
A Knowledge Centre is also proposed in the hub. This space will be utilized for extension
services provided to the farmers, traders, aggregators and others in the catchment area. There
will also be rooms for trainings, meetings and conferences which will be rented out. There
will be demonstration rooms displaying various modern technologies and best practices in
agri-business.
Other facilities proposed here are:
Guest House
Canteen
DG Room
Parking Area
Utilities
70
FINAL REPORT
9 SPOKE:SINNAR
The proposed spoke at this location is 28 Kms from Sinnar APMC. Of this connection, an 8
km stretch is a village road
Major fruits and vegetables grown in the catchment of Sinnar are grape, tomato, cabbage,
cauliflower and other vegetables. Vegetables and grape are already being sent to all over the
country from Nashik. Grape and vegetables are also exported to Middle East and European
countries. At present, Nashik APMC is the major aggregation and dispatch point for
vegetables produced in the area, whereas fruits are directly sourced from the farms by the
traders.
Focus crops for the proposed facility in Sinnar are grape, tomato and other vegetables. As
mentioned earlier, Nashik district has 84 APEDA recognized pack houses, which are mainly
used for export of grapes. About 7-8 of these pack houses have big cold storage facilities i.e.
2000 MT or above, while others have only about 50-150 MT cold storage capacity. The pack
houses in Nashik have a cumulative capacity to process 1000-1200 MT of grapes per day.
While some of the larger pack houses such as Freshtrop have a handling capacity of 60
MT/batch, other pack houses handle 5 40 MT/batch. Hence the throughput of the spoke has
been designed taking into account the present production in the catchment area, potential for
interventions, financial viability of the proposed infrastructure and stakeholders
consultations.
The estimated annual throughput of the spoke in MT is as follows:
Spoke
Grape
Sinnar
Tomato
5000
OtherVegetables
4000
5000
season as follows:
Crops
Jan
Feb
Mar
Apr
Grape
Tomato
Other
Vegetables
May Jun
Jul

Aug
Sep
Oct
Nov
Dec
As shown above, the facility would receive year round supply of fresh fruit and vegetables
and hence, capacity utilization of the facilities would be ensured throughout the year.
9.1.1 PackHouse
The pack house shall have cold chain infrastructure for handling grapes, which is a high value
crop and is economically viable to keep in the cold chain. It is assumed that the entire
quantity of grape arriving at the pack house will go through the cold chain.
71
FINAL REPORT
The cold infrastructure has been designed to process and pack 60 MT of produce per day.
Facility design complies with EHS regulations and provides segregated amenities by gender.
The sub components of the pack house are described in the following sections.
ColdChain:
As described earlier, the facilities are modular in nature, four modules of cold chain
infrastructure are proposed for grape
Receiving and holding area.

equipment.
Buffer Store (ante room) holding area for 45 pallets pending pre-cooling.
pre-cooled daily through these pre-coolers. Pre-cooler size of 5Mt selected to cater to
lean periods and to allow faster batch process from line to cooling. Large pre-coolers
of 10MT would imply a longer wait for batch preparation and would reduce
this volume.
GrapeProcessflow:
Shelf life of grape at room temperature is about 7-8
days, which can be increased upto 6-8 weeks if kept in
cold chain. Cold chain technology intervention would
extend shelf life and produce quality and hence extend
the season of grape. Price realization is better during off
season due to limited availability.
The process flow for grape handled through cold chain
in the pack house is illustrated:
72
Technology
/Facilities
Grading&
Packaging
Precooling
Cold
Storage
Reefer
Transport
Others
FINAL REPORT
Description
Generally packed in cardboard boxes (9 10 kg), panets (9 kg) or pouches (4 or 5 kg) for
exportmarkets.
Temp:12C,RH80to85%
Temp:1C,RH:8590%
Reefertransportationisusedforexport,temperatureissetfor1oC.
After Precooling, cartons containing grapes are wrapped in polythene sheet along with
Bulk storage is recommended closer to consumption markets and thus

transport to retail centres is at a minimal.
the last leg of
9.1.2 PackShedAmbient
The ambient infrastructure will cater to tomato and other vegetables, since margins in these
crops are relatively low. Also, tomato and other vegetables are grown all over the country and
additional cost incurred on cold chain makes the produce non-competitive in distant markets.
The ambient pack shed has been designed to handle 50 MT of produce per day. The sub
components of the pack shed are as listed below;

Waste disposal systems (common to both cold chain and ambient).
Vehicle parking areas (common to both cold chain and ambient).
Crate washing system (common to both cold chain and ambient).
ProcessflowinPackShed:
Process flow for the produce handled in the pack shed shall be as depicted below:
73
FINAL REPORT
The pack house/pack shed will establish direct relationship with farmers and provide
extension and training support to them for best farming practices, better post harvest handling
practices, efficient use of inputs and technology transfer etc. The pack house/pack shed will
develop aggregation mechanism and send trucks/pick-ups to the aggregation points. Farmers
will be encouraged to come together as producer companies and set up and manage
aggregation points wherever possible. Pack house/pack shed may also invest in developing
infrastructure at aggregation points such as platforms, sheds, etc.
Logistics
The produce will come to the spoke from aggregation points and farms in various modes of
transport such as trucks (4 MT), vans, etc. Expected peak arrival of vehicles is about 38,
Grapes: 12
Tomato & other vegetables: 16
Onion: 10
The above number would translate into 12 out-going vehicles at peak, of which 6 vehicles
would be refrigerated and would be utilized for grape transportation
Small capacity field vehicles, load 800kgs to 1MT, are incorporated in the project to serve as
with insulated body deploying pre-cooled chill packs. This is foreseen to increase field reach,
hence enhancing catchment range. Wherever possible, thermal blankets can be used to cover
the grapes when travelling from field to pack-house, providing protection from direct
sunlight.
9.1.3 AmbientOnionStores
Separate facilities for onion storage are proposed to be part of the facility. Onion stores of
500 MT capacities would be set up. This would be kept as a separate section in the facility to
prevent odour contamination in other areas.
allowing adequate ventilation. The base platform would be raised to truck-bed height easing
Apart from the above, following facilities are proposed in the spoke;
74
FINAL REPORT
BusinessCentre
Canteen
DG Room
Parking Area
Utilities
75
FINAL REPORT
10 SPOKE:CHANDWAD
The identified location for this spoke is within Chandwad town, at the main market.
Onion, guava and sapota are the major focus crops grown in the catchment of Chandwad
spoke. Since all the crops mentioned here are low value crops with low trade margins, it
would not be economically viable to put these crops through cold chain infrastructure. Hence,
an ambient pack house is suggested to be established at Chandwad .
Estimated throughputs have been identified based on present production in the catchment
area, the present capacities of existing similar infrastructures/facilities, potential for
interventions, financial viability and stakeholders consultations (see value chain analysis).
Onion is graded and packed at farm level itself, only storage facilities have been proposed for
onion; hence, throughput for onion grading and packing has not been estimated.
season as follows:
Crops
Jan
Feb
Mar
Apr
Guava
Sapota
May Jun
Jul

Aug
Sep
Oct
Nov
Dec
The seasonality chart shows that the pack shed at Chandwad shall remain occupied round the
year. Guava is harvested from November to May and Sapota is harvested round the year. The
facility may also cater to vegetables for the local market.
Facilities have been designed on the basis of requirement of the focus crops. As none of the
focus crops makes it a viable proposition to be treated into cold chain infrastructure, focus
has been laid on better and efficient methods of handling and quicker evacuation to the
consumption markets. Since there are no facilities already existing for these crops in the
region, the pack house would also serve as a pilot for many more such initiatives. The facility
would provide segregated amenities by gender and working zones. The proposed facilities
are as follows:
76
FINAL REPORT
10.2.1 PackHouse
An ambient pack house has been designed to handle 50 MT of produce per day. The sub
components of the pack house are as listed below;
Sorting and Grading facilities

Weighing area certified weighing machines.
ProcessflowinPackHouse:
Process flow for the produce handled in the pack house shall be as depicted below:
Technology/
Facilities
QualityCheck
Sorting and
Grading
Packing
Dispatch
Description
Qualityofthefarmproducesshallbeassessedatthepackhousebasedoncertaincriteria
suchasmaturitylevel,sizeoffruitsetc.
Manualsortingandgradingissuggested,whichiscosteffective.
Sortingandgradingtablesareproposedinthepackshed.
Packagingtableswouldbeprovidedformanualpackingofguavaandsapota.
Packaging material used at the pack house would depend on the requirements of the
destinationmarkets.PerforatedpolybagsandCFBboxesshallbepromoted.
Appropriatepackingmaterialstoreforstreamlinedmaterialflow.
Thesameareawouldbeoffloadedonadailybasis.
Thepackagedproducewouldbestagedontheraisedplatform.
Produceisexpectedbetransportedintrucksof1016MTcapacity.
Guava can be stored for about 10 days at room temperature (180-230 C) in perforated
polybags. This fact is especially important when handling winter fruit as ambient
temperatures can be taken advantage of. As Guava is susceptible to moisture loss and
associated weight loss, the perforated bags trap moisture while still allowing the fruit to
breathe and allowing respiratory heat to dissipate.
While the shelf life can be extended upto 20 days by keeping them at low temperature of 50 C
and 75-85% relative humidity, following of basic packaging guidelines will be sufficient to
extend reach of the produce. For distant markets, wooden or corrugated fibre board boxes
with cushioning materials viz. paddy straw, dry grass, guava leaves or rough paper also helps
77
FINAL REPORT
in keeping the fruit safe. Given the current market backdrop, no immediate cold chain
application is proposed.
Sapota is a tropical crop and needs warm (10-38 C) and humid climate (70% RH) for growth
and can be cultivated throughout the year. Coastal climate is best suited for its cultivation.
This fruit is highly perishable but with careful handling can be stored in ordinary conditions
for 7-8 days period after harvesting. At a storage temperature of 15 C, the shelf life can be
increased for a period of 15-20 days. Storage can be further enhanced to 21-25 days by
removing ethylene and adding 5-10% CO2 to the storage atmosphere. Yet, in current market
dynamics, the associated costs (capital and operating energy expense) are not considered
viable.
Due to annual availability of the fruit, it fetches minimal domestic price and hence refined
handling practices alone are suggested to suffice suitable quality enhancement. The produce
must be packaged in stiff bodied cartons or crates and cushioning materials can be
interspersed with ethylene absorbents for transport and presale storage.
The spoke will establish direct relationship with farmers and provide extension and training
support to them for best farming practices, better post harvest handling practices, efficient use
of inputs and technology transfer etc. The spoke will develop aggregation mechanism and
send trucks/pick-ups to the aggregation points. Farmers will be encouraged to come together
as producer companies and set up and manage aggregation points wherever possible. The
spoke may also invest in developing infrastructure at aggregation points such as platforms,
sheds, etc.
Logistics
The produce will come to the spoke from aggregation points and farms in various modes of
transport such as trucks (4 MT), vans, etc. Expected peak arrival of vehicles is about 26,
Guava / Sapota: 16
Onion: 10
Estimated peak outgoing number of vehicles is 6 trucks per day. No reefer transport has been
proposed in the spoke as no cold-chain application is foreseen as produce currently lacks
export business linkages.
Small capacity field vehicles, load 800 kgs to 1MT, are incorporated in the project to serve as
feeders from local farms or aggregation points as backward integration
10.2.2 OnionStorage
Storage facility for onion has been provided at the facility. Capacity of onion storage has
been kept to be 500 MT. This would be kept as a separate section in the facility to prevent
odour contamination in other areas.
78
FINAL REPORT
BusinessCentre
Canteen
DG Room
Parking Area
Utilities
79
FINAL REPORT
11 SPOKE:SANGAMNER
Sangamner has been identified as spoke for the Nashik Integrated Value Chain. It has been
identified as spoke because its major production centre as well as marketing hub of tomato,
other vegetables and onion. Sanagamner and the adjoining taluk Akole, which is around 30
km from Sangamner, together accounts for more than 16% of onion production of the district
Sangamner has established trade linkages with major consumption markets such as Mumbai,
Delhi, Bhubaneswar, Chandigarh, Andhra Pradesh etc and truck loads of tomatoes and onions
are sent to these places.
Sangamner is well connected by road to production centres and the nearest rail head, which is
around 55km away, is at Shrirampur. NH 50 passes through Sangamner, which connects
Pune to Nashik. SH 44 connects Sangamner to the adjoining taluks Akole as well as
Srirampur.
The aggregation points identified for the proposed spoke at Sangamner are:
AggregationPoints
DistancefromthespokeinKms
NandurShingote
20
Talegaon
25
NimbgaonJali
20
Akole
30
As evident from above, the aggregation points are located within a radius of 30 km from the
proposed spoke at Sangamner. This would ensure that the produce reaches the spoke within
1-2 hours after harvest.
As mentioned earlier, major crops cultivated in the catchments of the proposed spoke are
tomatoes, onion, vegetables such as pea, brinjal, cabbage, carrot, cucumber etc. The focus
crops and estimated throughputs of the spoke have been identified based on the present
production in the catchment areas, financial viability of the proposed infrastructure, potential
for interventions and stakeholders consultations. The estimated annual throughput of the
spoke in MT shall be as follows:
Spoke
Tomato
Sangamner
Onion
2000
Pomegranate
Vegetables
500
5000
2000
The arrival pattern of the focus crops at the ambient pack shed shall be as follows:
Jan
Tomato
Feb
Mar
Apr
May Jun
Onion
Vegetables
Jul
Aug
Sep
Oct
Nov
Dec
The arrival pattern shows that there will be round the year availability of produce for the pack
shed, which would ensure its operational efficiency and thereby maximize capacity
utilization.
80
FINAL REPORT
The facilities at the spoke have been designed to bring synergy with the existing supply chain
of farm produces grown in the catchments of the spoke. As the focus crops are onion,
tomatoes and vegetables, which are currently handled through the ambient supply chain,
hence the facilities proposed at the spoke are ambient only. Also, tomato and vegetables are
grown all over the country and hence introduction of cold chain infrastructure for these crops
would render them non-competitive in distant markets. The capacity has been planned to
target an introductory and viable volume of the two produce types.
Facility design caters and complies with EHS regulations and provides segregated amenities
by gender and working zones.
11.2.1 PackHouse
The pack house shall have cold chain infrastructure for handling grape and pomegranate. It is
assumed that 100% quantity of grape and pomegranate arriving at pack house shall go
through the cold chain.
The infrastructure has been designed to process and pack 60 MT of produce per day. Facility
design complies with EHS regulations and provides segregated amenities by gender. The sub
components of the pack house are described in the following sections.
infrastructure are proposed

equipment.

to lean periods and to allow faster batch process from line to cooling. Large precoolers of 10MT would imply a longer wait for batch preparation and would reduce

81
FINAL REPORT
this volume.
PomegranateProcessflow:
Generally, pomegranate can be kept for 1-2 weeks in
ambient conditions, which can be increased up to 12
weeks if kept in cold chain. For export, it is necessary
to keep the produce in cold chain.
The process flow for pomegranate handled through the
cold chain in the pack house is shown in the diagram:
Technology
/Facilities
Grading &
Packaging
Precooling
Description
Cold
Storage
Reefer
Transport
Generallypackedincardboardboxes.
Fordomesticmarket,packedin4,5and10kgofCFBboxesandplasticcratesof20kgs.
Forexportmarkets,packedin4.5kgCFBboxes.
Precooledforexport.
ForcedAirmethodofprecoolingisused
Temp:5C,RH95%
PrecooledandgradedfruitsarekeptinColdStorages.
Temp:510C,RH:90%
Storageperiod:maximum1weekforexport,812weeksfordomestic
Reefertransportationisusedforexport;temperatureismaintainedat5oC.
training support to them for good farming practices, better post harvest handling practices,
efficient use of inputs and technology transfer etc. The pack house will develop its
encouraged to come together as producer companies, set up and manage aggregation points
wherever possible. The pack house may also invest in developing infrastructure at
PackHouseLogistics
of transport such as trucks (4 MT), vans, etc. Expected peak arrival of vehicles is about 38,
Grapes / pomegranate: 12
82
FINAL REPORT
The above number would translate into six refrigerated out-going vehicles for fresh fruits
during the peak period. Outgoing vehicles for other commodities would depend on market
demand and duration of storage.
Small capacity field vehicles (load 800kgs to 1MT), have been incorporated in the project to
serve as feeders from local farms or aggregation points for backward integration. These
vehicles can have an insulated body deploying pre-cooled chill packs. It is expected that this
will increase field reach, and thereby enhance catchment range. Wherever possible, thermal
blankets may be used to cover the grapes when transporting them from field to pack house, to
provide protection from direct sunlight
11.2.2 AmbientPackShed
An ambient pack shed is proposed to be set up at the spoke for handling of tomato and
vegetables. The handling capacity of the pack shed will be 50 TPD. In the ambient handling
yard, following infrastructure will be provided:

Vehicle parking area.
AmbientPackShedProcessflow:
The process flow of the produces handled in the pack shed is shown below:
Facilities
Quality Check
Sorting& Grading
Packing
Dispatch
Description
Qualityoftomatoesandvegetablesshallbeassessedatthepackshed.
Packaging tables would be provided in the pack sheds for manual packing of
tomatoesandvegetablesinboxes/cratesetc.
Appropriatepackingmaterialstoreforstreamlinedmaterialflow.
Produceisexpectedbetransportedintrucksof1016MTcapacity.
The pack shed will aggregate material from various aggregation points mentioned earlier as
well as procure directly from the farms. As the aggregation points are located in radius of 30
83
FINAL REPORT
km from the proposed spoke, trucks/pick up vans would be used to collect farm produces
from the points of aggregation. The pack shed owner will also establish direct relationship
with farmers and provide extension and training support to them. This would ensure assured
supply of raw material to the pack shed and assured market for the farmers.
Logistics
The produce will come to the spoke in various modes of transport such as auto rickshaw, vans
and mini trucks etc. It is assumed that around 16 vehicles will bring the tomatoes and
vegetables to the pack sheds. As mentioned earlier, the produce may come to the pack shed
from various aggregation points as well as directly from the farms. The outbound logistics for
the pack shed would be approximately 6 trucks of 10 MT capacities.
11.2.3 OnionStore
10 onion stores of 50MT capacities each are proposed in the spoke. The onion storage
structures would be a separate section of the spoke facility to check odour contamination.
Since onion is graded and packed at farm level itself, only a storage facility is provided.
BusinessCentre
A Business Centre is proposed in the spoke that would accommodate administrative unit as
well as provide space for other offices.
The centre will incorporate bank, post office and other office support services. A common
testing lab can also be included in the business centre. Local district level government offices
will also ensure utility and regular interaction at location. These could include local passport
offices, tax centre, land records office, family planning centre, etc.
Apart from the above facilities, other amenities proposed in the spoke are:
Parking Area
Canteen
Weigh Bridge
Water Supply Facilities
DG Rooms
Other Amenities
84
FINAL REPORT
12 SPOKES(BANANA):ANTURLI,PADALASA,KAJGAON,GALANGI
The district of Jalgaon has been divided into three clusters based on the production estimates
of banana, existing market linkages and operational and logistics aspects of the proposed
facilities. In these three clusters, four spokes have been identified at Anturli, Padalasa,
Galangi and Kajgaon.
Details of each spokes along with respective aggregation points are provided below:
12.1 FOCUSCROPSANDESTIMATEDTHROUGHPUTBYCLUSTER:
12.1.1 ClusterI
Raver taluka is the most prominent banana cluster and accounts for about 52 percent of
districts and 36 percent of States total production of Banana. Total area under Banana in the
cluster is estimated at about 29000 Ha with a total production of 1.76 mn tonnes. On the basis
of production base and area spread, two spokes are proposed be set up in the cluster at Vivra
and Chinnawal. The details of each spoke and respective aggregation points are as follows.
SpokeI:Anturli
Anturli is located in Raver taluka of Jalgaon district. It is 4 Kms off Barhampur Road . The
spoke will be fed by aggregation points spread in a radius of about 25 km from Anturli. The
annual throughput at the spoke would be about 10000 MT of Banana.
12.1.2 ClusterII
The cluster comprises of Chopda and Yawal taluka and accounts for about 23 percent of
districts total production and about 16 percent of States total production of Banana. This is
85
FINAL REPORT
the second largest cluster followed by Raver in terms of production. The total area under
Banana in the cluster is estimated at about 13000 Ha with a total production of 780 thousand
tones. The cluster is located along Burhanpur-Ankleshwar highway which further connects to
National Highway-3 at Shirpur which is about 50 km from Chopda. The details of spoke are
as follows.
SpokeI:Padalasa
Padalasa is located in Yawal taluka of Jalgaon district. It is located along BhusawalBurhanpur state highway and is well connected to other villages in taluka. It is proposed to
set up seven mobile collection centres in Yawal taluka and eight mobile collection centres in
Chopda which shall cater to proposed pack house at Padalasa. These aggregation points are
spread in a radius of 30-35 km from Padalasa.
The estimated annual throughput of the pack house is estimated to be about 10000 MT.
SpokeII:Galangi
Galangi is located in CHopada taluka of Jalgaon district. It is well connected to other
villages and is located close to Ankleshwar-Burhanpur state highway. It is proposed to set up
seven mobile collection centres which shall cater to proposed pack house at Galangi. These
aggregation points are spread in a radius of 30-35 km from Galangi.
The estimated annual throughput of the pack house in MT is expected to be about 10000 MT.
12.1.3 ClusterIII
The cluster comprises of Pachora and Bhadgaon taluka and accounts for about 7 percent of
districts total production and about 5 percent of States total production of Banana. This is
the third largest cluster in Jalgaon in terms of production. The total area under Banana in the
cluster is estimated at about 4000 Ha with a total production of 0.24 mn tonnes. The cluster is
located at about 30 km from national highway-6 (Mumbai-Nagpur) and 75 km from national
highway-3 (Mumbai-Agra) which provides connectivity to potential consumption markets.
Spoke:Kajgaon
Kajgaon is located in Bhadgaon taluka of Jalgaon district. It is well connected to other
villages and is located close to national highway-6 (Mumbai-Nagpur) and national highway-3
(Mumbai-Agra) which provides connectivity to potential major markets. It is proposed to set
up seven mobile collection centres in Bhadgaon taluka and eight mobile collection centres in
Pachora taluka which shall cater to proposed pack house at Bhadgaon. These aggregation
points are spread in a radius of 50 km from Bhadgaon. The details of spoke and respective
aggregation points are outlined below.
Cluster
III
Spokes
AggregationPoints
Crop
Kajgaon
TalukaBhadgaon:Bhadgaon,Pandhard,Nimbora,
Bodhardi,Korgaon,Gondgaon,Tandulwadi
Banana
TalukaPachora:Khajola,Pimpri,Vadgaon,Mulane,
Nagardevla,Tarkheda,Kinni,Lohtar
Targetable Volume
forSpoke(MT)
8000
Seasonality of production of Banana in all three clusters is as follows:

86
Spokes
Jan
Feb
Mar
Apr
Anturli
Padalasa
Galangi
Kajgaon
Lean
Peak
May
Jun
Jul
Aug
Oct
Nov
Dec
Sep
FINAL REPORT
The seasonality of production confirms round-the-year availability of produce which would

ensure maximum capacity utilization of proposed facilities at the pack house.
It is proposed to set up a banana pack house at each spoke. Facilities have been designed on
the basis of requirement of the crop, to induce better and efficient handling practices and
faster evacuation of fresh produce to the consumption markets so as to ensure better quality to
the consumer. While deciding on the capacities, existing facilities, their capacities and
utilization has also been taken into account. Details of proposed facilities are as follows:
12.2.1 PackHouse
A pack house with a capacity of 50 MT per day is proposed at each of the spokes. Various
components of proposed facilities in the pack house are outlined below.
3
5
5
5
1
5
5
1.
2.
3.
4.
5.
6.
7.
8.
Receiving De-handing Area

Preliminary Wash Tank
Secondary Flotation Tank
Air Brush, Weighing
Retail Packing, Stickers
Box inspection
Palletisation Area
Dispatch direct or mobile pre- cooler
It is expected that such a facility would employ 165 workers over two shifts. The process
flow of material handling at the pack house is outlined below.
Banana incoming in bunches or as pre-cut clusters from farms/aggregation points.

Bunches are cut into hands and crown flower removed.
Treatment of hands in preliminary wash tank to eliminates field dirt, latex overruns
and pesticide residue.
Secondary wash tank; fungicide wash is affected- Before treatment in secondary
tanks, each bunch is cut into packing clusters and inspected.
87
FINAL REPORT
At end of secondary wash, bananas shall be placed into trays onto roller conveyors.Each tray is weighed and holds a packing unit load.
As it moves down the conveyor, material shall be air dried, and stumps can be sealed
with paraffin wax.
Thereafter the box packing takes place and palletisation and subsequent staging is
done.
A separate box making room is provided where boxes are formed from collapsed
cardboard.
Diagrammatic representation of process flow is depicted in the picture below.

As banana pack house utilizes
water as transport mode (design
pack house uses 50,000 ltrs daily),
appropriate water treatment and
recharge systems are incorporated.
The recycled/treated water can be
used for sanitary purposes or
stored for field irrigation uses.
To introduce cable conveyor
system, the receiving area would
incorporate a rotating cable array. Here the hands would be unloaded and suspended from the
cable, leading to the de-handing workers. The stake is returned on cable for subsequent
disposal. Organic waste can be returned to banana fields to be converted to humus.
A separate passage bypassing the wash tanks is provided, for pre-selected produce that
directly leads to weighing and packaging area.
Technology
/Facilities
Packaging
Ripening
Storage
Transport
Description
Postharvesthandlingfacilityforqualitycheckandwash.
SortingandgradingOnthebasisoffingerlength,shape,color,etc.
Retailpackage(branded)orunitizedtransportunitsareformed.
Receivedinsmallunitizedretailpacksfrompackhouse.
Ripeningtemperatureis15C20Cwith9095%RH).
Ethyleneisgeneratedintheroomtogiveuniformripening.
Bananastorageisatatemperatureof13C14Cforamaximumof3weeksinethylene
freeair.
CAstorageispracticedforaddedshelflifeupto6weeksat14C.
For domestic purpose, transportation through both modes 80% by rail wagons and rest
20%isthroughroadinnormaltrucks(89MT).
Forexport,Reefercontainersareusedforseatransportation.
PackHouseLogistics
of transport such as trucks (4-5 MT), vans, etc. Expected peak arrival of vehicles is about 10
to 12. Typically banana would be pre-cooled only for exports and that too in transit
containers. Where bananas are for domestic consumption, they would move to destination
ripening centres. Where bananas are meant for local consumption, they would move directly
to ripening chambers at spokes.
88
FINAL REPORT
The pack house will establish direct relationship with farmers in the catchment area and shall
facilitate extension and training support to them for best farming practices, post harvest
handling practices, efficient use of inputs and technology transfer etc. The pack house will
develop aggregation mechanism and send mobile collection vans to the aggregation points. In
addition, farmers in the catchment area of spoke will be encouraged to come together to form
producer companies and set up and manage aggregation points wherever possible. Pack house
may also invest in developing infrastructure at aggregation points such as platforms, sheds etc
A banana ripening facility is proposed. Capacity of the ripening chamber will be 10 MT per
day. The ripening chamber can also be used for other fruits such as mango, if required.
Ripening would be done using ethylene as the catalyst (see Annexure for further technical
details). Ethylene generators would be utilized for appropriate dosing of the catalyst.
Where ripening facility is located adjoining the pack house, conveyor rollers are optioned to
carry the crates directly to ripening area.
BusinessCentre
A Business Centre is proposed in the spoke that would accommodate administrative unit as
well as provide space for other offices.
The centre will incorporate bank, post office and other office support services. A common
testing lab can also be included in the business centre. Local district level government offices
will also ensure utility and regular interaction at location. These could include local passport
offices, tax centre, land records office, family planning centre, etc.
Apart from the above facilities, other amenities proposed in the spoke are:
Parking Area
Canteen
Weigh Bridge
DG Rooms
Other Amenities
89
FINAL REPORT
13 FINANCIALANALYSIS
This chapter contains details of project cost, funding mechanism, projected revenue,
assumptions underlying project cost and revenue projections and analysis of financial
viability of the projects. The project cost details are based on detailed value chain analysis
and market assessment as given in the previous chapters. The costs for external support
infrastructure like roads and power and water supply, if required for the locations, have not
been included in the cost estimates.
13.1 IVCSINMAHARASHTRA
The IVC projects in Maharashtra would create facilities like dry warehouses, cold packhouses
(with pre-cooling and cold store facilities), ambient packhouses and ripening facilities to cater
to the need of wholesalers, organized retailers and exporters. These facilities will be leased
out to various users on rental basis. While most of these facilities would be leased out on
monthly rental basis, for some other facilities it may be done on job work basis. The lands for
the facilities have not been identified and the areas assumed for the hub and spokes are
indicative and conceptual.
The details related to two selected IVCs in Maharashtra are given below:
13.2 NASHIKIVC
13.2.1 ProjectDetails
Warehouse
ColdStore
Grape/
Pomegrana
te
Packhouse
ColdChain
10000
MT
(4600)
5000
MT
(2700)
60
MT/day
(2400)
Galangi
Kajgaon
Padalasa
Anturli
Chandwad
Deola
Sangamner
Facilities
Sinnar
Pimpalgaon
The facilities/infrastructure proposed in the hub and spokes for the IVC and its handling
capacities as well as area (in sq meters) are summarized below:
2000
MT
(920)
60
MT/day
(2400)
60
MT/day
(2400)
60
MT/day
(2400)
50
MT/D
ay
(1350)
10
MT/
50
MT/Day
(1350)
10
MT/Day
Banana
Packhouse
50
MT/Day
(1350)
Ripening
Chamber
10
MT/Day
10
MT/Day
50
MT/Day
(1350)
10
MT/Day
90
(527)
50
MT/day
(500)
2000
MT
(2180)
Vegetable
Packshed
Ambient
Onion
Store
FINAL REPORT
(527)
Day
(527)
(527)
(527)
50
MT/day
(500)
50
MT/day
(500)
50
MT/day
(500)
500MT
(540)
500MT
(540)
500MT
(540)
Knowledg
ecentre
Business
centre
Guest
house
Power
Supply
Water
Supply
Canteen
Galangi
Kajgaon
Padalasa
Anturli
Chandwad
Sangamner
Deola
Facilities
Sinnar
Pimpalgaon
To support the operations of above facilities, the spokes will also have adequate basic
infrastructure and other support infrastructure like power and water supply systems, ETP,
solid waste disposal facility, administration block/business centre, canteen, parking space,
etc. A list of these basic and support infrastructure facilities (hub and spoke wise) is given
below:
400sqm
300sqm
300sqm
300sqm
300sqm
300sqm
300sqm
300
sqm
300
sqm
300
sqm
450KVA
450KVA
90KVA
230
KVA
230
KVA
13300LPD
12700
LPD
13000LPD
64400
LPD
64400
LPD
100 sq.
m
100 sq.
m
810 sq.
m
810 sq.
m
300sqm
1500
KVA
35250
LPD
300 sq. 100sq.m

m
2025 sq. 1215sq.m
m
100 sq.
m
100sq.m
1215 sq.
m
1620sq.m
Parking
230
KVA
6440
13000
64400
0
LPD
LPD
LPD
100sq.m 100 sq. 100
m
sq.
m
1620 sq. 810 sq. 810
m
m
sq.
m
90KVA
230KVA
13.2.2 ProjectCost
The cost estimates of plant and machinery are based on the information obtained from
equipment suppliers including quotations given by them for similar facilities. The civil work
and basic infrastructure costs have been worked out by architects/engineers based on layout
plans and as per the industry standards. Finally, the costs of land and land development have
been assessed mainly based on interactions with industry/stakeholders in the identified
locations. The component wise costs of the project are given below:
Items Sr.No. Description
Land
A
1
Amount
RsMillion
Amount
Million$
0.00
0.00
LandDevelopment
28.87
0.61
Buildings
268.05
5.69
PlantMachinery&Equipments
317.00
6.73
Utilities&otherfixedassets
44.00
0.94
SubTotal(A)
658.02
PreliminaryandPreOperativeExpenses 32.90
13.97
0.70
91
Contingencies
56.03
1.19
MarginMoneyforWorkingCapital
4.4
0.09
TotalProjectCost(A+B+C+D)
751.40
15.95
FINAL REPORT
Land
Keeping in view the maximum built up area of about 50% and open area of about 50%, the
total land requirement for the project is estimated to be about 9.15 Ha. The breakup of land
requirement for the hub and spokes is given below.
Location
Pimpalgaon(Hub)
Area(Ha)
4.00
Sinnar
1.28
Deola
1.26
Sangamner
0.90
Chandwad
0.90
Anturli
0.80
Padalasa
0.80
Kajgaon
0.80
Galangi
0.80
TotalIVC
9.15
As per the suggested O&M framework for the project the land will be contributed by the state
government and hence the cost of land has not been included in the capital cost of project.
LandDevelopment
Cost of land development includes boundary wall, road, water drainage, parking etc. The cost
of development is taken as Rs 2.5 mn/Ha.
Buildings
The estimated costs of construction for various buildings in the projects are given below:
Galangi
Kajgaon
Padalasa
Anturli
Chandwad
Sangamner
Deola
Pimpalgaon
Facility
Warehouse
Cold Store
5000MT
Grape/Pom
egranate
Packhouse
ColdChain
Banana
Packhouse
Ripening
Chamber
Packshed
Ambient
Sinnar
Amount in Rs millions
29.90
5.98
IVC
35.88
21.60
21.60
19.20
19.20
19.20
19.20
76.80
8.10
8.10
8.10
8.10
32.40
2.76
2.76
2.76
2.76
2.76
13.80
3.00
3.00
3.00
3.00
12.00
92
Onion
Store
Knowledge
centre
Business
centre
Guest
house
Miscs
Total
Buildings
FINAL REPORT
14.04
3.51
3.51
3.51
24.57
3.60
3.60
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
2.70
24.30
2.70
2.70
2.00
2.00
2.00
2.00
2.00
2.00
2.00
20.40
29.88
30.41
11.21
15.56
15.56
15.56
15.56
268.05
4.40
2.00
30.41
103.90
The building construction rate for grape packhouse (cold chain) has been estimated to be Rs.
8000/sq. m whereas rate for ambient packsheds for vegetables has been estimated to be Rs.
6000/sq. m. The construction rate for banana packhouse and dry warehouse have been
assumed at Rs. 6000/sq. m and Rs. 6500/sq. m respectively. The lumpsum cost of prefabricated banana ripening chamber of 40 MT capacity (which is equivalent to 10 MT/day
ripening capacity) having an area of 280 sq.m has been taken as Rs. 2.76 million. The rates
are in tune to the industry standards and have been verified against quotations received from
different industry players.
In case of non technical infrastructure, the construction rate has been estimated between Rs.
8000 to Rs. 9000 per sq. m for facilities such as administrative building/business centre,
canteen etc.
Equipments
The break-up of the estimated costs of major machineries is provided below:
Galangi
Kajgaon
Padalasa
Anturli
Chandwad
Sangamner
Deola
Pimpalgaon
Facility
Ripening
equipments
Banana
Packhouse
equipments
Refrigeration
equipmentsCold
Store
Refrigeration
equipments
Packhouse
Grape Packhouse
equipments
Weigh Bridge40
MT
Sinnar
Table: Machinery Cost
IVC
4.20
4.20
4.20
4.20
4.20
21.00
3.00
3.00
3.00
3.00
12.00
60.00
60.00
5.00
2.50
2.50
2.50
12.50
8.00
8.00
8.00
8.00
32.00
2.50
2.50
2.50
2.50
2.50
2.50
2.50
2.50
2.50
22.50
DGsets
6.00
2.00
2.00
0.40
0.40
1.00
1.00
1.00
1.00
14.80
Crates
4.50
4.13
2.25
4.13
1.88
2.25
2.25
2.25
2.25
25.88
Pallets
0.90
0.90
1.35
2.48
1.35
1.35
1.35
1.35
11.03
Refertrucks7mt
18.00
18.00
18.00 18.00
72.00
0.90
1.20
1.20
1.20
1.20
2.40
2.40
2.40
2.40
2.40
Normal
Pickup
1.50
vehicles
Normal trucks15
3.60
MT
1.50
0.90
2.40
2.40
0.90
2.40
10.50
22.80
93
Total
Plant

Machinery
&
114.20
41.93
39.90 41.30 8.08
Equipments
17.90
17.90
17.90
FINAL REPORT
17.90
317.00
The cost wise major components of the project are cold store equipments (Rs. 60 million) and
refrigerated trucks (Rs. 72 million). The rates for plant, machinery and equipments are
comparable to the industry standards and have been verified with the quotations from
different suppliers.
MiscellaneousFixedAssets/Utilities
The breakup of the estimated cost of the miscellaneous fixed assets and utilities is provided
below:
Sangamner
Chandwad
Anturli
Padalasa
2.00
2.00
2.00
0.50
1.20
1.20
2.00
0.50
0.50
0.50
0.20
0.50
0.50
ITsystem
0.30
0.20
0.20
0.05
0.05
0.20
0.05
0.05
0.05
0.05
0.05
2.75
2.75
2.60
.80
1.95 1.95 1.95 1.95
Furniture
0.10
TotalMisc
Fixed
Assets
27.40
Galangi
Deola
25.00
Kajgaon
Facility
Power
supply
system
Water
supply
system
Sinnar
Pimpalgaon
Amounts in Rs millions
IVC
Mn.Rs
IVC
Mn.$
1.20
1.20
36.30
0.77
0.50
0.50
5.70
0.12
0.20
0.20
0.20
1.60
0.03
0.05
0.05
0.05
0.50
0.01
44.10
0.94
The power load for the total project has been estimated to be 3500 KVA. DG sets have been
taken for each spoke and the capacities vary from 80 KVA to 1200 KVA depending on the
requirement. The project would require 0.34 million LPD of water for the operations. The
cost of water supply has been distributed among the locations in proportion to their water
requirements.
13.2.3 Preliminary&PreoperativeExpenses
The provision towards preliminary & pre-operative expenses includes expenditure towards
preliminary expenses like salaries & administrative expenses, travel expenses, market
development expenses, interest during construction period etc. It is also assumed that the
project will be commissioned over a period of one year. The interest during construction
period is capitalized in the project cost. Pre-operative expenses other than interest during
construction period are assumed to be 5% of cost of fixed assets.
WorkingCapitalRequirement
As the project is meant to create facilities and offer them to various users on rental basis, the
WC requirement is assumed to be operating costs like management, maintenance, insurance,
power and water. As most of these expenses and the rent receipts are monthly in nature, so to
cover these expenses the requirement of working capital is calculated by considering the fund
requirement for 30 days.
94
FINAL REPORT
Contingencies
The contingencies related to project implementation are calculated as below:
Contingencies
Physical
Contingencies
Price
Contingencies
Contingencies
(RsMn)
Contingencies
(Mn$)
Land
0.0%
0.0%
0.00
0.000
LandDevelopment
5.0%
8.3%
2.52
0.053
Buildings
5.0%
8.3%
23.36
0.496
0.0%
8.3%
26.31
0.558
Utilities&OtherAssets
5.0%
8.3%
3.84
0.082
Total
56.03
1.189
The price contingencies are based on the whole sale price index for FY 2009
13.2.4 MeansofFinance
The cost of the project is proposed to be financed through a mix of equity and project grant
under VGF from State government and Government of India.
As mentioned in the implementation framework the promoters contribution has been taken at
60% of the project cost (which includes 20% as equity and 40% as debt) and the remaining
funds required will be contributed by state government and GoI as project grant. The table
below shows the funding pattern for the project:
Sr.No.
1
2
3
4
5
Components
EquityPrivateInvestor
Grant:StateGovernment
Grant:GovtofIndia(GoI)
TotalGrant(2+3)
Debt
Total(1+4+5)
Amount(MnRs)
150.28
150.28
150.28
300.56
300.56
751.40
Amount(Mn$)
3.19
3.19
3.19
6.38
6.38
15.95
Proportion(%)
20.00%
20.00%
20.00%
40.00%
40.00%
100.00%
13.2.5 KeyOperatingAssumptions
The key operating assumptions underlying the projects business plan are described below.
OperatingCostAssumptions:
300 working days per annum are assumed for operations.
Power & Fuel Costs
The total connected load of the facilities for all locations is estimated at 3500 KVA. The
power tariff has been assumed at the prevailing rate of Rs 1.30 per unit for agro based
industry in Maharashtra. Average daily requirement of power would be about 12600 KWH.
The details of power load assumptions for the facility are given below:
Facilities
Assumption
ColdStore
Warehouse
1KVA/10MT
1KVA/92sqm
BananaPackhouse
1KVA/45sqm
RipeningChamber
50KVA/40MT
GrapePackhouseColdChain
225KVA/60MT
95
OnionStore
PackshedsAmbient
1KVA/100sqm
Otherbuildings
1KVA/30sqm
FINAL REPORT
1KVA/50sqm
The table below shows the location wise power requirement:

Locations
Pimpalgaon
Sinnar
Malegaon(Deola)
Sangamner
Chandwad
Anturli
Padalasa
Kajgaon
Galangi
Total
PowerLoad(KVA)
1520
450
450
450
90
230
230
230
230
3730
Taking into account the current power supply scenario in the state it has been assumed that
the facilities would run on DG sets for about 2 hrs /day. The average fuel cost for DG set is
assumed to be Rs. 35/Lt.
Water Cost
Daily requirement of water is estimated to be 345 KL/day for all the locations combined. The
charges are assumed to be Rs 40/KL.
Employee Cost
The employee cost has been estimated by considering the man power requirement for
managing the facility. The project will be managed by the developer/SPV, who will maintain
and operate the facilities in the project. This includes management and 24 hour maintenance
of the plant and machineries, management of the canteen, business centre, security, etc. So, a
team of technical engineers, support staffs and security personals will be required. The details
of manpower and their average costs are given in the following table:
Grade/Employee
Managers
TechnicalManager
Operators
Maintenance
Account
Security
SupportStaff
TotalEmployeeCost(PerMonth)
Number
9
9
26
26
16
25
32
143
Salary/month(Rs.)
20000
20000
10000
6000
8000
4000
3000
Total(Rs)
180000
180000
260000
156000
128000
100000
96000
1100000
*Increment in salary is assumed at 5% p.a for 1st five years of operations.
Cost of Maintenance
The cost of maintenance has been assumed as 1.0% of value of plant & machinery and
miscellaneous fixed assets. The maintenance cost will increase by 2.5% every year due to
aging of assets.
Cost of Insurance
The cost of insurance has been assumed as 1.0% of value of plant & machinery and
miscellaneous fixed assets.
Admin & Marketing Overheads
96
FINAL REPORT
The developer will be responsible for only the management and maintenance of the facilities
without any own operations. However, initial tie ups are needed for better capacity
utilization of the facilities. Most of the promotional/marketing expenses will be incurred up
front with only small recurring expenses afterwards. Hence during operations, marketing and
business development expenses will not be significant for the project. The major overheads
for the project will be traveling costs, statutory (like audit etc.) costs and communication
expenses etc. So, the admin & selling overhead costs have been assumed @ 2.0% of revenue
in line with the industry norms for such facilities.
FinancialAssumptions
Taxes
Income Tax rate is assumed to be 33.99% flat (Prevailing Corporate Tax Rate). Income tax is
calculated on PBT after adjusting for the difference between the depreciations calculated
according to Companies Act, 1956 and Income Tax Act, 1961.
Depreciation Rates
Depreciation has been calculated by straight-line method, as per the Companies Act, 1956,
for book purpose, whereas for tax purpose (As per Rule-5 of Income Tax Act, 1961), written
down value method is employed. The rates of depreciation are in tune to the rates that are
used in cold storage and warehousing industry. The depreciation rates used for different
assets are given below:
DepreciationRates
BookDepr
TaxDepr
Plant&Machinery
10.34%
15.00%
MiscellaneousFixedAssets
10.34%
15.00%
Buildings
3.34%
5.00%
The plant & machinery includes refrigeration and cooling systems used for operation of
facility, sorting-grading equipments, crates, pallets etc. The noncore equipments like water
supply system, transformers etc are included in miscellaneous fixed assets. Buildings include,
building for ripening facility, ambient and cold pack-houses, dry warehouse storages,
business center, canteen etc.
RevenueAssumptions
Rental assumptions
Based on the discussion with market players (service providers, food processors, users,
traders and wholesalers) the rental charged for various facilities is tabulated below:
Facilities
Charges/Unit UnitofCharge
AmbientPackshedVegetables
60
Rs/sqm/month
BananaPackhouse
1000
Rs/sqm/month
1400
Rs/MT
Grape/PomegranatePackhouseColdChain:
Sorting/Grading/Packagingcharges
4500
Rs/MT
Warehouse
100
Rs/sqm/month
BusinessCentre
100
Rs/sqm/month
Crates
Rs/cycle/crate
Weighbridge
Rs/MT
97
Logistics
10
Rs/Km
OnionStore
250
Rs/MT/season
ColdStore
250
Rs/MT/month
FINAL REPORT
The rentals charged for these facilities are comparable to the prevailing market rates.
CapacityUtilization
The estimated capacity utilizations are shown in the table below.
Year
Capacityutilization
YearI
40%
YearII
60%
YearIIIandonwards 80%
The capacity utilizations have been assumed conservatively, starting at 40% in the first year.
13.2.6 FinancialPerformance
The estimated financial projections for the project are tabulated:
IncomeStatement:
(Rs Million)
Year
CapacityUtilization
Revenue
AmbientPackshed
BananaPackhouses
Ripeningchambers
Grape/Pomegranate
Packhousecoldchain
Coldstore
Warehouses
OnionStore
Crates
Logistics
Businesscentre,canteenetc
Weighbridge
Revenue
Expenses
LandLeaserent
Power&Fuel
EmployeeCost
Watercost
Maintenancecost
Insurance
Admin&SellingOverheads
TotalExpenses
1
40%
0.24
18.00
7.80
2
60%
0.36
27.00
11.70
51.84
5.50
1.59
0.35
14.49
36.45
3.26
0.14
139.67
1.15
4.36
13.20
1.66
6.58
6.07
2.79
35.81
EBITDA
InterestLongTermDebt(LTD)
InterestWorkingCapitalborrowing
Depreciation
PBT
Tax
NetProfit(PAT)
103.86
36.07
1.80
52.55
13.44
0.00
13.44
3
80%
0.48
36.00
15.60
8
80%
0.48
36.00
15.60
12
80%
0.48
36.00
15.60
16
80%
0.48
36.00
15.60
20
80%
0.48
36.00
15.60
77.76
103.68
8.25
11.00
2.38
3.18
0.53
0.70
21.74
28.98
54.68
72.90
4.90
6.53
0.21
0.28
209.50 279.33
1.15
1.15
6.53
8.71
13.86
14.55
2.48
3.31
6.74
6.91
5.16
4.39
4.19
5.59
40.13
44.62
103.68
11.00
3.18
0.70
28.98
72.90
6.53
0.28
279.33
1.15
8.71
16.85
3.31
7.82
1.95
5.59
45.38
103.68
11.00
3.18
0.70
28.98
72.90
6.53
0.28
279.33
1.15
8.71
16.85
3.31
8.63
1.02
5.59
45.26
103.68
11.00
3.18
0.70
28.98
72.90
6.53
0.28
279.33
1.15
8.71
16.85
3.31
9.53
0.53
5.59
45.67
103.68
11.00
3.18
0.70
28.98
72.90
6.53
0.28
279.33
1.15
8.71
16.85
3.31
10.52
0.28
5.59
46.41
169.37
34.56
2.42
52.55
79.84
14.05
65.79
233.95
10.52
2.85
52.55
168.03
63.30
104.73
234.07
0.00
2.76
10.16
221.15
72.53
148.62
233.66 232.92
0.00
0.00
2.77
2.77
10.16
10.16
220.73 219.99
75.30
76.57
145.43 143.42
234.71
30.56
3.02
52.55
148.59
42.06
106.53
98
FINAL REPORT
In the above table, it is seen that in the first year of operations with 40% capacity utilization,
the revenue from the project is Rs. 139.67 millions which increases to Rs. 279.33 millions at
capacity utilization of 80% from third year onwards. The net income from the project would
be positive from 1st year of operations and is expected to be Rs. 13.44 millions (at 40%
capacity utilization).
MajorFinancialPerformanceIndicators:
Year
EBITDAMargin
74.36%
80.85%
84.03%
83.94%
83.80% 83.62% 83.70%
PATmargin
9.62%
31.41%
38.14%
37.62%
37.29%
37.10%
37.24%
DebtEquityRatio
0.65
0.50
0.37
0.27
0.20
0.14
0.10
DebttoEBITDAratio
3.02
1.68
1.09
0.95
0.81
0.66
0.52
InterestCoverageRatio
2.74
4.58
6.99
7.94
9.18
10.89
13.43
DSCR
2.74
2.41
3.50
3.73
3.97
4.26
4.60
AverageDSCR
3.59
ProjectIRR
23.30%
The above table shows the operational and financial efficiencies of the project. The project is
able to achieve an operating margin (EBITDA Margin) of above 70% from the first year of
operations itself. From fourth year onwards, the project is able to convert about 37% of its
revenue into net profit. The Debt Service Coverage Ratio (DSCR) is expected to be 3.59 and
is considered as highly comfortable from bankers perspective. The equity IRR is coming
around 23%, which seems attractive from investor point of view.
99
FINAL REPORT
14 ECONOMICANALYSIS:IVCNASHIK
The need for economic analysis of any project is to assess various intangible costs and
benefits which are normally not captured in the financial analysis. Any decision on
desirability or otherwise of a project would therefore require to take into consideration such
costs and benefits and then arrive at a net impact of the project on the economy as a whole.
This is more relevant for projects which have a bearing on large segments of the society such
as farmers.
The IVCs have been proposed mainly to plug the gaps and deficiencies along the agricultural
value chains and the aim is to enlarge the size of the value chains in terms of greater revenue
and ensuring a larger share to farmers. The major benefits therefore expected would be in
terms of better price realization, wastage reduction and employment generation. The major
costs considered are opportunity cost of factors of production viz. land, capital and labour.
The above costs and benefits have not been captured in the financial analysis as major
assumptions there include all facilities being developed by private developers for leasing out
to actual users. Thus, financial analysis has taken revenue in form of rentals only which do
not truly reflect above gains. Also, as land for all facilities is to be provided by state
governments on BOT model, financial analysis does not include cost of land even as these
land parcels may have large opportunity cost to the economy as a whole.
14.1 METHODOLOGYANDASSUMPTIONS
The economic analysis is aimed at calculating EIRR which has been done by identifying the
benefits arising due to the proposed practices and infrastructure/facilities and are evaluated by
comparing With Project and Without Project scenarios.
The major benefits considered for calculation of EIRR are those which are easily quantifiable
and are as follows:
BetterPricerealizationduetoqualityimprovementoftheagricultural
produces
A major impact expected is significant improvement in produces through modern methods of
handling, packaging, storage and transportation which would lead to better price realization.
WastageReduction
The interventions in technological infrastructure such as packaging, storage, temperature
controlled transportation and better post harvest management practices will help in increasing
the shelf life of the perishable commodities. The improved shelf life will lead to low wastage
level even during transportation and marketing to distant places in the country.
100
FINAL REPORT
EmploymentGeneration
Considering the high unemployment rate in India and the seasonal availability of work for
agricultural labour the project will provide good opportunity to work throughout the year for
the people of surrounding areas.
Largeincreaseinrevenueandtaxrealization
The project envisages large investments in agribusiness infrastructure which are likely to
generate sufficient revenues and lead to incremental tax realization by the government.
Similarly, the major quantifiable costs considered for calculation of EIRR are given below.
While opportunity cost of land has been treated as a capital cost for the purpose, opportunity
cost of capital (project grant) and labour has been treated as recurring cost.
Opportunitycostofland
The land for the IVCs is to be provided by state governments on BOT model. Thus, the cost
of land has been taken as the rates prevalent for industrial land in the surrounding areas. The
opportunity cost of land is broadly in line with Maharashtra Industrial Development
Corporation (MIDC) land rates in the region.
Opportunity cost of capital/ project grant
The project provides for large amount of capital grant to private developers, which may range
from 90% of project cost in Bihar to 70% of the project cost in Maharashtra. For the purpose
of EIRR calculation, the opportunity cost of project grant amount has been considered which
was not captured by the financial analysis. Opportunity cost of capital contributed as project
grant is assumed at 10% per annum. The assumption is based on the fact that the money
invested as grant can be invested elsewhere and a minimum return of 10% per annum has
been assumed conservatively.
Opportunity cost of labour
The project assumes large employment generation for agricultural labourers and limited
employment opportunities for management professionals. For the calculation of EIRR, the
opportunity cost of agricultural labourers has been taken assuming that they had options to
work on other projects such as National Rural Employment Guarantee Scheme (NREGS).
The detailed calculation for above mentioned benefits and costs has been done at IVC level
and is given below:
14.2 QUANTIFICATIONOFBENEFITS
Qualityimprovementleadstopremiumpriceofcommodities
The incremental price realization has been calculated based on the price range available in the
market for different grades (based on firmness, colour, size etc.) of the produce. The table
below compares the without-project and with-project cases to estimate the incremental
benefits due to improved quality of the produce.
101
Without
Project
FINAL REPORT
WithProject
EstimatedAdditional
PriceRealization(%)
Price
(Rs/MT)
Increm
ental
Benefit
(Rs/MT)
Quantity
(MT)
Total
Incremental
Benefit(Mn
Rs)
Crops
Price
(Rs/MT)
Min
Max
Weighted
Average
Fruits
60000
10%
25%
13.0%
67800
7800
36900
287.82
Banana
16000
10%
15%
11.0%
17760
1760
75000
132.00
Vegetables
6000
5%
7%
5.4%
6324
324
70500
22.84
Grains/pulses
10000
5%
10%
6.0%
10600
600
36000
21.60
Onion
14000
10%
15%
11.0%
15540
1540
3500
5.39
221900
Total
469.65
The incremental benefit due to quality improvement is estimated to be Rs 469.65 million per
annum at 100% capacity utilization.
WastageReduction
The table below shows the assumptions made and calculations of the benefit due to reduction
in wastage.
Without
Project
WithProject
WastageReductionRange(%)
Crops
Quantity
Saved(MT)
Min
Fruits
Banana
Vegetables
Max
Weighted
Average
Selling
Price
(Rs/MT)
Quantity
Saved
(MT)
Total
Incremental
Benefit(MnRs)
10%
20%
12.0%
67800
4428
300.22
15%
20%
16.0%
17760
12000
213.12
10%
15%
11.0%
6324
7755
49.04
Grains
5%
8%
5.6%
10600
2016
21.37
Onion
10%
15%
11.0%
15540
385
5.98
Total
26584
589.73
The interventions in the IVC would help in reduction in wastage of about Rs 589.73 million
per annum with annual saving of about 26500 MT of fruits, vegetables, grains, pulses etc. at
100% capacity utilization.
WithoutProject
WithProject
Location
No. of Day/
Annum
workers
Annual
amount
(RsMn)
No.
of Day/
workers
Annum
Annual
Annual
Incremental
amount (Rs Benefit(RsMn)
Mn)
Pimpalgaon
0.00
328
100
3.94
3.94
Sinnar
0.00
104
100
1.25
1.25
Deola
0.00
190
100
2.28
2.28
Sangamner
0.00
104
300
3.74
3.74
Chandwad
0.00
104
300
3.74
3.74
Anturli
0.00
186
300
6.70
6.70
Padalasa
0.00
186
300
6.70
6.70
Kajgaon
0.00
186
300
6.70
6.70
Galangi
0.00
186
300
6.70
6.70
102
Total
0.00
1574
41.74
FINAL REPORT
41.74
The estimated income from incremental employment will be about Rs 41.74 million.
The income tax calculated for the project is also incremental in nature when compared to the
without project scenario hence, considered as an economic benefit. The likely increase in
revenue collection has been captured in the projected cost benefit statement for EIRR.
14.3 QUANTIFICATIONOFCOSTS
EconomicCostofProject
Items Sr.No
Particulars
Amount(MnRs) Amount(Mn$)
Land
233.71
8.98
Land&SiteDevelopment
28.87
1.11
Buildings
268.05
5.28
317.00
6.02
Utilities&otherAssets
44.10
0.90
SubTotal(A)
891.73
22.29
ProjectImplementationCost@10%ofADBFunds
35.05
0.74
Preopexpenses
32.90
0.67
Contingencies
56.30
1.14
CapacityBuilding
48.31
1.03
TotalProjectCost(A+B+C+D+E)
1064.29
22.59
Based on the assumptions mentioned in the methodology the estimated economic cost of the
project would be Rs 1064.29 million or 22.59 million $. The exchange rate of 47.114998 Rs
per Dollar is considered for calculation of cost of project in Dollar value.
RecurringCosts
Location
No.ofworkers
Days/Annum Annualamount(RsMn)
Pimpalgaon 328
100
4.10
Sinnar
104
100
1.30
Deola
190
100
2.38
Sangamner
104
100
1.30
Chandwad
104
100
1.30
Anturli
186
100
2.33
Padalasa
186
100
2.33
Kajgaon
186
100
2.33
Galangi
186
100
2.33
Total
1574
19.68
As mentioned earlier the estimates are based on NREGS. According to the scheme the
government will provide minimum 100 days of employment to rural families with daily wage
of Rs 125 per worker.
103
FINAL REPORT
Opportunity cost of capital
Opportunity cost of capital contributed as project grant is assumed at 10% per annum. The
assumption is based on the fact that the money invested as grant can be invested elsewhere
and a minimum return of 10% per annum has been assumed conservatively.
Opportunity cost of other factors
Opportunity cost of other factors such as power, water, fuel etc. is not incremental in nature
as these factors are available already and will be used from existing sources.
14.4 COSTBENEFITSTATEMENT
Year
12
16
20
CapacityUtilization
Imp
Peri
od
40%
60%
80%
80%
80%
80%
80%
80%
A.EconomicBenefits
QualityImprovement
187.86
281.79
375.72
375.72
375.72
375.72
375.72
375.72
WastageLoss
235.89
353.84
471.79
471.79
471.79
471.79
471.79
471.79
IncrementalLabour
16.69
25.04
33.39
33.39
33.39
33.39
33.39
33.39
IncrementalIncomeTax
0.00
22.28
46.18
49.69
59.24
64.36
66.88
68.03
TotalEconomicBenefits
440.45
682.95
927.08
930.58
940.13
945.26
947.78
948.93
B.EconomicCosts
Opportunitycostoflabour
7.87
11.81
15.74
15.74
15.74
15.74
15.74
15.74
OpportunitycostofCapital
50.07
50.07
50.07
50.07
50.07
50.07
50.07
50.07
TotalEconomicCost
57.94
61.88
65.81
65.81
65.81
65.81
65.81
65.81
NetEconomicBenefits(AB)
382.50
621.07
861.26
864.77
874.32
879.45
881.97
883.11
14.5 CALCULATIONOFECONOMICIRR(EIRR)ANDNPV
Economic IRR (EIRR)
Year
ImpPeriod
12
16
20
Economic
Investment
1064.29
NetEconomic
Benefits
0.00
382.50
621.07
861.26
864.77
874.32
879.45
881.97
883.11
NetEconomic
CashFlow
1064.29
382.50
621.07
861.26
864.77
874.32
879.45
881.97
883.11
EconomicIRR
(EIRR)
57%
The economic IRR for the Nasik IVC is estimated to be 57% which is also high. The high
level of IRR is again also due to the maximum investment in productive assets and most of
the facilities proposed will directly be used for value addition. But it is much lower than the
Aurangabad IVC due to higher opportunity cost of land and higher investment in support
infrastructure.
104
FINAL REPORT
14.6 ECONOMICAPPRAISALRESULTS
14.6.1 MajorEconomicIndicators:
The major economic indicators considered to assess the economic viability of the project are
given in the table below:
NPV(RsMillion)
2,350.22
NPV(Million$)
49.88
BenefitCostRatio
13.86
NPVI
2.21
NPV:
The positive NPV for the project indicates the viability of the project. The NPV is calculated
considering the economic life/ concession period of project as 20 years. The discounting rate
for calculation of NPV is the Weighted Average Cost of Capital (WACC). The WACC is
calculated by assuming the capital cost of 16% for the private investor, 10% for project grant
and 12% for debt. The calculation of WACC is shown in the below table:
Details
Share
CostofCapital
ProjectGrant
40.00%
10%
20.00%
16%
Debt
40%
12%
WACC
12.00%
BenefitCostRatio(BCR):
The average BCR over the project life is estimated to be 13.86. The ration indicates that for
every one $ of expense it will generate about fourteen times of expense over the life of
project. Hence, the project is highly economic viable.
NetPresentValueper$ofInvestment(NPVI):
The NPVI of more than zero is always considered as a good indicator of the economic
viability of the project. In this case, the estimated NPVI is 2.21 which is quite high
105
FINAL REPORT
AURANGABADAMRAVATIINTEGRATEDVALUECHAIN
AurangabadAmravatiregion,
Maharashtra
FocusCrops
SweetLime
Kesarmango
Orange
Lemon
Banana
DPR:AurangabadAmravati
IntegratedValueChainProject
106
FINAL REPORT
AurangabadAmravatiRegion
IL&FS Clusters identified Aurangabad-Amravati region for Integrated Value Chains of high
value/volume agricultural/horticulture produce based on combination of several factors such
as agricultural production in terms of volume and variety, human and economic development,
suitability for development of integrated value chains and commercial viability of
infrastructure projects. This region covers Aurangabad, Amrawati, Buldhana, Jalna and Akola
districts, in Maharashtra and are shown in the map below
AmravatiAurangabad
Region
The region is known in particular for sweet lime in Aurangabad and Jalna, Kesar mango in
Paithan Aurangabad; lemon and banana in Buldhana, and orange in Amravati. The major
orange producing districts in the state region are Amravati, Nagpur, Yavatmal and Akola, of
which Amravati and Nagpur account for about 940 thousand hectares with production
about 500 thousand metric tonnes. This cluster also produces about 87% of the total sweet
lime grown in the state. Though the production of mango in the region is small compared to the
mango-belt in North India, Kesar mango is fast cornering a niche segment of the market with its
distinctive taste. Based on these considerations, and the assessed potential for development, the
focus crops identified for the region are:
The focus crops in this region are:
Sweet Lime
Kesar mango
Orange
Lemon
Banana
107
FINAL REPORT
15 FOCUSCROP:SWEETLIME
Maharashtra ranks second among Indian states in production of sweet lime, producing about
23% of the total production in the country. The state has 98,400 Ha of area under sweet lime
cultivation with an annual production of 678,700 MT. The table below provides details of
sweet lime grown in the study region.
District
Aurangabad
Jalna
Amravati
Akola
Buldhana
Total
Area(Ha)
21617
19158
1925
200
257
43157
Production(MT)
302641
268212
19250
2000
2570
594673
Source: Directorate of Horticulture, Government of Maharashtra (FY 2007-08)
The cluster produces about

87% of the total sweet lime
produced in the State. The
major sweet lime producing
talukas (blocks) in the cluster
are Ghansawangi, Ambad and
Jalna in Jalna district and
Aurangabad, Paithan and Kannad in Aurangabad district.

The production is spread over two seasons namely Ambia bahar and Mrug bahar. Ambia
Bahar accounts for 55-60 % of the production. Arrivals for this season start in the month of
August and end in the month of November. Mrug Bahar accounts for the balance 40-45 % of
the production and it starts in the month of February and ends in the Month of May. In case of
Aurangabad, Ambia Bahar accounts for almost 65-70 % of the production with harvesting
period spread between August and end of October. Mrug Bahar accounts for the balance 3035% of the production with harvesting period spread between February and May with March
and April being the peak season.
Sweet limes in the region are propagated by budding. The method of shield budding is the
most popular method for propagation. The square system is used for plantation of sweet lime.
The distance between plants is generally kept at 18 ft with about 125 plants per acre. The
trees start getting economic yield from 3rd year onwards and the economic life of the trees is
12-15 years depending on the maintenance. Intercropping with tur, maize and cotton is
carried out generally up to the first 4-5 years.
The diagram explains the major channels of
trade of sweet lime in the region:
Based on the point of sale, the supply chain
can be classified into three types:
1.
At Farm Gate Channel 1: Accounts

for 80-85%
2.
At APMC Mandis within Production

Clusters Channel 2: Accounts for 1020% of the produce
3.
At distant market by some big farmersChannel 3: 1-2%
Farmer
Channel1
Channel3
Channel2
PreharvestContractor
Commissionagent
Trader
CommissionAgentinDistantmarket
RetailerinLocal
Market
Wholesaler
RetailerinDistantMarket
CONSUMER
108
FINAL REPORT
The major players involved in the trade of sweet lime are farmer, Pre Harvest Contractor,
local commission agent, trader, commission agent in distant market, wholesalers and retailer.
The roles played by each player in the value chains are given below:
Farmer
The average orchard size of sweet lime in the study region is about 1-2 Ha. One Ha of
orchard accommodates about 310 plants (18 ft X 18 ft) which are maintained at a height of
about 12-15 feet. The cost of establishment of sweet lime orchard is about Rs. 51,000 1. The
breakup of the cost is given below.
Activity
Costofsapling(310sapling)
Labourcost(levelling,digging,weeding,saplingplantation,
manurespread,fillingetc)
Costofirrigation(dripirrigation)
Compost/fertilizers
Pesticide
Others
TotalinRs
CostperHa(inRs)
4960
4000
25220
3000
3000
2000
42180
The breakup of annual variable cost of cultivation of sweet lime is given below.
Activity
Irrigation
Fertilizer+Labour
CostperHa(Rs.)
2500
15000
Pesticide+Labour
20000
Labour(Trimming,deweeding,etc)
9000
HarvestingLabour
7500
Miscellaneous
2000
Total
56000
Each plant produces about 80 Kg of fruit and the average productivity of the region is 25 MT
per Ha. Based on the existing market scenario, the price received by farmer was
approximately Rs 8/Kg in the peak season which went to a high of Rs 30/ kg during lean
season at farm level. In Channel 1, the produce is sold to pre harvest contractor (local agent)
about 2-3 months before the harvesting. The farmer bears the cost of harvesting and loading
indirectly as the pre harvest contractor deducts 10% from the value of produce during the
final settlement with farmer. The reason given behind deduction is that the pre harvest
contractor buys all the produce without sorting and grading the produce and he also pays for
the harvesting. However, he also pays the pre agreed price to farmer irrespective of the
market price of the produce.
In channel 2; farmer bears the cost of harvesting, loading, un-loading at APMC, weighing,
local transport to APMC market yard and commission to commission agent (6.25%).
Cost of land has not been taken into account for calculation of total cost of establishment of lemon orchard
109
FINAL REPORT
PreHarvestContractor(PHC)
PHC provides assurance to farmer for buying of produce from the field itself by leveraging
his linkages in the distant market. He also provides credit to farmer for cultivation. The
interest cost of the credit is factored in the prices offered to the farmer and rate of interest
varies between 16-20% based on borrowers individual relation with the PHC. Price fixation
between the farmer and the trader (channel-1) is by negotiation. The trader offers a price
based on his information of price in the local and distant market. The difference in price in
local market and the price offered to the farmer also depends on the distance of the market
from the farm. Transportation cost in this case is borne by the PHC. Most of the farmers
prefer to sell by this channels as there are no marketing costs, harvesting is the responsibility
of the PHC and the risk is with the PHC. Almost 80-85 percent of the produce is marketed
through PHC. Though a PHC is able to realize more profit through this system, it also
involves a high degree of financial risk. The ownership of the produce lies with the farmers
but the PHC is committed to pay a pre-fixed price to growers from whom he has sourced the
produce.
CommissionAgent(CA)
CA facilitates the sale of farmers produce for which they charge a commission of 6-8% of
the sale value from the farmers. A cess of 1.05% (1% market fee and 0.05% supervision fee)
of value of the produce is collected from buyers by CA on behalf of the market committee.
Payment is made to the growers typically on 8th day of the harvest. CAs are an important link
in the value chain. They bear the financial risk as they pay to the farmer on spot after auction
but receive money from wholesaler after some days depending on mutually agreed terms and
conditions. They also provide financial support to farmers for cultivation of crops. Like PHC,
commission agents also extend credit to growers and the interest costs are factored in the
same manner as it is done by PHCs. Sometimes CAs may purchase on their own from the
farmer and sell through commission agent in distant markets of Delhi, Hyderabad, Jaipur,
Agra, Ludhiana etc. In this case the cost of marketing from local APMC yard to distant
wholesale market is borne by CA.
Traders
They are the major buyer in the APMC markets. They also bear the price risk as the produce
purchased on day-1 takes about 3 days to reach destination markets and during this time price
may vary both sides. Price discovery in the APMC market yards is by Open Call Auction
method. The traders bear the cost of loading at local APMC yard (Rs 1100-1500/ Truck of 15
MT), market cess (1.05%), weighing charges of truck (Rs 25/ Truck), transportation cost to
Delhi (Rs 27000-30000/ 15 MT truck), unloading at distant market in Delhi (Rs 1500/ Truck),
Grading (Rs 1200/ Truck) and commission to CA (10%).
Wholesaler
The Wholesaler is the major buyer in the distant market and has linkages with the local
retailers and markets of surrounding states. He also plays the role of bulk-breaker and sells
the produce in smaller units to retailers. Most of the sorting and grading takes place at this
point itself.
110
FINAL REPORT
Retailer
The retailer is the point of contact with the final consumer of the produce and bears the cost
of local transportation and marketing of the produce. He also bears the risk of losses due to
quality deterioration and marketing of the produce. These risks are factored appropriately in
the retail prices to cover potential losses.
After picking, the fruits are loaded in the trucks as loose by spreading paddy straw in the
truck to keep the fruit safe from injuries. There is no farm level grading or packing of produce
irrespective of the marketing channel used to market the produce. The fruits are generally
loaded into an open truck or tempo/tractor trolley and sent to destination markets for sale. In
cases of Channel 2, sweet lime brought from orchards in the APMC markets are heaped
properly on the auction platform without causing any damages to the fruit. For this purpose
the auction platforms are covered with paddy straw in the market yards and then the produce
is auctioned for price discovery. The produce is sold by weight in all marketing channels. The
grading and packaging mostly take place in consumption market only. The packaging weight
depends on the market place for example the packaging weight per gunny bag is 40 Kg in
Jaipur market where as it is 20 Kg/ Bag in Delhi.
In all the markets grading is done manually. The grading is done based upon the size and
weight of the fruit. Simultaneously, the fruits are sorted where the diseased and bruised fruits
are discarded. Based on size, fruits are graded into 4 grades (no. of fruits per kg varying from
4 to 8 fruits).
The traders in production clusters do not generally store the product. They operate in such a
way that the product reaches the destination market within a maximum of 3 days of
harvesting. Transportation is carried out in ambient temperature in open trucks. The fruit is
generally not stored for off-season sales.
A value chain, indicating the various activities in the value chain, actors performing the given
activity and cost build-up at every step has been mapped in this section. This value chain (for
1 Kg of Sweet lime) has been mapped for the supply chain having following characteristics:
1. The marketing chain follows Channel 1, i.e, Farmer to PHC to wholesaler/Commission
agent in distant market to retailer to Consumer.
2. The cost of production for the farmer is only the variable cost for maintenance of one acre
orchard per year. It does not include the cost for the first five years of orchard where there
are no returns.
3. The distant consumption market considered for this case is Azadpur APMC Mandi, in
New Delhi
4. Cost of capital and opportunity cost for the all the intermediaries has not been considered
in cost build up and for calculating the spread
5. The cost of retailing, which includes the cost of shop, wages, rent etc has not been
considered
6. The prices considered are average prices for the month of September in production
clusters in Jalna and Aurangabad and destination market at Delhi based on the data
corroborated from traders. The same has been cross checked with the data from
Agmark.net for the same period
111
FINAL REPORT
RetailersMargin
Transportation
WholesalersMargin
Transportationlosses@2%
Rs3.60
Rs0.20
Rs2.10
Packingcharges
Rs0.32
Sortingandgrading
Rs.23.00
(RetailersPrice)
Rs0.50
Rs0.50
PHCsMargin
Rs0.80
Unloading
Rs1.60
Rs0.10
Harvesting,loading
FarmersPrice
(WholesalersPrice)
Rs3.50
Commissioncharges
@10%inDelhi
TransportationtoDelhi
Rs.19.00
Rs0.08
Weightloss@5%
Rs.16.00
(PHCsPrice)
Rs2.00
Rs0.80
Rs8.00
In the above diagram, the farmer pays for the harvesting and loading labour. The PHC pays
for the transportation to destination market, unloading cost in the market, commission and
also bears the weight loss occurring during transit. The sorting and grading cost in the
destination market is borne by the wholesaler. He also bears the loss in wastages and packing
charges. The retailer buys the product from the wholesaler and pays for the transportation cost
to the retail stores/points.
Particular
CostofMaintenanceoforchard/Purchase
CostofMarketingincl.CommissionAgentcharges,wastages,etc.
SalePrice
Spread
Farmer
2240
800
8000
4960
PHC
8000
4502
16000
3498
Rs/MT
Wholesaler
16000
900
19000
2100
Retailer
19000
200
22800
3600
There are four intermediaries between the farmer and the consumer in the sweet lime
supply chain (including the commission agent).
The price build up from farmer to consumer is around 3 times.
The farmer earns a margin of Rs. 4960 per MT which is about 22% of the consumer
rupee
PHC incurs a cost of around Rs. 4500 per MT in transportation, commission charges,
weight loss, etc. The margin of PHC is about Rs.
3500 per MT which is about 15% of consumer rupee
Wholesaler incurs a cost of around Rs 900 per MT in

various activities such as labour, packaging, wastages
etc. The wholesaler earns a margin of Rs 2100 per
MT that is around 9 paisa of a consumer rupee.
The commission paid by the farmer to the

commission agent constitutes 7 paisa of a consumer
rupee.
112
FINAL REPORT
The share of consumers rupee by various actors in the value chain emerges as shown (in
% of consumers rupee) :
15.2.1 PostHarvestInfrastructure
Sweet lime is treated as a bulk horticulture produce with limited sorting/grading and produce
is handled manually throughout the supply chain. The produce is also dumped as loose by
spreading paddy straw on the bed of transportation vehicle and sorting/grading in this case is
carried out by the wholesaler in destination markets. Manual sorting, grading and packaging
is done at the APMC markets under the sheds of the CA shops or at the destination market.
Sweet lime is not stored in cold storages and the produce is sent to distant markets on the day
of sale itself. There is no farmers cooperative or any other institution which is engaged in the
marketing of sweet lime in the region. There are no sweet lime processing units in the region
at present. After harvesting and packing, the produce is immediately transported to
destination market mostly by trucks as the cluster does not have adequate rail connectivity. In
very cases, rudimentary sorting, grading and packing at the farm level (in Auragabad district),
is carried out by the PHC. The sorted/graded produce is packed mostly in gunny bags with
specifications of grade marked on the outer side of bag.
Agri Tech Farm Case Study
Agri Tech India Ltd has set up a 250 acres farm at Issarwadi, Taluka: Paithan on Aurangabad-Paithan
road. The company has been promoted by M/S Nath Paper Mills Ltd. The farm is an excellent example
of corporate farming and showcases some of the best farm management practices. Total area in the
farm has been divided in to various segments like horticulture planting area, floriculture plot, field crop
planting area, cash crop planting area, seed multiplication plot, R&D plot and experimental plot. Under
horticulture area, there are two large orchards of Mango and Grape has been set up in an area of 36
113
FINAL REPORT
acres and 60 acres respectively. Entire area under horticulture crop and floriculture is under drip
irrigation. Various experiments of pilot testing of certain crops are carried out under R&D area to
assess the viability of commercial cultivation.
The orchards are managed scientifically to ensure best yield and reduce the probability of any
pest/disease occurrence. The buyers generally visit the farm during harvest period and negotiate with
the farm owner for the prices. Most of the times, the owner is able to get a better realization as he is
able to offer significant volumes of individual products like Mango and Grapes. Once the prices are
finalized, the produce is harvested under the supervision of farm staffs.
the gaps and inefficiencies in the sweet lime value chain. A detailed structured survey was
undertaken to map the existing supply chain and identification of gaps at each stage, with
added focus on institutional, infrastructural and logistical barriers. After the detailed field
survey, gaps identified were discussed with a range of key stakeholders to get their feedback
on the analysis and understanding of issues. The following gaps are identified in the value
chain:
No farm level sorting, grading, washing and other facilities in the region. There are also
no de-greening facilities in the region.
There is no requirement from domestic markets for sorted, graded and packaged
produce. The export market has not been catered as yet where higher prices may be
obtained for these services. There is also a limited opportunity for export as the
marketable surplus mostly caters to the domestic demand.
There is no sorting, grading and any type of primary processing taking place in APMC
markets in the region. The packaging and grading takes place in consumption market
only with only minimal sorting grading at the farm gate. Most of the produce is sold and
marketed outside the APMC markets and the arrivals in APMC markets are not very
high except for some places. Further, any arrivals in local APMC markets are mostly
sold in the local markets by the local merchants.
No processing facility for the fruit exists in the cluster.
Many times, lack of market intelligence of farmers about prices and demand leads to
lower price realization
15.4 POTENTIALINTERVENTIONS
Two pack houses for orange in Aurangabad and Jalna districts are proposed. The proposed
locations are Jalna and Paithan. The pack houses will have following facilities for orange:
Sorting
Grading
Packaging in plastic crates
The pack houses at Paithan will cater to mango as well. The details of the facilities have been
captured in the subsequent chapter.
114
FINAL REPORT
16 FOCUSCROP:KESARMANGO
Maharashtra produces 5% of the total production of mangoes in the country. Total area under
mango cultivation in Maharashtra has marginally increased from 0.44 million Ha in 2006-07
to 0.45 million Ha in 2007-08 and the production also increased from 0.64 million MT to 0.71
million MT during the same period. Productivity of mango in Maharashtra is around 1.6
MT/Ha which is much lower in comparison to the national average, which stands at
6.3MT/Ha. Ratnagiri, Sindhudurg, Raigarh and Aurangabad are the major mango producing
districts of Maharashtra. Major varieties cultivated in the state are Alphonso, Kesar and Pairi.
In Amravati region, Aurangabad is the major district under mango cultivation and it accounts
for 15% of the total production of the state. Total production of mango in Aurangabad district
is approximately 0.1 million MT and the productivity is around 6.2 MT/Ha, which is much
higher in comparison to the states productivity. Paithan, Aurangabad, Sillod and Vaijapur are
the major talukas under mango cultivation in Aurangabad district. Among these, Paithan and
Aurangabad accounts for about 20 percent of total production in the district.
AreaandproductionofMango
Districts
Buldhana
Akola
Amravati
Jalna
Aurangabad
AreainHa ProductioninMT
1263
5051
74
442
478
1912
450
19
17264
108257
Kesar is the most prevalent variety of Mango in

major talukas of the district. As per the
information provided by mango growers in the
region, area under Kesar mango has increased
in the past few years. Sugarcane has been
replaced by mango due to decreasing water resources in the region. Contrary to other varieties
of mango such as Dasheri, Langra etc. that follow alternate bearing cycle, Kesar mango bears
fruit every year. Harvesting of Kesar Mango begins from mid of April and attains peak
during mid of May. It is also being exported to Middle East, USA, UK and Japan etc.
16.1.1 Valuechainanalysis
Tradechannelofmango
The following illustration depicts the most commonly observed supply chain mechanism of
mango in the region:
Farmer
PHC
Commission
Agent
Wholesaler
Retailer
Farmer
Various channels of the mango supply chain are mentioned below:
Direct Sourcing at Farm: Pre-harvest contract is the most commonly used sales
system of mangoes in the region. Around 80% of the produce from an orchard is sold
under pre-harvest contract. The contractors evaluate the orchard during the initial
stage of fruiting and payment is done to the farmer on per kg basis. Some of the
115
FINAL REPORT
farmers also negotiate price of their orchard on lump sum basis. The quantity, quality
and rates are negotiated on the basis of mutual agreement between the farmer and the
contractor. Cost of activities such as harvesting, packing and transportation at the
farm gate are borne by the contractor.
Purchase by Processing Units: Processing units like Jain Food Park and Uni-Fruity
directly procure the raw material at the farm gate. Apart from this, they also procure
through agents/suppliers. Processors are more price sensitive and quality is not a
major concern for them. They mostly buy grade C & D material which otherwise
cannot be sold in fresh retail market. It is estimated that around 15% of Mango
produced in the cluster is procured through this system.
APMC Market yards: Farmers in the catchments of nearest APMC bring their
produce which is sold under open auction mechanism. It is observed that at times,
farmers do not bring the produce to nearest market yards and travel to a bigger
market yard in expectation of a better price. Volume of trade through this mechanism
is estimated to be about 5% of the total Mango trade.
The role played by major stakeholders and the value added at each stage is briefly captured
below:
Farmer:
Mango saplings are planted by the farmers in pits and the planting distance of 15mx15m is
maintained by them. Around 475 plants can be accommodated in a hectare. Farmers incur a
cost of around Rs 12625 2 in the 1st year in establishment of mango orchard. The cost of
establishment of orchard in a hectare is represented in table below:
Activity
pitdigging
fertilisers
organicmanure
pesticides
growthhormonesforrootsetting
intercultureoperations
irrigation
plantingmaterial
dripirrigationsystem
Total
CostinRs/Ha
7125
5000
5000
3000
500
25000
3000
19000
55000
122625
The tree starts fruiting from 5th year onwards.

Yield of the tree increases as the plants grows
older and reaches up to 15 MT/ha.
5th year: 10 kg per plant
7th year: 12-15 kg per plant
10th year: 20-25 kg per plant
The above trend can be seen in those orchards that are well maintained. However, average
yield of mango in the cluster is only about 5-6 MT per hectare. Some farmers who supply to
the exporters have Global GAP certified farms. Only 10% of the total production is of export
quality and the remaining is as follows:
Grade
Averagefruitweight(grams)
A
250300
B
200250
C
<200
*about50%ofgradeAisofexportquality
%oftotalproduction
20*
30
50
It does not include cost of land.
116
FINAL REPORT
Besides the initial investment, farmers incur a cost of around Rs 0.15 million to Rs 0.06
million annually on maintenance of mango orchard. It includes cost of pruning of dead and
diseased branches, costs involved in plant protection and fertilizer application, irrigation etc.
The operational cost per Ha is represented below:
Activity
Operationalcostperhectare
fertiliser
kaltar(Growthhormone)
pesticides
micronutrients
irrigation
labour
Total
Withuseofgrowthhormone
CostinRs.
76000
38000
15000
3900
3000
15000
150900
Withoutgrowthhormone
CostinRs.
25000
0
15000
3900
3000
15000
61900
As evident from above, cost of fertiliser application constitutes a major chunk of operational
cost.
As mentioned earlier, orchards are leased by the farmers to the contractors at the time of fruit
setting. The price received by the farmer largely depends on the stage of the orchard at which
the contract takes place. Pre-harvest contract at the advance stage fetches better price to the
farmers as the yield estimates are more realistic at this stage leading to lower output risk.
Around 20-50% of the estimated contract value is paid in advance to the farmer.
Preharvestcontractor:
As mentioned earlier, Pre-harvest contractors visit the farmers orchards in February when the
fruits are of very small size and they offer a purchase price to the farmer on the basis of their
own estimate of quantity and quality of the expected fruit. Due to this, the weather risk
remains with farmer only.
The time of harvesting is decided by the contractor on the basis of maturity of fruit as well as
price prevailing in the market. Harvesting season starts from May and lasts till mid June.
Harvesting is done by labourers employed by the contractor. This is done with the help of
secateurs in the morning or evening hours from 6:00 a.m. to 8:00 a.m. and after 5:00 p.m.
respectively. Stalk of 1-1.5 inches is left attached to the fruit while harvesting. Entire produce
is harvested in 3-4 harvestings on weekly interval. 1 person can harvest up to 100 kg of fruits
in 4 hours. Fruits are collected in plastic crates, which are either single layer crates or 20 kg
crates.
In case of export, harvesting is done in the supervision of representative from contractor and
plucking is done by trained persons. The fruit is plucked manually. Sorting and grading of
fruits is done both in case of export as well as
HarvestingatOrchard(Includesplucking,
sorting&grading)
domestic markets. Fruits are packed only after
sorting and grading at the field level. A small
packing shed is available on most of the farms where Packaging(inwoodenandcardboardboxes
asperbuyersspecifications)
fruits are collected on tarpaulin for grading and
packaging. Fruits are packed in CFB or wooden
boxes depending upon buyers specification. The
Transporttodestinationmarkets(mostly
via.roadtransport)
transit time for Delhi and Mumbai are estimated at
35-40 and 15-16 hrs respectively up to retail market
distribution. The entire post harvest practice, carried
Auctionatdestinationmarketand
procurementbywholesaler
out by the contractor, is shown in the diagram.
117
FINAL REPORT
Commissionagent:
The commission agent facilitates trade between the contractor and the wholesaler and for
which they charge 6-8% commission from the contractor.
Wholesaler:
The wholesaler is responsible for distribution of produce to various retailers. Second level of
sorting/grading has also been observed at the secondary/terminal markets. Accordingly, the
produce is sold to retailers based on specific grades.
16.1.2 Pricebuildupalongthevaluechainofmango
Value chain of 1 kg of mango indicating the various activities and cost build-up at every step
has been mapped, as shown below.
ConsumerPrice
Retailersmargin
Rs40
Losses
Rs6
Wholesalersmargin
Wholesalersexpense
Rs4
Rs3.5
Contractorsmargin
Rs3.5
Commission
Rs0.9
Wastage
Rs30(WholesalersPrice)
Harvesting,gradingand
packaging
Rs1.4
Rs1.6
Farmgateprice
Rs23(ContractorsPrice)
Rs1.8
Rs17
It is assumed that mango is traded at Azadpur (Delhi) APMC and sold in retail markets
of Delhi.
The most commonly observed trade channel has been taken for price build up i.e.
Farmer-Contractor-CA-Wholesaler-Retailer.
The cost of retailing has not been taken into consideration.
The average cost of mango cultivation comes to around Rs 6/kg. Generally, farmers incur a
cost of Rs 60,000 per Ha on maintenance of orchard and the production is around 10 MT/Ha.
The farmer realizes Rs 17/kg and his net margin is around Rs 11/kg. The contractor bears the
cost of harvesting, grading and packaging of mangoes, which comes to around Rs 1.8/kg.
They also pay commission to the commission agent of 6%. Thus the total cost incurred by the
contractor is around Rs 5. This includes wastage of around 6-8%. The contractors earn a
margin of around Rs 1/kg.
118
FINAL REPORT
The wholesaler bears the cost of transporting produce as well as loading and unloading
charges. He pays a marketing cess of 1.05%. The total expenses at wholesale level is around
3.5/kg and the margin realized by him is Rs 3.5/kg. Around 10% produce is wasted at retail
level and the retailers margin is around Rs 6/kg. The consumer price reaches to Rs 40/kg
Some of the salient features of the value chain are:
There are 3 intermediaries between the farmer and the consumer.
The marketing of mango in major producing talukas of Aurangabad mostly happens

through direct procurement at the farm gate. The local representative of the buyer in
destination market acts on his behalf for price fixation and harvesting schedule. Pre
Harvest Contractors take care of orchard till maturity and then dispatch the produce to
destination market based on demand.
Grading is mainly based on the size and maturity of the fruits. While grading, smaller
fruits are separated from the larger ones in order to achieve uniformity in specific
grades. Immature, overripe, damaged and diseased fruits are graded separately and are
sold to processing units. Transportation is mostly done by normal trucks in domestic
markets.
In case of domestic markets, wooden or cardboard boxes are used for packaging and
transportation of mango fruits. Size of the box varies to accommodate 5 to 10 kg. of
fruit depending on the size.
Fruits harvested at right stage of maturity are stored for about 8-12 days. In case of
export, storage life is further extended up to a maximum of three weeks under cold
storage at 12 -14C. Normally, fruits are not stored beyond 3 weeks as it affects the
taste and texture if stored for a
period more than 3 weeks.
Post Harvest loss in Mango is

estimated to be around 20%. The
relatively low post harvest loss is
also due to hardy nature of produce
and high processability. Grade C &
D are generally bought by the
processors which would otherwise
cannot be sold in fresh retail market.
The price realized by the farmer is around 27 paisa of a consumer rupee.
Wholesalers and retailers constitute around 9 paisa and 15 paisa of a consumer rupee.

Particulars
Sellingprice(Rs/Kg)
Pricespread
Farmer
6
0
17
11
Contractor
17
5
23
1
Wholesaler
23
3.5
30
3.5
Retailer
30
4
40
6
119
FINAL REPORT
16.2 INFRASTRUCTUREANALYSIS
A pack house by Jai Kisan Cooperative Society was set up in Harsul near Aurangabad, which
is closed now. A mango export facility centre has been built by the Maharashtra State
Agriculture Marketing Board in Jalna, which is about 60 km from Aurangabad. The pack
house was set up in 2005. Various facilities available at the pack house are as follows;
De-sapping tables: 5 nos.
Fork lifts: 2 nos.
Plastic crates: about 370 nos.
Wooden pallets: 120 nos.
Packing tables: 5 nos.
Pre-cooling: 5 MT
Cold storage: 2 nos. of 25 MT each
Ripening chamber: 5 MT
Charges for various facilities are as mentioned below;

Activity
ChargesinRs
Grading&packing
Rs.1perkg
Precooling
Rs.0.6perkg
Storagefor24hrs.
Rs.0.5perkg
Storageofpackingmaterial
Rs.1persq.ft.
During off season, the storage facilities are given

on rent for storage of dry fruits. Charges levied
are Rs. 12000 per month for each store of 25 MT
capacities. Ripening chamber is also used as a
cold store during off season and charges are Rs.
5500 per month for 5 MT
Culling/Sorting
capacity.
The facility is being used by mango exporters such as K.B. Exports,
MAHYCO, Jai universal etc. Quantity of mango handled by the pack
house is mentioned below:
Year
Quantity
Processed(MT)
61
63
13
QuantityExported
(MT)
32
46
10
The table shows that the

quantity
exported
is
2007
2008
lesser than total quantity
2009
processed in the pack
house. This shows the ratio of exportable produce to the total produce
procured of grade A. Remaining produce is sold in the domestic
market. The process flow in the pack house is shown in the diagram:
Some of the exporters have established their own facilities in the
neighbouring districts. For example, K.B. Exports, who was earlier
using the MSAMB pack house has set up its own facility in Nevasa,
Ahmednagar. This has resulted in decrease of capacity utilization of the
MSAMB pack house.
Hotwaterwash
Brushing/cleaning
Waxing
Drying
Grading
Packing
Precooling
Ripening
120
FINAL REPORT
the gaps and inefficiencies in the kesar mango value chain. A detailed structured survey was
undertaken to map the existing supply chain and identification of gaps at each stage, with
added focus on institutional, infrastructural and logistical barriers. After the detailed field
survey, the gaps identified were discussed with a range of key stakeholders to get their
feedback on the analysis and understanding of issues. Some of the gaps identified in the
value chain are:
Most of the mangoes produced in the region are plucked, graded and packed manually
at farm level. The quantity handled at the pack house is very less w.r.t to the total
production of mangoes in the district.
Chemical use for ripening in Mango is very limited as fruits automatically get ripened if
stored in ambient condition. However, to accelerate the ripening process, fruits are
dipped in Ethral solution, which helps in fruit ripening in 36-48 hrs.
Mango farmers are highly dependent on contractors for marketing their produce as well
as for credit/ advance payments, which reduces their bargaining power.
Farmers lack of market information about prices and demand of mango results in lower
value realization for them
The following interventions are proposed:
Setting up of a pack house for mangoes at Paithan spoke in Aurangabad district. The
pack house may have facilities for:
o
De-sapping
Washing: may include hot water treatment and fungicidal application.
Sorting/grading
Packing in corrugated boxes
Pre-cooling
Cold storage
Modern cold stores may be set up to store unripe mangoes. Mature green mangoes may
be stored at 13 degree Celsius and RH of 90-95%, which increases its shelf life by 1-2
weeks.
Ripening chambers may be set up at hub for uniform ripening of mangoes.
Mango should be transported in reefer vans to avoid physical and quality loss during
transit
121
FINAL REPORT
17 FOCUSCROP:ORANGE
Maharashtra produced 796,100 MT of orange in 2007-08 and the total area under cultivation
is 125,700 Ha making it the largest orange producing state of India. Maharashtra produces
about 55% of Indias total orange production. The state production of orange grew from
723,700 MT to 796,100 MT in 2006-07 and 2007-08 respectively. The average productivity
of orange in the state is 6.34 MT/Ha, which is close to the national average of 6.7 MT/Ha.
In Maharashtra, the major orange producing districts are Amravati, Nagpur, Yavatmal and
Akola, of which Amravati and Nagpur account for about 0.94 lakh hectares with production
about 5 lakh metric tonnes. The area and production of major orange growing districts in the
study region are as follows:
AREAANDPRODUCTION(20072008)
Production
#
District
Area(ha)
(millionMT)
1
Amaravati
51648
408584
2
Akola
4000
37768
TOTAL
55648
446352
Source:DirectorateofHorticulture,GovernmentofMaharashtra(FY200708)
The major orange producing blocks in Amravati district are Warud, Morshi, Achalpur,
Anjangaon and Chandur Bazaar. The major block in Akola is Akot in terms of orange
production. The variety is known as Nagpur orange and it is of a loose skin variety. The
variety can be processed into concentrate, jam, juice, etc. although technology (which is
available) is needed for the extraction of the seeds.
The production of orange is spread over two seasons namely Ambia bahar and Mrug bahar.
Ambia Bahar accounts for 30-40 % of the production. Arrivals for this seaons start in the
month of October and end in the month of January. Mrug Bahar accounts for the balance 6070 % of the production and it starts in the month of February and ends in the Month of April.
The quality of fruit in Mrug Bahar is reportedly superior and is suitable for long distance
transportation.
Fruits are harvested when they attain full size and develop
suitable colour (75% fruit surface colour changes from
dark greenish into yellowish). Picking of fruits is generally
done manually either in the morning or in the evening
hours without damaging the fruits. Generally harvesting is
carried out in either two plucking phases or single
plucking phase.
The supply chain of orange in the study region with the three different marketing channels is
depicted below:
122
The various players involved

in the value chain are farmers,
pre-harvest
contractors/aggregators,
commission agents, traders
and retailers. There is very
less export directly from this
region to other countries.
Some small volume is
exported to Bangladesh and
Nepal through Kolkata and
Patna markets.
FINAL REPORT
Farmer
Channel1
Channel3
Channel2
PreharvestContractor
Commissionagent
Trader
CommissionAgentinDistantmarket
RetailerinLocalMarket
Trader
RetailerinDistantMarket
Based on the point of sale, the
above supply chains can be classified into three types:
CONSUMER
At farm gate (Channel 1) Accounts for 60% of the produce
At APMC Mandis within production clusters (Channel 2) - Accounts for 35%
At Distant consumption market (Channel 3) Accounts for 5% of the trade
17.1.1 ValueChainActorsandFunctions
ValueChainActor
Farmer
Preharvest
Contractor
CommissionAgent
Trader
PhysicalFunctions
1. Cultivation
1. Harvesting
2. LoadingandTransportationof
theproducetothemarket
3. Paymenttothefarmer
1. Paymenttothefarmer
2. Weighing
1.
2.
3.
Sortingandgradingofthe
produce
Packaging
Loadingandtransportationto
consumptionmarkets
FinancialFunctions
1. PreharvestcontractswithPHCs
1. Pricecommunicationtothefarmer
2. Priceriskbetweenharvestingtosalein
theMandiordistantconsumptionmarket
3. Transitlosses
1. Pricediscoverybyauction
2. Credittothebuyer
3. CashAdvancestothefarmersduring
production
4. PaymentofcesstoAPMC
1. Priceriskinthedistantmarketasthereis
a3daygapbetweenbuyingandreselling
2. Sortinggradingandmoistureloss
3. Transitlosses
4. Creditriskinthedistantconsumption
market
Oranges in the region are propagated by budding. The

method of shield budding is the most popular method for
propagation. The square system is used for plantation of
oranges. The distance between plants is generally kept 20 ft.
An intensive care is taken of the planted nursery up to 5
years. The trees start getting economic yield from 6th year
onwards and the economic life of the trees is 12-15 years
depending on the maintenance.
Intercropping with pulses, soya bean, ground nut and chillies
is carried out generally up to the first 5 years. The production
of orange from a Ha of orchard is about 25-26 MT.
The cost of establishment of orange orchard is about Rs.
123
FINAL REPORT
52,000 3 per Ha.

The breakup of the cost is given below.
Activity
Labourcost(levelling,digging,weeding,
saplingplantation,manurespread,fillingetc)
Compostandfertlilizers
Pesticideapplication
Others
TotalinRs
CostperHa(inRs)
2770
6970
35000
4825
1000
1500
52065
The breakup of annual variable cost of cultivation of orange per Ha is given below.
S#
1
2
3
4
5
6
FieldOperations
Irrigation
Fertilizer+Labour
Pesticide+Labour
Intercultivation
Miscellaneous
Total
CostperHa(Rs.)
14000
26400
4375
22000
3750
3750
74275
There is no farm level grading or packing of orange irrespective of the marketing channel
used to market the product unless the farmers plan to sell their product in distant consumption
markets like Delhi, Mumbai etc by themselves. The
fruits are generally loaded into an open truck or tempo
and sent to mandi for sale. In the cases of Channel 1
and Channel 2, oranges brought from orchards by
various means of transport are properly heaped
without causing any damages on the auction platforms
covered with paddy straw in the market yards and
auctioned for price discovery.
Oranges are traded either in numbers or by weight. Each market has its own unit of trade. For
example, in Kalamna APMC Market yard in Nagpur
District, oranges are traded by weight while in Warud
APMC Market yard in Amaravati district they are
traded in numbers. The unit of trade in distant
consumption markets is generally by boxes or crates.
Price fixation between the farmer and the Pre harvest
Contractor (PHC) is done by negotiation. The PHCs
offer a price based on their information on price in the
market and on their understanding of the expected
supply. Generally, the unit of trade between the farmer
and PHC is in numbers. The PHC visits the orchards
and randomly selects some trees and the number of
fruits are counted and then extrapolated for the entire
33
Cost of land has not been taken into account for calculation of total cost of establishment of orange orchard
124
FINAL REPORT
garden. Though there is high approximation in this method, most of the farmers prefer to sell
through this channel as there are no marketing costs; harvesting is the responsibility of the
PHC and the price risk is with the PHC. Price discovery in the APMC market yards is by
Open Call Auction method.
In all the markets grading is done manually. The grading is done based upon the size of the
fruit. While grading is done based on size, sorting is carried out based on other physical
properties like colour, shape (oblong, high collared, deformed), maturity, puffiness,
blemishes, physical damage (bruised and diseased). Once the diseased and bruised fruits are
discarded, fruits are graded into 7 grades based on size. Traditionally, the seven grades have
been identified on the basis of number of fruits of a particular size that will fill exactly a
standard wooden box (details given below).
After grading the fruits are packed in either wooden boxes or in plastics crates. The standard
size of a wooden box is 18 x 12 x 12. This standard wooden box can carry 22-24 kgs of
fruit. The wooden box is fabricated on the spot by specially
appointed box makers. The fruits are stacked in layers in the
wooden box. Depending on the size of the fruit, the number of
layers vary from 4-6. To avoid friction between the layers of
fruits and to avoid moisture loss during transit each layer is
separated from the other with paddy straw and waste papers.
Once the fruits are filled, the top of the box is closed with the
same wooden sheets using iron nails. The box is then fastened using coconut fibre ropes.
They are then marked using water soluble permanent colour with the name of the trader so
that it can be identified in the destination market. Nearly 40% of the trade at present is
happening through wooden boxes.
As per trade, the use of plastic crates has increased in the last 4-5 years. Mostly, plastic crates
of 542 mm x 360 mm x 300 mm (outer diameter) are in use. This standard crate can carry 2225 kg of fruit. Though the return logistics cost adds to the cost of the product, the ease of
usage, easy availability and acceptance by trade in the destination markets has increased the
usage of plastic crates. Unlike wooden boxes, in case of the plastic crates, the fruit is not
arranged in layers. The fruits are loosely packed in the crate and the sides and top are covered
with waste paper. Then the paper is tied to the crate using nylon thread. The traders have their
brand name/ trade name stencilled on the sides of the crates for identification.
Apart from packing the fruits in wooden boxes and crates, oranges are transported in loose
without any packing to some markets like Hyderabad and Bangalore which are 400 Km to
500 Km from Nagpur market. When fruits are packed in truck directly, they are sorted only
for culling the bruised and damaged fruits. There is no size based grading. The fruits are
packed in layers in the truck with paddy straw, casuarina poles and bamboo mats on the sides
and in between the layers to avoid friction and pressure damage. The fruits are graded as per
125
FINAL REPORT
size in the distant consumption market. The cost of packing for each truck is around Rs. 7500
per truck.
17.1.2 GradesinOrange
#
1
Grade
ExtraLarge
Large1
3 Large2
4 Medium1
5 Medium2
6 Small
7 Waste
Gradename
aspertrade
96Dana
Actualnumber
offruits
96
141Dana
148
171Dana
191Dana
205Dana
245Dana
173
195
210
288
Layersoffruits
4layersof24each
4layersof30eachandone
layerof28
4layersof35eachandone
layerof33
4layersof39each
4layersof45each
6layersof48each
Sizeinmm
7580
7075
6570
6065
5560
5055
Allother
The traders in production clusters do not generally store the product. They operate in such a
way that the product reaches the destination market within 3 days of harvesting.
Transportation is carried out in ambient temperature in open trucks. Orange is generally not
stored for off-season sales in production clusters. If any trader wishes to store the product for
off season sale, the same is done in the distant consumption market.
A value chain, indicating the various activities in the value chain, actors performing the given
activity and cost build-up at every step has been mapped in this section. This value chain (for
1 Kg of orange) has been mapped for the supply chain having following characteristics:
The marketing chain follows Channel 2, i.e, Farmer to PHC to Commission Agent to
Trader to Commission agent in distant market to Trader/ retailer to Consumer.
The cost of production for the farmer is only the variable cost for maintenance of one
acre orchard per year. It does not include the cost for the first five years of orange
orchard where there are no returns.
The distant consumption market considered for this case is Azadpur APMC Mandi, in
New Delhi
The packing material is wooden box of standard dimension 18 x 12 x 12
Net weight of oranges in each box is 24 kg
Cost of capital and opportunity cost for the all the intermediaries has not been
considered in cost build up and for calculating the spread
The cost of retailing, which includes the cost of shop, wages, rent etc has not been
considered
126
FINAL REPORT
The prices considered are average prices for the month of October in Nagpur and Delhi
Market based on the data corroborated from traders. The same has been cross checked
with the data from National Horticulture Board 2007-08 statistics
Wastages have been accounted at the level of packaging only. The next level of wastage
is at the level of retailer, where data is not available
RetailersMargin
Marketcess,loading,
transportation
Rs3.00
Rs3.00
WholesalersMargin
Commissioncharges@8%
Rs1.89
Rs1.89
Loading,unloading,
transportationtoDelhi
Rs2.50
(RetailersPrice)
Rs.21.00
(WholesalersPrice)
Rs2.25
Rs2.25
Harvesting,loading,
transportation,unloading
Rs.24.04
Rs1.67
Wastage
Marketcess,Sorting,
grading,packaging
Rs0.60
PHCsMargin
Rs0.50
Rs1.12
Rs0.72
FarmersPrice
Rs0.65
Rs9.60
In the above value chain, after the sale of produce by the farmer, the harvesting, loading,
transportation to local market and unloading charges and commission are borne by the PHC.
The wholesaler bears the cost of sorting, grading and packaging along with the commission in
the distant market. The retailer pays for the final transportation, loading and market cess.
The above diagram can be summarized as below:
Particular
CostofProduction/Buying
SalePrice
CostofMarketingincl.CommissionAgentcharges,wastages,etc.
Spread
Farmer PHC
2857
9500
9500
12000
0
1380
6643
1120
Rs/MT
Trader/
wholesaler
12000
20925
7032
1893
The price buildup from Farmer to Consumer is almost two and half times.
There are 5 intermediaries in this case
While the intermediaries are making decent profits,

the cost benefit ratio for orange farmer at 1:2.3 is
also good.
The APMC mandi cess accounts for close to Rs. 335

per MT, which is close to 1.5 % of the final price
paid by the consumer
The share of consumers rupee by various actors in

the value chain emerges as below (in % of
Retailer
20925
24463
503
3035
127
FINAL REPORT
consumers rupee) :
17.2 POSTHARVESTINFRASTRUCTUREANDINSTITUTIONALARRANGEMENTS
There are very few farm level sorting, grading, washing and waxing facilities in the region. In
the entire study area, there are two orange related facilities. They have facilities for sortingwashing-waxing-grading lines, primarily set up for handling of fresh oranges for domestic
and export markets. The summary of these two facilities is provided in the table below:
Particulars
District
Ownership
sortingwashing
waxinggradingline
Precooling
Coldstorage
Packhouse
Loadingunloadingbay
Backuppower
Weighbridge
WorkerQuarters
Warud
Amaravati
OwnedbyAPMC,Warud
Morshi
Amaravati
OwnedbyAPMC,Morshi
Onelineof2MTperhour
Onelineof5MTperhour
5MTperbatch
30MT
Present
Present
Notavailable
Notavailable
Notavailable
yes,capacitynotknown
yes,capacitynotknown
Present
Present
NotAvailable
NotAvailable
Available,butindilapidatedstate
Thefacilitywaslyingidleformanyyears.
However,thefacilitywasusedbyonetrader,
SKCandCo,ofWarudatanominalpricein
200809.Interactionwiththetraderrevealed
thatthemanualgradingisbothcost
effective,andmoreefficient.Themechanical
gradinglineseparatesfruitsonthebasisof
sizeonly,whilethemanualgradingtakesinto
accountotherphysicalparametersofthe
fruitaswell.
Thefacilitywascreatedbya
privateentrepreneurin2006
andsoldtoAPMC,WarudatRs.
22lakhs.Lastyear,thefacility
wasgivenoutleasetoReliance
RetailandachargeofRs.65per
quintalwascollectedfrom
Reliance.Approximately200MT
ofproducewashandled
Usage
Cold Storage installations in the above facilities utilises both ammonia based and Freon DX
refrigeration systems. Pre coolers were all forced air type and evidenced minimal or no use.
The existing cold chain implementation is mostly unutilised.
Case:WarudPackHouse
IncaseoftheWarudfacility,whilstthetechnologyworkedperfectlywelltherewereanumberofbarrierstoits
useinthemarket:
Insufficientexportbusinesswasidentifiedasakeyimpedimentinfullutilisationofthefacility;
Thecustomerswhowouldbuyfromthisfacilitywerenotcorrectlyidentified.Themaintarget
customersweredomestictraders/wholesalers.Anexporterwouldwantgraded,packagedandpre
cooledproducebutthiswasntrequiredbydomestictradersandlocalmarkets;
Localtradersdonotneedprecooledorangeastheywerenotusingrefrigeratedtransport;
LocalAPMCmarketsdidnotwanttohandlealreadygradedorangesastraderspreferredtograde
themselves.
Consequently the facility was sold to the APMC market authority and has been used in previous years by a
supermarketchainforwashing,waxingandgrading.Theprecoolerandcoldstorewasnotused.
In terms of institutional mechanism for orange in the region, the growers cooperatives in the
region are in the nascent stage. MahaOrange is a marketing co-operative society registered
under the Maharashtra State Co-operative Societies Rules 1961. It is a federal body of orange
cultivators in the state of Maharashtra. It was formed in March 2008, with headquarters at
Nagpur. At present 11 block level co-operative societies are members of MahaOrange. Till
now, very limited volume of orange has been marketed by MahaOrange and the member
cooperative societies are also very small having 15-20 members in each society.
128
FINAL REPORT
Case:DirectMarketingtoOrganizedRetailChainbyFarmersGroup
In one location in Amravati district, visited during the field study, farmers had organised themselves into a
grouptosupplytoalargesupermarketchain.Thisrelationshiphadlastedonlyforaseasonmostlyduetothe
followingreasons:
Thesupermarketswantedonlythetopqualityorangemakingitdifficulttosellonlythelowqualityto
thelocalAPMCmarket;
Whilst prices paid from the supermarkets were originally acceptable, they later reduced the prices
makingitunattractivetothefarmers.
Based on stakeholders consultation, assessment of the orange value chain and existing post
harvest infrastructure present in the region, the following gaps were identified in the value
chain:
Very few farm level sorting, grading, washing, fungicidal treatment and waxing
facilities in the region. The existing facilities have a total capacity of about 20,000 MT
which accounts for less than 5% of the total production in the region. Existing cold
chain infrastructure in these facilities is mostly unutilized. There are no de-greening
facilities in the region.
Even the existing facilities are not operating at full capacity as the requirement for
domestic markets do not require such sorted, graded and packaged produce. The export
market has not been catered as yet, where higher prices may be obtained for these
services.
At APMC markets and other trading points in the region, packaging of orange is done in
wooden boxes for a substantial volume. This practice is costlier in the long term and
also has an adverse affect on the environment.
Packaging in wooden boxes and loose in trucks leads to wastage and loss of quality. As
per trade, the loss is in the range of 5-10%, which also includes loss in moisture during
transit. This loss is borne by the buyer in the distant consumption market, which is
factored into his buying price. While, similar level of loss is not reported in produce
packed in plastic crates
Orange processing has also not picked up in the region.
Based on the gaps identified in the value chain process and understanding the needs of the
various stakeholders, interventions have been identified. As mentioned earlier, the existing
pack houses with pre-cooling and cold store facilities have not been successfully functional
mainly due to reasons such as inadequate marketing/export linkages, cheap manual labour,
lack of refrigerated vehicles, etc. Hence, considering the present scenario in the region,
interventions are proposed keeping in mind the practicality of such interventions. As the first
step, 4 pack houses for orange in Amravati district are proposed. The proposed locations are
Warud, Morshi, Achalpur and Anjangaon. In case of Warud and Morshi, the existing facilities
129
FINAL REPORT
may be refurbished and leased out to private players for the operations. The pack houses will
have following facilities for tomatoes:
Sorting
Grading
Packaging in plastic crates
The pack houses at Achalpur and Anjangaon will handle banana as well. The details of the
facilities have been captured in the subsequent chapter.
130
FINAL REPORT
18 FOCUSCROP:LEMON
Maharashtra produced about 153000 MT of lemon in 2007-08 and the total area under
cultivation is 37300 Ha. The state ranks fifth in terms of production of lemon among Indian
states producing about 6.3% of Indias total production
of lemon. The state production of lemon grew from
139000 MT to 153000 MT in 2006-07 and 2007-08
respectively. The average productivity of lemon in the
state is 4.1 MT/Ha which is much lower than the
national average of 8.5 MT/Ha. The crop wise area and
production in the major districts in the region is given
below:
Crops
Lemon
Districts
Area(Ha) Production(MT)
Aurangabad
304
4864
Buldhana
908
8172
Amravati
500
4500
Akola
521
4689
Total
2233
22225
Source:DirectorateofHorticulture,
GovernmentofMaharashtra(FY200708
The main lemon cluster identified for the project

covers the blocks of Nandura and Khamgaon in
Buldhana district and Balapur block in Akola
district. These are contiguous blocks and together
account for about 70-75% of the total production
of lemon in these two districts.
Lemon is harvested throughout the year but peak

seasons are during the month of March-May (30%
of total production), August- October (30% of total production) and December- January (20%
of total production). The marketable surplus of lemon in the region is about 96%.
Operations relating to the movement of lemon shown in the pictures.
The diagram below explains the
major channels of trade of Llemon
in
the
Amravati-Aurangabad
region:
Based on the points of sale, the
Farmer
Commission
agent/Trader
Channel1
Channel2
Channel3
CommissionAgent
inDistantMarket
Wholesaler(Trader)
above supply chain can be classified into

RetailerinLocalMarket two types:
1. At APMC Mandis Channels 1

RetailerinDistant
Market
Consumer
(65-70% of the trade) and 2 (20131
FINAL REPORT
25% of the trade) Accounts for 90-95% of the produce

2. At local consumption market Channel 3 Accounts for 5-10 % of the trade
The major players involved in the trade of lemon are farmer, commission agent (local),
commission agent (distant market), wholesaler/trader and retailer. The major consumption
centres for the lemon for this region are Delhi, Mumbai and Raipur, which accounts for about
90% of the total export from this region. The roles played by each player in the value chains
are given below:
Farmer
The average orchard size of lemon in the study region is about 0.8 Ha. A Ha of orchard
accommodates about 250 plants (20 ft X 20 ft) which are maintained at a height of about 1012 feet. The plants start bearing fruit from the 3rd year. The cost of establishment of lemon
orchard is about Rs. 51,000 4. The breakup of the cost is given below.
Activity
Labourcost(levelling,digging,weeding,sapling
plantation,manurespread,fillingetc)
Compostandfertlilizers
Pesticideapplication
Others
TotalinRs
Costper
Ha(inRs)
12500
5000
25600
4800
1000
2000
50900
The breakup of annual variable cost of cultivation of lemon is given below.

PerHayearlyvariablecostforLemoninBuldhana
S# FieldOperations
Cost(Rs.)
1
Irrigation
1000
2
Fertilizer+Labour
5000
3
Pesticide+Labour
3000
4
18000
5
HarvestingLabour
25000
6
Miscellaneous
5000
Total
57000
Each plant produces about 100 kgs of lemon annually and per Ha average productivity of
lemon in the region is about 25 MT per annum in suitable conditions. After harvesting of the
matured fruit, farmers do the packaging in small gunny bag having a capacity of about 15
kgs. There is no sorting or grading done at the farm level. The bags are loaded in mini trucks/
auto-rickshaws/ pick-up trucks and brought to the commission agent in the nearest APMC
market. The cost of harvesting, local transport and commission to Commission Agent (CA)
(which is 5%) is paid by the farmer. The gunny bags used by farmers to bring the produce in
the market are taken back by him after sale of the produce and hence the packaging cost for
the farmer is negligible. The harvesting is done in the evening of the previous day of sale in
the market. The farmer stores the bags for the night at his home.
44
Cost of land has not been taken into account for calculation of total cost of establishment of lemon orchard
132
FINAL REPORT
CommissionAgent(CA)
There are about 8-9 CA cum traders operating in the region. In channel 1, CA acts as buyer
on behalf of the wholesaler (distant market). Orders are placed with him from the wholesaler
for specified quantity and quality of the produce. For facilitating trade between the farmer and
the wholesaler, the CA charges a commission of 5% of the value of the produce from the
farmers and collects APMC market cess of 1.05% from the wholesaler. In channel 2, CA acts
as buyer himself and sell through the commission agent in distant market to the traders/
wholesaler present there. In this case he bears the marketing and other expenses such as
grading, packing, loading, transport, unloading and 7% commission to the CA present in the
distant market (Delhi). In channel 2 he also bears the price risk.
The price discovery in the APMC markets is through open auction, where CA/traders quote
their prices on per bag basis. Before quoting the price the CA/traders randomly open 2-3 bags
from the lot to check the quality of the produce based on which quotes are made. The
CA/traders quote their prices on the basis of information of price in the distant markets.
Auctions are generally over by 11:00 AM. After procurement from farmers CA/trader pays
money to farmer on the spot. He receives the amount from the distant traders after 2-3 days of
sale depending upon the mutually agreed terms and conditions between CA and
trader/wholesaler. After the trade, all the bags are emptied in a heap under a shed in front of
the shop area of the CA/trader. The bags are then returned to the farmers. The lemon is then
sorted and graded based on colour and size. After the grading, the lemon is packed in gunny
bags again having a capacity of 15 kgs and then weighed. The inside of the bags are lined
with newspaper to hinder moisture loss and also to reduce physical damage during transport.
Then the produce is loaded on trucks (10 MT) for transportation to the distant markets.
CAinDistantMarket
He facilitates the sale of produce by the local CA and the wholesaler/trader. For his service of
organising the auction and market information, he charges 7% commission from the seller.
Wholesaler/Traders
They are the main buyers in the markets. Trader further sells the produce to the local retailers.
In channel 1, he bears the cost of grading, packing, loading, transport, unloading and
commission to CA.
Retailers
He is the major buyer in the consumption market and the direct point of contact with
customers. Retailer bears the cost of local transport from market to consumption point.
18.1.1 PricebuildupalongthevaluechainofLemon
A value chain indicating the various activities and cost build-up at every step has been
mapped for 1 kg of lemon. Some of the assumptions for the price build up are:
lemon, i.e. Farmer-CA-Wholesaler-Retailer.
133
FINAL REPORT
Farmers margin has been calculated based on his annual cost of maintenance of orchard.
The cost of establishment of orchard has not been taken into account.
The cost of interstate transportation has been calculated for New Delhi.
considered.
RetailersMargin
Wastages@5%
Rs5.20
Transportation
Rs1.23
TradersMargin
Loading&unloading
Rs0.20
Rs4.00
Wastages*@4%
(RetailersPrice)
Rs0.16
TransportationtoDelhi
Rs.24.60
Rs0.72
Rs0.72
Packaging
Rs.18.00
Rs2.00
Sortingandgrading
(TradersPrice)
Rs0.67
Marketcess@1.05%
Rs0.33
Rs0.10
Harvesting,loading,
unloading
Rs0.50
Rs0.33
FarmersPrice
Rs0.80
Rs10.00
In the above diagram, the farmer pays for the harvesting, local transport to APMC yard and
commission to CA. The farmer receives a price of Rs 10-12/kg (in peak season) and he
spends around Rs 2.3/kg in maintenance of the orchard. The net margin, which he gets after
bearing the marketing and other expenses, is about Rs. 6.00/kg. The commission agent
facilitates trade between farmer and wholesaler, for which it charges a commission of 5%.
The trader/wholesaler pays for the packaging, sorting, grading, APMC cess, loading,
transport and unloading. The trader/wholesaler also bears the wastages as moisture loss (2%)
and physical damage during transportation (another 2%). He gets a margin of about Rs.
4.00/kg. From them, the retailer buys the products and bears the cost for labour and transport
to their retail outlets. At this level the wastage is about 5%.
Particular
CostofProduction/Purchase
CostofMarketingincl.Commission
Agentcharges,wastages,etc.
SalePrice
Spread
Farmer
2286
1633
10000
6081
Rs/MT
Trader/Wholesaler
10000
Retailer
18000
3992
18000
4008
1432
24632
5200
There are 3 intermediaries between the farmer and the consumer in the lemon supply
chain (including the commission agent).
The price build up from farmer to consumer is around 2.5 times.
The farmer earns a margin of Rs. 6081 which is about 25% of the consumer rupee
134
Trader/wholesaler incurs a cost of around Rs 4000

per MT in various activities such as labour,
packaging, transportation, wastages etc. The
wholesaler earns a margin of Rs 4008 per MT that
is around 16 paisa of a consumer rupee.
The commission paid by the farmer to the

commission agent constitutes 2 paisa of a
consumer rupee.
The share of consumers rupee by various actors in

the value chain emerges as shown in the diagram
(in % of consumers rupee) :
FINAL REPORT
18.2.1 PostHarvest/MarketingInfrastructure
There is no post harvest infrastructure in the region for lemon. The initial packaging is done
at the farm level by the farmers. Manual sorting, grading and packaging is done at the APMC
markets under the sheds of the CA shops. Lemon is not stored in cold storages and the
produce is sent to distant markets on the day of sale itself. There is no farmers cooperative or
any other institution which is engaged in the marketing of lemon in the region. There are no
lemon processing units in the region at present.
On the basis of findings of field survey and stakeholders consultation, some of the gaps
identified in the value chain are:
No farm level sorting, grading and packaging facilities in the region. Packaging is done in
the open. Existing cold chain infrastructure in the region is not utilized for storage of
lemon. There are also no de-greening facilities in the region.
Sorting and grading at the APMC markets are done manually.
Packaging of lemon is done in gunny bags and it is done twice (once at farm level and
once at APMC markets). This practice is time consuming and the packaging is
inappropriate resulting in higher losses.
Lemon processing has not picked up in the region. As mentioned, there is no processing
facility in the region.
Based on need-gap assessment and exploring the opportunities for future growth, potential
areas for intervention for lemon in the region are:
Considering the distribution of production clusters in the region, Buldhana and Akola
(total production of lemon in these two districts is about 13000 MT annually) are the two
135
FINAL REPORT
districts where value addition of lemon can be done in a significant scale. Assuming 20%
of the produce in these two districts is subject to value addition, there is a need to create
infrastructure to handle 2,000-3,000 MT of lemon annually.
Significant volume of production happens during the rainy season and creation of farm
level platforms and sheds may be a suitable intervention to protect the produce from rain
during packaging.
Potential for setting up sorting and grading facilities at spoke level.
136
FINAL REPORT
19 FOCUSCROP:BANANA
While Jalgaon, Hingoli, Nanded, Beed, Parbhani and Pune are the major districts in banana
production, Amaravati, Akola and Buldhana, the three districts of Aurangabad- Amaravati
region also have some banana production. The area and production of banana in the
catchment region of this region are presented in the table below:
The main banana growing
cluster in Amravati region
consists of Anjangaon block
which covers about 80% of the
total production of the district.
Sangrampur block in Buldhana is again the largest banana growing cluster in the district
having about 80% of the total production of the district. In Akola, Akot block is the main
banana growing cluster.
# District
Area(Ha)
Production(MT)
1 Amaravati
394
23640
2 Akola
600
30000
3 Buldhana
700
42000
Source:DirectorateofHorticulture,GovtofMaharashtra(FY0708
The supply chain of banana in the study region is depicted below:
The various players involved in the value chain are
farmers,
pre-harvest
contractors/aggregators,
commission agents, Wholesalers and retailers.
Farmer
Preharvestcontractor
When the fruits are ready for harvest, the farmers
visit the banana supplying company/commission
agent and requests for the price. The board price,
BananaSupply
which is the price linked to the price declared by
Co/Commissionagent
Banana Marketing Federation, Raver, Jalgoan
district is declared to the farmers. The farmer, then
WholesalerinConsumptionmarket
requests the commission agent to visit the farm and
inspect the quality of the fruits. The commission
Retailer
agent in turn sends the pre-harvest contractor in the
village/block of the farmer to visit the farm and
Consumer
report the quality of the fruit. This chain of activity
starts with the farmer requesting the pre-harvest contractor in his village to visit his farm and
who in turn contacts the commission agent for price and requirement for the day.
The commission agent is in contact with the wholesalers in the consumption markets who
place the orders depending on demand in their markets. The commission agent on getting a
confirmed order from the wholesaler, in turn instructs the pre harvest contractor to visit the
farm to match the supply (quality and quantity of produce) with demand and to arrange for
harvesting. The commission charges of the commission agent vary from region to region and
market to market. In case of Anjangaon in Amaravati district, the commission agent charges
6.25% as commission charges to the farmer and Rs. 16.25 per quintal as service charge to the
buyer. The service charges are independent of the prevailing price in the market. Harvesting
cost, transportation to the main road for loading into the vehicle, weighing charges, pre137
FINAL REPORT
harvest contractor expenses are borne by the farmer. A typical cost build up for one Kg of
banana in the region is indicated below:
RetailersMargin
Wastages
Rs2.20
Transportation
WholesalersMargin
Rs0.25
Valueaddition
Ripening
Labourcharges
Weightlosses&other
losses
Rs0.17
Rs0.17
SecondaryTransport
CommissionCharges
fromBuyer
Rs2.20
APMCCess
Harvesting&
Transport
FarmersPrice
Rs1.00
Rs.14.50
15.50(Retailers
Price)
Rs.11.75
(WholesalersPrice)
Rs0.16
CommissionCharges
fromfarmer
PHCServiceCharges
Rs0.96
Rs1.33
Rs1.05
Rs0.02
Rs0.28
Rs0.16
Rs0.25
Rs5.90
*The cost of cultivation is lower in this region as compared to Jalgaon region due to lower land lease
rentals and non-inclusion of harvesting cost
19.1.1 ValueChainActorsandFunctions
ValueChainActor
Preharvest
Contractor
Commission
Agent
Wholesaler
PhysicalFunctions
Part of the information network for the

commission agent
Arranging labour for harvesting
Loading and Transportation
Responsible for delivery of quality of

the product as required by the buyer
Weighment
Supply of banana as per the quality and

quantity requirements of the buyer
Payment to the farmer
Payment of cess to APMC collected

from the buyer
Arranging labour and vehicles for

transport
Transportation to the consumption

markets
Unloading
Ripening
FinancialFunctions
Price communication to the farmer
Guarantor of payment to the farmer

as he is the local person
Price Communication
Credit to the buyer
Price risk in the distant market as

there is a 3-6 day gap between
buying and reselling
Losses during ripening and other
processes
Transit losses
Credit risk to the retailers
There are some ripening units in the region (details given in the following section). In case of
ripening units, the wholesalers in consumption markets like Nagpur, Buldhana, Warud
contact the ripening unit and place order indicating the quality requirements and delivery
date. On receipt of order from the wholesalers, the ripening unit contacts the farmers through
the pre-harvest contractors to identify farm(s) of suitable quality. At present the ripening units
are catering to markets within 300 to 400 Kms radius from Amaravati.
138
FINAL REPORT
The board price is communicated to the farmer and if the farmer

agrees to the price, the ripening unit arranges for harvesting, dehanding, washing in alum solution, treatment with 2% Bavistin
solution and loading into crates. Water for washing the fruits is
provided by the farmer at the farm and the utensils, which are
large aluminium vessels, for washing are provided by the
ripening unit. Once, the fruits are washed and treated each crate
is loaded with 20 kg of de-handed banana. The crates are lined
with plastic felt to avoid abrasions to the produce during
transportation.
The cost of harvesting is borne by the farmer. The commission EthrelSprayingPump
to pre-harvest contractor is borne by the wholesaler. The cost of treatment is borne by the
ripening unit and factored into the service cost. The cost of transportation is borne by the
wholesaler and is fixed based on distance. The cost of transportation in a radius of 70 km is
Rs. 10 per crate. The rent for crates is borne by the wholesaler and is factored in the ripening
cost. However, if the wholesaler provides his own crates, then a discount of Rs. 7 is given in
the ripening services cost. The service cost for ripening is Rs. 55 per crate of 20 kg. The
breakup of the service charges for one 20 kg crate is as below:
1
2
3
4
5
6
7
8
9
10
11
12
13
Parameter
LocalTransport
Farm
operations
Washing, dehanding and

fungicidetreatment
Loading, unloading and
deliverycharges
Telephonecharges
KitchenCharges
Powercharges
Stationerycharges
Rentforcrates
MaintenanceCharges
Chemicalcosts
Lodgingandothercharges
Costofplasticfelt
ProfitforRipeningunit
Total
(Rs.)
10
10
3
1
1
2
1
7
1
1
1
5
10
55
Once the produce reaches the ripening unit, the crates

containing fruits are arranged on the floor and ethrel
solution is sprayed on the fruits using an insecticide
spraying hand pump. The fruits are then shifted to the
cold room, which is kept at 18 degrees Celsius. The
crates are arranged one over the other till the roof,
leaving a space for one crate and are then covered by
a plastic sheet. The fruits are left covered with the
plastic sheet for one day and then shifted to another
cold room at 18 degrees Celsius. The fruits are kept
for 3 to 4 days depending on the customers
requirement. The fruits turn golden yellow on the 4th
day and are then loaded into trucks and transported to
the consumption markets.
Utensilsusedforwashingfruits FruitsArrangedinCrates
139
FINAL REPORT
These ripening units have positioned themselves as service providers and do not take any
risks of quality of the product and the price risk. Further, there is a moisture loss of 0.5 kg per
box (box of 20 kg) during the ripening and post ripening handling which is borne by the
RipeningChamber
CratesArrangedinthe Crates coveredwithplasticPlasticC overremovedand

thelothas beenlabelled
coldroom
cover 1dayold
wholesaler. The ripening units encourage the wholesaler to appoint his own person to oversee
the buying, transportation and ripening activities. When such a person is appointed by the
wholesaler they give a discount of Rs.2 per crate on the ripening service charges.
The ripening units collect a security deposit from the wholesalers to avoid any risk on account
of non-lifting of the ripened product. While it may appear that the pre-harvest contractors are
not adding any value, the trade feels that being local people they form an important link to
establish credibility of the farmers.
As per trade, the wholesalers are able to sell the
bananas ripened in ripening chambers at a premium
of Rs.1 to 2 per Kg as compared to produce ripened
by traditional methods. The trade also feels that the
product quality is better because of lesser handling
and better ripening method. The fruit remains on the
pedicel longer by two days and hence, the losses at
Ripened Bananas 4dayold
retailer level are lower in comparison to traditional
methods. Since the fruit has better colour and finishing, the product gets a premium over
other bananas. The retailers are able to sell the product at a premium of Rs.1 to 2 per kg.
However, the marketing of these bananas has not been welcomed by all. Retailers of bananas
ripened through traditional methods have reportedly damaged the crates of such retailers
and they are not being allowed to sell the produce in Nagpur.
While, the ripening chambers are a vast improvement compared to the traditional methods,
there is scope for improvement in ripening process and handling methods followed by the
ripening chambers.
For ripening, the ripening units are still using ethrel solution to induce ethylene production,
which is not safe. Ethylene generators can be used by these units. Further, there is no
palletisation. All the crates are handled individually, which increases the cost of labour.
Palletisation can bring more efficiency in the handling.
A typical cost build up in the region for one Kg of banana ripened using ripening chambers is
indicated below:
Comparing the ripening chamber method with traditional ripening methods, one ripening unit
of 20 MT per day can achieve the following:
Ripening facility for produce of 120 Ha
140
FINAL REPORT
Alternative market linkages for over 150 farmers (assuming average land for banana
production per farmer is around 1 Ha)
Handle 6000 MT of banana annually (assuming 300 working days)
Reduce the losses on account of moisture loss and transit losses from 25% to 12%
Increase the farmer realisation by 12% compared to traditional market linkages
Create additional employment for over 200 people
Increase the realisation of retailers, who typically use push cart for retailing and earn
less than Rs.150 per day, by over 100%
RetailersMargin
Wastages
Tertiary
Transport
WholesalersMargin
TransporttoConsumption
Market
Rs3.50
Weightlosses
Rs3.10
Rs0.60
Rs0.30
Rs.1617
(RetailersPrice)
Rs0.75
Rs0.75
ProfitofRipeningUnit
Servicechargesby
RipeningUnit
Rs0.50
APMCCess
TransporttoRipeningUnit
Rs0.32
Rs.13.50
(WholesalersPrice)
Rs1.75
Rs0.02
PHCServiceCharges
Rs0.50
Harvesting
Rs0.16
FarmersPrice
Rs0.05
Rs6.00
19.2.1 PostHarvestInfrastructure
There is not much post harvest infrastructure present in the region for banana. There is no
storing facilities and almost negligible cold chain infrastructure. Sorting and grading is
minimal and mostly done manually. There are two private banana ripening units in the study
region. They are Mittal Fruit Ripening Services and Utsav Kela Suppliers and Ripening
services. Mittal Fruit Ripening Services has been the pioneer in the region. They had set up
the banana ripening chambers in 2005 and have standardised the process. At present they
have a ripening capacity of 40 MT per day. Seeing the success of Mittal Fruit ripening
services, Utsav Kela Suppliers and Ripening Services has been set up in May 2009 with a
ripening capacity of 20 MT per day. As per trade, there is one more ripening unit under
construction in Anjangaon. There is no farmers cooperative or any other institution which is
engaged in the marketing of banana in the region.
141
FINAL REPORT
Based on the need gap analysis and stakeholders consultation, the following gaps are
identified in the value chain:
As in Jalgoan area, in this region too, traditional methods of post harvest mechanism
leads to damage of fingers. Similarly, there is a lack of farm level collection centres and
pack houses
There is no contract farming system in the region. Pre-harvest contractor can be replaced,
with contract farming arrangements. Capacity building of farmers and ripening units to
enter into contract farming system may be taken up
The existing ripening chambers use dated technologies. They can be upgraded with
ethylene generators, ethylene scrubbers, automated temperature control, palletisation
facilities etc
19.4 POTENTIALINTERVENTIONS
The interventions proposed here are similarly to that proposed in the Jalgaon area. There is a
good potential of integrated pack hoses with de-handing, washing and de-sapping, sorting,
grading, fungicidal treatment and packaging facilities. Two pack houses for banana in are
proposed in the region with the above facilities. The proposed locations are Anjangaon in
Amravati district and Sangrampur in Buldhana district.
142
FINAL REPORT
DPR:AURANGABADAMRAVATI
INTEGRATEDVALUECHAINPROJECT
Spoke
Warud
Spoke
Anjangaon
Spoke
Akola
Spoke
Sangrampur
Spoke
Jalna
Spoke
Pachod(Paithan)
Spoke locations
Warud
Sangrampur
Anjangaon
Akola
Jalna
Paithan
143
FINAL REPORT
20 SPOKE:WARUD
Warud has been identified as a spoke due to its proximity to the major orange growing
regions in Amravati district. It is also well connected by roads to major cities such as Nagpur
and Amravati and hence can act as feeder to these major orange trading hubs. It lies on the
intersection of State Highways 10, 244 and 248. State Highway 10 connects Warud to
Amravati and State Highway 248 connects it o Nagpur.
Proposed aggregation points are as follows:
AggregationPoints
Jarud
Bihoda
Themburkheda
Loni
Rajurbazar
Jamgaon
Morshi
FocusCrop
Orange
Orange
Orange
Orange
Orange
Orange
Orange
All the aggregation points are within a radius of 15 Km from the spoke except Morshi which
is at a distance of about 30 Kms.
The major fruit grown in the catchment of Warud is orange. Warud block in Amravati is the
largest orange growing clusters in the district. Focus crop for the proposed facility in Warud
are orange and banana.
Throughputs have been estimated based on present production in the catchment area, the
present capacities of existing similar infrastructures/facilities, potential for interventions, and
stakeholders consultations. The spoke and its catchment area produce about 0.2 million MT
of oranges annually, which accounts for around 50% of the total production of oranges in the
district. The spoke is expected to handle 10,000 MT of the focus crop which is less than 1%
of the total production in the catchment areas.
Spoke
Orange
Warud
10000
season as follows:
Crops
Jan
Feb
Mar
Apr
Orange
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Facilities have been designed on the basis of requirement of the focus crops, to induce better
and efficient handling practices and faster evacuation of fresh produce to the consumption
markets so as to ensure better quality to the consumer. While deciding on the capacities,
144
FINAL REPORT
existing facilities, their capacities and utilization has also been taken into account. The
proposed new facilities are as follows:
20.2.1 AmbientOrangePackhouse
As mentioned earlier, the existing pack houses in the region with pre-cooling and cold store
facilities have not been successfully functional mainly due to reasons such as inadequate
marketing/export linkages, cheap manual labour, lack of refrigerated vehicles, etc. Hence,
considering the present scenario in the region, ambient interventions are proposed keeping in
mind the practicality of such interventions. In the ambient packing house for orange
following infrastructure will be provided:

Vehicle Parking areas.
The capacity of the pack house will be 100 MT/day and it would
employ for than 60 labourers for the operations.
OrangeProcessFlow:
Process flow for the orange in the pack house shall be as shown:
Technology/
Facilities
QualityCheck
Sorting and
Grading
Packing
Transport
Description
Qualityofthefarmproducesshallbeassessedatthepackhousebasedoncertaincriteria
Manualsortingandgradingissuggested.Sortingandgradingtablesareproposedinthe
packhouse.
Packagingtableswouldbeprovidedformanualpackingoforange.Plasticcrateswouldbe
usedforpacking.
Produceshallbetransportedinnormaltrucksof10/15MTcapacity.
AggregationMechanismforthePackhouse
The pack house shall receive material from various aggregation points as well as directly
from the farms. The pack house will develop an aggregation mechanism and send
trucks/pick-ups to the aggregation points for collection of produce. It will establish direct
relationship with farmers and provide extension and training support to them for best farming
practices, better post harvest handling practices, efficient use of inputs and technology
transfer etc. Farmers will be encouraged to come together as producer companies and set up
and manage aggregation points wherever possible. Pack house may also invest in developing
145
FINAL REPORT
PackhouseLogistics
of transport such as trucks (4 MT), vans, tractor trolleys, etc. Expected peak arrival of
vehicles is about 20 per day. The average out-going vehicles at peak of 10/15 MT capacity
will be 8-9 per day. Small capacity field vehicles, load 800kgs to 1MT, are incorporated in
the project to serve as feeders from local farms or aggregation points as backward integration.
These vehicles can be with insulated body deploying pre-cooled chill packs. This is foreseen
to increase field reach, hence enhancing catchment range.
20.2.2 DryWarehouse
A dry warehouse of 2000 MT capacity is also proposed. It will be used for storage of pulses
and soyabean which is abundantly produced in catchment of cluster.
20.2.3 Addon/CommercialFacilities
There will be other facilities/amenities:
Business Centre
Parking Area
Canteen
Weigh Bridge
DG Rooms
Other amenities
146
FINAL REPORT
21 SPOKE:ANJANGAON
Anjangaon has been identified as a spoke due to its proximity to the major orange and banana
growing region in Amravati district. It is well connected by road to cities such as Amravati
(76 km) and Akola (75 km) which are in turn connected by good road and railway network to
big destination markets of Mumbai, Pune, Kolhapur, Nagpur, Indore and also to distant
markets such as Rajkot, Delhi, Kolkata and other cities. Anjangaon is also connected to
Murtijapur, which is a station on BhusavalNagpur section of Central Railway.
Proposed aggregation points and their distances from the spoke are as follows:
AggregationPoints
Pathroth
Pandri
Anjangaon
Karla
Bhandaraj
Lokhed
NimkhedBajar
FocusCrop
BananaandOrange
BananaandOrange
Banana
OrangeandBanana
Orange
Orange
Orange
Distance(inKms)
10
5
1
10
7
4
8
All the aggregation points are within a radius of 15 Km from the spoke.
Major fruits grown in the catchment of Anjangaon are orange and banana. Anjangaon block
in Amravati is the largest banana growing cluster in the district having about 80% of the total
production of the district. As per the field survey, the spoke and its catchment produces
around 60,000 MT of banana annually.
Focus crops for the proposed facility in Anjangaon are orange and banana. Since the spoke is
located in the fruit producing belt, a viable volume (that is less than 1% of the districts
production) has been targeted. Estimated throughputs have been identified based on present
production in the catchment area, the present capacities of existing similar
infrastructures/facilities, potential for interventions, and stakeholders consultations.
Spoke
Anjangaon
Orange
Banana
10000
5000
season as follows:
Crops
Jan
Feb
Mar
Apr
Orange
Banana
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
As shown above, the facility would receive year round supply of fresh fruit and hence,
capacity utilization of the pack house would be ensured throughout the year.
147
FINAL REPORT
Facilities have been designed on the basis of requirement of the focus crops, to induce better
and efficient handling practices and faster evacuation of fresh produce to the consumption
markets so as to ensure better quality to the consumer. While deciding on the capacities,
existing facilities, their capacities and utilization has also been taken into account. The
proposed new facilities are as follows:
21.2.1 BananaPackHouse
A pack house with a capacity of 40 MT per day is proposed at each of the spokes.
3
5
5
5
1
5
5
5
1. Receiving Dehanding Area

2. Preliminary
Wash Tank
3. Secondary
Flotation Tank
4. Air Brush,
Weighing
5. Retail Packing,
Stickers
6. Box inspection
7. Palletisation Area
8. Dispatch direct or pre-cooler
It is expected that such a facility would employ 165 workers over two shifts.
Banana incoming in bunches or as precut clusters from farms/aggregation points.

Bunches are cut into hands and crown flower removed (as required).
Water is used as transport mode (pumps with high pressure nozzles on one end are
used).
Hands preliminary wash tank; wash eliminates field dirt, latex overruns and pesticide
residue.
Before second tanks, each bunch is cut into packing clusters and inspected.
Secondary wash tank; fungicide wash is affected.
At end of secondary wash, bananas are removed and placed into trays onto roller
conveyors. Each tray is weighed and holds a packing unit load.
As it moves down the conveyor, they are air dried (hand held nozzle), and stumps can
be sealed with paraffin wax. Currently stump sealing practice not prevalent for local
market in India.
Thereafter the box packing takes place. Carrier trays are returned to weighing table
After boxing or loading onto transport crates, the palletisation and subsequent staging
is done.
Enough space is provided in this area to allow extension of previous lines in future.
The staging area can also later be extended (per need).
While optimally, the boxes can travel on conveyors to spread across width of facility
for more packers, to keep cost low, this plan is suggested for initial use.
cardboard.
148
FINAL REPORT
BananaProcessFlow:
Typically banana would be pre-cooled only for exports and that too in transit
containers.
Where bananas are for domestic consumption, they would move to destination
ripening centres.
Where bananas are for local consumption, they would move directly to ripening
chambers at HUB (possibly on conveyors) from here to ripening room on same
facility.
As banana pack house utilizes water as

transport mode (design pack house uses
50,000 ltrs daily), appropriate water
treatment and recharge systems are
incorporated. The recycled/treated water
can be used for sanitary purposes or stored
for field irrigation uses.
To introduce cable conveyor system, the
receiving area would incorporate a rotating
cable array. Here the hands would be unloaded and suspended from the cable, leading to the
de-handing workers. The stake is returned on cable for subsequent disposal. Organic waste
can be returned to banana fields to be converted to humus.
Technology
/ Facilities
Packaging
Ripening
Storage
Transport
Description
Sortingandgradingbasisfingerlength,shape,colour,etc.
Ripeningtemperatureis15C20Cwith9095%RH).
Bananastorageisatatempof13C14Cforaperiodof3weeksinethylenefreeair.
Fordomesticpurpose,transportationthroughbothmodes80%byrailwagonsandrest
of20%isthroughroadinnormaltrucks(89MT).
AggregationMechanismforthePackhouse
The pack house shall receive material from various aggregation points as well as directly
from the farms. The pack house will develop an aggregation mechanism and send
trucks/pick-ups to the aggregation points for collection of produce. It will establish direct
relationship with farmers and provide extension and training support to them for best farming
practices, better post harvest handling practices, efficient use of inputs and technology
transfer etc. Farmers will be encouraged to come together as producer companies and set up
and manage aggregation points wherever possible. Pack house may also invest in developing
149
FINAL REPORT
PackHouseLogistics
of transport such as trucks (4 MT/10 MT), vans, tractor trolleys, etc. Expected peak arrival of
vehicles is about 10 per day. The average out-going vehicles at peak of 10/15 MT capacity
will be 5-6 per day. Small capacity field vehicles, load 800kgs to 1MT, are incorporated in
the project to serve as feeders from local farms or aggregation points as backward integration.
These vehicles can be with insulated body deploying pre-cooled chill packs. This is expected
to increase field reach, hence enhancing catchment range.
21.2.2 AmbientOrangePackhouse
As mentioned earlier, the existing pack houses in the region with pre-cooling and cold store
facilities have not been successfully functional mainly due to reasons such as inadequate
marketing/export linkages, cheap manual labour, lack of refrigerated vehicles, etc. Hence,
considering the present scenario in the region, ambient interventions are proposed keeping in
mind the practicality of such interventions. In the ambient packing house for orange
following infrastructure will be provided:

The capacity of the pack house will be 100 MT/day and it would
employ for than 60 labourers for the operations.
OrangeProcessFlow:
Process flow for the orange in the pack house shall be as depicted in
the diagram:
Technology
/Facilities
Description
Quality
Check
Quality of thefarm producesshallbe assessedatthepack housebasedoncertaincriteria

Sorting and
Grading
Manual sorting and grading is suggested. Sorting and grading tables are proposed in the
packhouse.
Packing
Packagingtableswouldbeprovidedformanualpackingoforange.Plasticcrateswouldbe
usedforpacking.
Transport
Produceshallbetransportedinnormaltrucksof10/15MTcapacity.
The ambient pack house will also have aggregation mechanism similar to the banana pack
house. Here, the average number of incoming vehicales at peak season would be 20 per day.
The average out-going vehicles per day at peak season would be 8-9 per day.
150
FINAL REPORT
details). Ethylene generators would be utilised for appropriate dosing of the catalyst.
21.2.4 DryWarehouse
which is abundantly produced in catchment of cluster.
21.2.5 Otherfacilities
There will be other facilities/amenities such as:
Business Centre
Parking Area
Canteen
Weigh Bridge
DG Rooms
Other Amenities
151
FINAL REPORT
22 SPOKE:AKOLA
Akola has been identified as a spoke due to its strategic location in the middle of a major
pulses and soyabean growing region. It is also well connected by road and railway network to
Mumbai, Pune, Kolhapur, Nagpur, Indore and also to distant markets such as Rajkot, Delhi,
Kolkata and other cities. The National Highway- 6 which connects Hajira (Surat) to Kolkata
runs through Akola. Akola railway junction is situated on Mumbai-Wardha-Nagpur-Howrah
railway line.
Akola region is a major producer of pulses such as arhar (pigeon pea), Bengal gram and
mung (green gram) and soyabean and it acts as a major trading centre of the same as well.
The district produces around 89,000 MT of pulses annually. Since the region does not
produce substantial volumes of perishables, pulses and soyabean have been considered as the
focus crop for this spoke. The focus crops and estimated throughputs have been identified
based on present production in the catchment area, the present capacities of existing similar
infrastructures/facilities, potential for interventions, and stakeholders consultations. The
spoke is targeted to handle less than 1% of the total production in the catchments, which
would ensure financial viability of the project. The focus crops and the estimated annual
throughput of the spoke in MT are as follows:
Arhar
BengalGram
Moong
Soyabean
3500
2500
1000
3000
The arrival pattern of the focus crops for the spoke will be as follows:
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Arhar
BengalGram
Moong
Soyabean
The region has a shortage of dry warehouses and the farmers/traders/millers face a shortage
of storage facilities during peak season. Moreover, there are almost no modern warehouses in
the region with proper de-humidification facilities, ventilation system or vermin proof guards.
Also, the existing warehouses are all conventional in nature with no proper de-humidification
facilities, ventilation system or vermin proof guards. Most of the buildings observed may not
have passed a HACCP certifying process. Moreover, there are very few modern grading and
packaging facilities in the region. Considering these aspects, the following facilities are
proposed in the spoke.
152
FINAL REPORT
22.2.1 DryWarehouse
A modern dry warehouse of 5000 MT is proposed at the spoke. It will be used for storing of
mainly arhar, bengal gram, moong and soyabean depending on the season and demand.
22.2.2 AmbientPackingShed
In the ambient packing shed following infrastructure will be provided:

Cleaning and grading areas
Packaging area and store
The option of the warehouse facilitating HACCP certification and increasing the value of the
product will be explored. To aid operational and process compliances, funds have been
allocated towards HACCP certification.
ProcessFlow:
The process flow of the produces handled in the pack house is
depicted below:
Technology/ Description
Facilities
Quality
Check
Qualityofthefarmproducesshallbeassessedatthepack
shed mainly based on moisture content. The ideal
moisture content for pulses is 12%. Anything more than
thatwouldrequiredryingbeforefurtherprocessing.
Drying
(if Drying of the produce would be done using mechanized
drier
required)
Cleaning/De
stoning
Grading
Packaging
Produce will be cleaned of stones, leaves and other

impuritiesinamechanizedcleaner/destoner
Mechanizedgradingwouldbecarriedoutbasedonsizeof
thegrain
Manualpackingoftheproducein50/100Kggunnybags
PackShed/WarehouseLogistics
Farmers will bring the produce from pack shed/warehouse in various modes of transport such
as trucks (4 MT), vans, tractor trolleys, etc. At peak of operations, about 8-10 incoming
tucks/vehicles of an average of 4 M capacity will be coming to the pack shed/warehouse. The
outbound trucks would include about 3-4 normal trucks of 10/15 MT.
Inefficient logistics flow also hampers waste removal and other internal services. The master
plan caters to such peak traffic flow as it has been observed that bottlenecks in existing
infrastructure were largely due to under capacity parking and road network within facilities.
153
FINAL REPORT
22.2.3 BusinessCentre
A Business Centre is proposed in the spoke which will have the administrative rooms. There
will also be some rooms/sections which may be rented out to reputed NGOs or local
organizations etc as office spaces. Local district level government offices will also ensure
utility and regular interaction at location. These could include local passport offices, tax
centre, land records office, family planning centre, etc.
There will be also other facilities/amenities such as:
Parking Area
Canteen
Weigh Bridge
DG Rooms
Other Amenities
Given the nature of establishment, appropriate fire hazard proofing in form of CO2
smothering systems, fire alarms and evacuation routes are also proposed
154
FINAL REPORT
23 SPOKE:SANGRAMPUR
Sangrampur has been identified as spoke location due to its connectivity to major
consumption areas. Sangrampur falls in Buldhana district and is located at about 90 km from
district headquarter and is connected to all thirteen talukas by all weather road. It is connected
to state capital by road. It is also located close to important consumption markets like
Aurangabad, Pune, Amravati and Nagpur. Apart from the connectivity to the consumption
markets, Sangrampur is also proximate to the production clusters of Banana and Lemon.
Proposed aggregation points for the spoke and their approximate distance is as follows;
AggregationPoints
FocusCrop
ApproximateDistance(Kms)
Kakanwada
Banana
Nandura
Lemon
40
Khamgaon
Lemon
50
Major fruits grown in the catchment of Sangrampur are banana and lemon. Sangrampur block
in Buldhana is again the largest banana growing cluster in the district and accounts for about
80% of the total production of the district.
Focus crops for the proposed facility in Sangrampur are banana, lemon and pulses. Estimated
throughputs have been identified based on production statistics in the catchment area,
capacities of existing similar infrastructures/facilities, potential for interventions, and
stakeholders consultations.
Spoke
Banana
Lemon
5000
2000
Sangrampur
season as follows:
Crops
Jan
Feb
Mar
Apr
Banana
Lemon
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
As shown above, the facility would receive year round supply of fresh fruit and hence,
optimum capacity utilization of the pack house would be ensured throughout the year.
It is proposed to set up Banana pack house at the spoke. Facilities have been designed on the
basis of requirement of the crop, to induce better and efficient handling practices and faster
evacuation of fresh produce to the consumption markets so as to ensure better quality to the
155
FINAL REPORT
consumer. While deciding on the capacities, existing facilities, their capacities and utilization
has also been taken into account. Details of proposed facilities are as follows:
23.2.1 PackHouse
A pack house with a capacity of 40 MT per day is proposed at the spokes. Various
components of proposed facilities in the pack house are outlined below.
3
5
5
5
1
5
5
3
5
3
1. Receiving
De-handing
Area
2. Preliminary
Wash Tank
3. Secondary
Flotation
Tank
4. Air Brush,
Weighing
5. Retail
Packing,
Stickers
6. Box inspection
7. Palletisation Area
8. Dispatch direct or mobile pre- cooler
It is expected that such a facility would employ 164 workers over two shifts. The process
flow of material handling at the pack house is outlined below.
Banana incoming in bunches or as pre-cut clusters from farms/aggregation points.

Bunches are cut into hands and crown flower removed.
Treatment of hands in preliminary wash tank to eliminates field dirt, latex overruns
and pesticide residue.
Secondary wash tank; fungicide wash is affected- Before treatment in secondary
tanks, each bunch is cut into packing clusters and inspected.
At end of secondary wash, bananas shall be placed into trays onto roller conveyors.Each tray is weighed and holds a packing unit load.
As it moves down the conveyor, material shall be air dried, and stumps can be sealed
with paraffin wax.
Thereafter the box packing takes place and palletisation and subsequent staging is
done.
cardboard.
Diagrammatic representation of process

flow is alongside.
As banana pack house utilizes water as
transport mode (design pack house uses
50,000 litres daily), appropriate water
treatment and recharge systems are
incorporated. The recycled/treated water
can be used for sanitary purposes or stored
for field irrigation uses.
156
FINAL REPORT
To introduce cable conveyor system, the receiving area would incorporate a rotating cable
array. Here the hands would be unloaded and suspended from the cable, leading to the dehanding workers. The stake is returned on cable for subsequent disposal. Organic waste can
be returned to banana fields to be converted to humus.
Technology
/Facilities
Packaging
Ripening
Storage
Transport
Description
SortingandgradingOnthebasisoffingerlength,shape,colour,etc.
Ripeningtemperatureis15C20C(with9095%RH).
Bananastorageisatatemperatureof13C14Cforamaximumof3weeksinethylene
freeair.
For domestic purpose, transportation through both modes 80% by rail wagons and rest
20%isthroughroadinnormaltrucks(89MT).
PackHouseLogistics
of transport such as trucks (4 MT), vans, etc except for pulses where produce may also come
in trucks of 10 MT capacity. Expected peak arrival of vehicles is about 18-20, which would
include following approximate number of vehicles:
Pulses: 7
Lemon: 10
Banana: 2
The above number would translate into 10 out-going vehicles at peak. Small capacity field
vehicles, with load capacity of 0.8 MT to 1 MT, are incorporated in the project to serve as
with insulated body deploying pre-cooled chill packs. This is foreseen to increase field reach,
hence enhancing catchment range.
training support to them for best farming practices, better post harvest handling practices,
efficient use of inputs and technology transfer etc. The pack house will develop appropriate
encouraged to come together as producer companies and set up and manage aggregation
points wherever possible. Pack house may also invest in developing infrastructure at
aggregation points such as platforms, sheds, etc
157
FINAL REPORT
details). Ethylene generators would be utilized for appropriate dosing of the catalyst.
Where ripening facility is located adjoining the pack house, conveyor rollers are optioned to
carry the crates directly to ripening area.
23.2.3 DryWarehouse
which is abundantly produced in catchment area of spoke.
Apart from the above, following facilities are proposed in the pack house;
BusinessCentre
Other facilities proposed for this location are:
Canteen
DG Room
Parking Area
Utilities
158
FINAL REPORT
24 SPOKE:JALNA
Jalna has been identified as the spoke for the Amravati Aurangabad Integrated Value Chain.
It has been identified as spoke because its major production as well as marketing centre of
sweet lime. For sweet lime, Jalna has established trade linkages with Delhi, Jaipur and other
markets of the country. Apart from the connectivity to the consumption markets, Jalna is well
connected with state highway and other link roads to production clusters. The railway station
is at Jalna itself.
The aggregation points identified for the spoke at Jalna and their approximate distance from
the spoke are:
AggregationPoints
DistancefromthespokeinKms
Ghansavangi
80
Ambad
50
Badnapur
20
As evident from above, the aggregation points are located within a radius of 100 km from
Jalna. The aggregation points have been identified keeping in view the time required for
evacuation of sweet lime after harvest.
24.1 FOCUSCROPANDESTIMATEDTHROUGHPUT
As mentioned in the previous chapter, Amravati Aurangabad region accounts for 87% of the
total sweet lime production of Maharashtra. Out of this, Jalna district alone produces 0.26
million MT of sweet lime annually. It accounts for around 40% of the total sweet lime
production of the state. Ghansawangi, Ambad and Badnapur are the major taluks under sweet
lime cultivation in the district and they are located in a radius of around 80-100 km from
Jalna. The estimated throughput of the spoke has been identified based on the present
production in the catchment areas, potential for interventions and stakeholders consultations.
The estimated annual throughput of the spoke in MT will be as follows:
Spoke
ThroughputofSweetlimeinMT
Jalna
12000
The arrival pattern of the focus crop at the spoke will be as follows:
SweetLime
Jan
Feb
Mar
Apr

May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
As evident from above, Sweet lime is available for around 8 months; hence the spoke at Jalna
will be operational for around 250 days in a year.
The spoke at Jalna has been designed on the basis of requirement of the focus crop. Sweet
lime is treated as a bulk horticulture produce in the region and limited sorting/grading is
159
FINAL REPORT
carried out at market end. The produce is handled manually throughout the supply chain and
there is no facility available for the focus crop in this region.
As the produce is currently handled through the ambient supply chain, hence introduction of
cold chain infrastructure will not be viable because of increased cost. The objective is to
improve current handling practice and quicker evacuation to the consumption markets. It is
also envisaged that the pack house would serve as a pilot for many more such initiatives.
by gender and working zones. Following facility has been proposed at the spoke:
24.2.1 AmbientPackHouse
An ambient pack house is proposed to be set up for handling of 80 TPD of sweet lime. In the
ambient pack house, following infrastructure will be provided:

AmbientPackHouseProcessflow:
The process flow of sweet lime handled in the pack house is depicted below:
Facilities
Description
QualityCheck
Qualityassessmentofsweetlimeonthebasisofsize,ripeningstageetc.
Sorting
Grading
Packing
Dispatch
and
Packagingtablestobeprovidedinthepacksheds.
Manualpackingofsweetlimeincrates.Thepackagingmaterialmaychangedepending
upontherequirementsofthedestinationmarket.
Produceisexpectedtobetransportedintrucksof15MTcapacities.
The spoke will develop an aggregation mechanism for assured supply of produces to the pack
house. As 80% of the sweet lime is sold at farm itself, hence the pack house owner will try to
establish direct relationship with farmers. To strengthen the aggregation mechanism, the pack
house will also concentrate on capacity building and other extension services in the catchment
160
FINAL REPORT
areas. Since farmers are unwilling to take marketing risk because of price fluctuation and
fewer selling scope for them, setting up of pack house in the region will provide assured
market to the sweet lime growers. The pack houseowner may also invest in setting up of basic
infrastructure such as shed at the aggregation points. The produces will be collected through
pick up vans/trucks from various points of aggregation.
Logistics
At the peak of operations, the daily inbound logistics to the spoke would be 16 and outbound
logistics would be 6. Sweet lime will come to the spoke in various modes of transport such
vans, tempos, trucks etc. and the onward dispatch to destination markets will be through
trucks of 15 MT capacities.
Apart from the pack house, other facilities proposed in the spoke are:
Business Centre
Parking Area
Canteen
Weigh Bridge
DG Rooms
Other Amenities
161
FINAL REPORT
25 SPOKE:PAITHAN(PACHOD)
Pachod has been identified as the spoke for Amravati Aurangabad integrated value chain.
Pachod is well connected by road to major consumption markets such as Mumbai, Delhi etc.
and it is also proximate to the production clusters of sweet lime and Mango. The nearest
airport and railway station is located at Aurangabad, which is around 80 km away from
Pachod.
As Pachod is well connected to production areas, mobile collection centres are proposed for
aggregation of produces. The identified aggregation points are:
Crops
Taluka
Sweet
lime
Paithan
AggregationPoints
Approximate Distance
(Kms)
Apegaon, Pachod, Gharegaon, Ektuni, Katpur, Located in a radius of
Balanagar,Rahatgaon,Dawarwadi,Thergao,Sonwadi
3035kms
Pimpriraja,Adul,Devgaon,Kachner,Nilajgaon
Located in a radius of
6070kms
Bidkin, Sonwadi, Isarwadi, Logaon, Prabhuwadgaon, Located in a radius of
Dhakefal,Dhorkin
3035kms
Pimpriraja,Devgaon,Kachner,
Located in a radius of
6070kms
Aurangabad
Mango
Paithan
Aurangabad
As mentioned earlier, mango and sweet lime are the major crops grown in the catchments of
the proposed spoke. Paithan and Aurangabad talukas account for around 80% of the total
mango production of the state. Kesar mango, which is a specialty of this region, is grown in
abundance in both the talukas. Paithan is not only a production centre of these crops but also
an established marketing hub for domestic market.
As mentioned in the previous chapter, a mango export facility centre, located at around
60kms from Aurangabad, is operational and it has a capacity to pre-cool 5 MT/batch of
mango; hence similar capacity has been proposed for the mango pack house and accordingly
the pack house is expected to target 4000 MT of mango.
The focus crops and estimated throughputs have been identified based on the present
production in the catchment area, the present capacities of existing similar
infrastructures/facilities, potential for interventions, and stakeholders consultations. The
estimated annual throughput of the pack house in MT is as follows:
Spoke
SweetLime
Pachod
Mango
12000
4000
The arrival pattern of the focus crops for the spoke will be as follows:
Jan
Feb
Mar
Apr
Mango
SweetLime
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
The arrival pattern shows that the spoke will be operational for about 8 months in a year.
162
FINAL REPORT
The spoke at Pachod has been designed on the basis of requirements of the focus crops. The
objective is to improve the current handling practices, enhance shelf life and faster evacuation
to the consumption markets. The capacity of the proposed facilities has been planned taking
into account the existing facilities, their capacities and utilization.
by gender and working zones. Following facilities has been proposed at the spoke:
25.2.1 PackHouse
The pack house will have cold chain infrastructure as well as space for ambient handling for
produce. The cold chain infrastructure will cater to kesar mango, which is regarded as a
premium fruit. Keeping synergy with existing ambient supply chain practices, infrastructure
space is also provided that will cater to sweet lime and remaining volumes of mango. As
sweet lime is treated as a bulk horticultural produce and currently handled through the
ambient supply chain, hence introduction of cold chain infrastructure for sweet lime will not
be economically viable. Facility design caters and complies with EHS regulations and
provides segregated amenities by gender and working zones.
Coldchain:Mango
The peak arrival of mango has been estimated to be 50 TPD, out of which 30% i.e. 15 MT
will pass through the cold chain. The basic sub components of the pack house will be as
follows:
Sorting and grading facilities

o For mangos complete mechanized line:
De-sapping racks.
Hot water dip/vapor treatment system.
Waxing and drying system.
Grading system.
equipment.
Buffer Store (Ante room) holding area for 24 pallets pending cold application.
Pre-cooler Forced Air Pre-coolers: capacity 5 MT, each running 3 batches in 18
hour period. In peak season, more than 15 MT will be pre-cooled daily through these
pre-coolers.
Cold Store - 25MT capacity (daily output plus 50% stock overrun to cater for
transport delays). The pre-coolers can also be used to supplement contingency
storage.
Both pre-cooler and cold store refrigeration will cater to 2 to 12 C temperatures
163
FINAL REPORT
MangoProcessFlow:ColdChain
The process flow for mango handled
through cold chain in the pack house is
depicted.
Technology / Facilities
Description
Quality Check
Themangothatcomesfromthefieldwillundergoqualitycheck.
De-sapping
Mangoeswillbeplacedondesappingracksforremovaloflatex
Washing and Drying
Thefruitwillbewashedandairdried.
Pre-cooling
Manualsortingandgradingofmangoisproposed.
MangoestobepackedinCFBboxesofvaryingcapacitiesdependinguponthe
requirementofthedestinationmarkets.Boxeswillthenbepalletized.
Precoolingwillbedoneat12oCat90%RHbyforcedairmethod.
Cold Storage
Storageisdoneat1215oC,8590%RHfor23weeks.
Transport
Fortransportationoftheproduce,refrigeratedvehicleswillbeused.
Sorting and Grading
In the long run, farmers may be educated to reduce pre cooling time and to carry out desapping at field level itself. This can be done by keeping mangoes in water troughs (bore
well water, which is 10-15 degree below ambient) at farm itself, pending transport and thus
removing field heat (reducing pre-cooling time) and washing off latex which minimizes
chances of latex burns.
Where hot dip or vapour treatment is needed (recommended for mango) 52 C for 5 mins,
solar thermal panels with electric heaters as back up can be used.
AmbientSupplyChain:Mango
The remaining volumes of mango that does not pass through the cold chain will be handled in
ambient handling yard and only sorting, grading and packing will be carried out. In the pack
house adjoining the cold chain facility, following infrastructure will be provided:

In season, about 35 MT of mango will be handled in ambient temperature in the pack house.
For ambient handling, a separate space will be provided in the pack house. Here, after
164
FINAL REPORT
receiving the produce from field they will be sorted, graded and packed in CFB boxes
manually and dispatched to markets in normal trucks of 9-10 MT capacities.
AggregationMechanism:Mango
house. The produces will be collected through pick up vans/trucks from various points of
aggregation. To strengthen the aggregation mechanism, the pack house will also concentrate
on capacity building and other extension services in the catchment areas.
Logistics:Mango
of transport such as trucks (4 MT), vans, etc. At the peak of operations, around 10 vehicles
are expected to arrive at the spoke on daily basis. The total number of outgoing vehicles
would be 5, out of this 2 would be refrigerated and 3 would be normal trucks.
25.2.2 SweetlimeAmbientPackHouse
An ambient pack house is proposed to be set up for handling of 80 TPD of sweet lime. In the
ambient pack house, following infrastructure will be provided:

AmbientPackHouseProcessflow:
The process flow of sweet lime handled in the pack house is depicted below:
Facilities
Description
QualityCheck
Qualityassessmentofsweetlimeonthebasisofsize,ripeningstageetc.
Sorting
Grading
Packing
Dispatch
and
Packagingtablestobeprovidedinthepacksheds.
Manualpackingofsweetlimeincrates.Thepackagingmaterialmaychangedepending
upontherequirementsofthedestinationmarket.
Produceisexpectedtobetransportedintrucksof15MTcapacities.
165
FINAL REPORT
AggregationMechanism:SweetLime
house. As 80% of the sweet lime is sold at farm itself, hence the pack house owner will try to
establish direct relationship with farmers. To strengthen the aggregation mechanism, the pack
house will also concentrate on capacity building and other extension services in the catchment
areas. Since farmers are unwilling to take marketing risk because of price fluctuation and
fewer selling scope for them, setting up of pack house in the region will provide assured
market to the sweet lime growers. The pack house owner may also invest in setting up of
basic infrastructure such as shed at the aggregation points. The produces will be collected
through pick up vans/trucks from various points of aggregation.
Logistics:SweetLime
At the peak of operations, the daily inbound logistics to the spoke would be 16 and outbound
logistics would be 6. Sweet lime will come to the spoke in various modes of transport such
vans, tempos, trucks etc. and the onward dispatch to destination markets will be through
trucks of 15 MT capacities.
25.2.3 DryWarehouse
A dry warehouse of 2000 MT capacity is proposed, which will be used for storage of pulses.
Apart from the pack shed, other facilities proposed in the spoke are:
Business Centre
Parking Area
Canteen
Weigh Bridge
DG Rooms
Other Amenities
166
FINAL REPORT
26 FINANCIALANALYSIS
26.1 AURANGABADAMRAVATIIVC
26.1.1 ProjectDetails
The facilities/infrastructure proposed in the spokes for the IVC and its handling capacities as
well as area (in sq meters) are summarized below:
DryWarehouse
Pachod
(Paithan)
2000MT
(920)
OrangePackhouse
BananaPackhouse
RipeningChamber
Facilities
Mango PackhouseCold
Chain
Mango
Packhouse
Ambient
15MT/Day
(700)
35MT/Day
(603)
80
Sweet lime Ambient
MT/Day
Packhouse
(500)
Grainpackshed
Warud
2000MT
(920)
100
MT/Day
(1700)
Anjangaon
2000MT
(920)
100
MT/Day
(1700)
40MT/Day
(1350)
10MT/Day
(527)
Akola
5000MT
(2300)
Sangrampur
2000MT
(920)
Jalna
40MT/Day
(1350)
10MT/Day
(527)
80
MT/Day
(500)
35MT/Day
(750)
To support the operations of above facilities, the spokes will also have adequate basic
infrastructure and other support infrastructure like power and water supply systems, ETP,
solid waste disposal facility, administration block/business centre, canteen, parking space, etc.
A list of these basic and support infrastructure facilities (spoke wise) is given below:
Basic
and
Other
SupportInfrastructure
Administrative
building/businesscentre
Parking
Canteen
PowerSupply
WaterSupply
Total
Unit
Pachod
(Paithan)
Warud
Anjangaon
Akola
Sangrampur
Jalna
300
810
50
200
5550
1160
300
810
50
130
3550
1160
300
1620
100
260
63050
2020
300
810
50
150
3550
1160
300
810
100
210
57950
1210
300
810
50
50
4450
1160
Sq.m
Sq.m
Sq.m
KVA
LPD
26.1.2 ProjectCost
The cost estimates of plant and machinery are based on the information obtained from
equipment suppliers including quotations given by them for similar facilities. The civil work
and basic infrastructure costs have been worked out by architects/engineers based on layout
plans and as per the industry standards. Finally, the costs of land and land development have
been assessed mainly based on interactions with industry/stakeholders in the identified
locations. The component wise costs of the project are given below:
Item Sr.No. Description
Amount(MnRs) Amount(Mn$)
167
B
C
D
1
2
3
4
5
Land
LandDevelopment
Buildings
Utilities&otherfixedassets
SubTotal(A)
Contingencies
Preoperativeexpenses
MarginMoneyforWorkingcapital
TotalProjectCost(A+B+C+D)
0.00
12.28
122.61
96.25
8.15
239.29
20.45
11.96
1.42
273.12
FINAL REPORT
0.00
0.26
2.60
2.04
0.17
5.08
0.43
0.25
0.03
5.80
Land
The breakup of land available for the spokes is given below.
Location
Paithan
Warud
Anjangaon
Akola
Sangrampur
Jalna
TotalIVC
Area(Ha)
0.8
0.8
1.21
0.9
0.8
0.4
4.91
As per the suggested implementation framework the private investor will pay annual lease
rent to state government hence, the land cost has not been considered as part of capital cost of
project.
LandDevelopment
Cost of land development includes boundary wall, road, water drainage, parking etc. The cost
of development is taken as Rs 2.5 mn/Ha.
Buildings
The estimated costs of construction for various buildings in the projects are given below:
Facility
OrangePackhouse
Warehouse
BananaPackhouse
RipeningChamber
MangoPackhouseColdChain
MangoPackhouseAmbient
PackhouseAmbient
PackshedAmbient
BusinessCentre
Miscs
TotalBuildings
Paithan
5.98
5.60
3.60
3.00
2.70
0.80
21.68
Warud
10.20
5.98
2.70
0.80
19.68
Anjangaon
10.20
5.98
8.10
2.76
2.70
1.68
31.42
Akola
14.95
4.50
2.70
0.80
22.95
Sangrampur
5.98
8.10
2.76
2.70
1.00
20.54
Jalna
3.00
2.70
0.64
6.34
IVC
20.40
38.87
16.20
5.52
5.60
3.60
6.00
4.50
16.20
5.72
122.61
The building construction rate for mango packhouse (cold chain) has been estimated to be Rs.
8000/sq. m. Rate for ambient packhouse for orange and sweet lime and ambient packshed for
grains has been estimated to be Rs. 6000/sq. m. The construction rates for banana packhouse
and dry warehouse have been assumed at Rs. 6000/sq. m and Rs. 6500/sq. m respectively.
The lumpsum cost of pre-fabricated banana ripening chamber of 40 MT capacity (which is
equivalent to 10 MT/day ripening capacity) having an area of 280 sq.m has been taken as Rs.
2.76 million. The rates are in tune to the industry standards and have been verified against
quotations received from different industry players.
168
FINAL REPORT
In case of non technical infrastructure, the construction rate has been estimated between Rs.
8000 to Rs. 9000 per sq. m for facilities such as administrative building/business centre,
canteen etc.
Equipments
The break-up of the estimated costs of major machineries is provided below:
Table: Machinery Cost
Plant Machinery
andEquipments
Ripening
equipments
Banana
Packhouse
equipments
Refrigeration
equipments
Mango Grading
line
GrainsCleaning,
gradingline
Weigh Bridge40
MT
DGsets
Crates
Pallets
Refertrucks7mt
Normal Pickup
vehicles
Normal trucks15
MT
Total
Plant
Machinery
&
Equipments
Pachod
(Paithan)
Warud
Anjangaon
Akola
Sangrampur
Jalna
IVC
4.20
4.20
8.40
3.00
3.00
6.00
2.50
2.50
8.00
8.00
1.50
1.50
2.50
0.90
1.88
1.13
6.00
2.50
0.50
3.75
2.50
1.20
5.63
3.38
2.50
0.50
2.50
1.00
1.88
1.13
2.50
0.20
15.00
4.30
13.13
5.63
6.00
0.90
1.50
2.40
1.50
1.20
1.50
9.00
2.40
2.40
4.80
2.40
2.40
2.40
16.80
26.20
10.65
27.10
8.40
17.30
6.60
96.25
The cost wise major components of the project are normal pickup vehicles and trucks (Rs.
25.80 mn), weigh bridges (Rs. 15 mn) and crates and pallets (Rs. 18.46 mn). The rates for
plant, machinery and equipments are comparable to the industry standards and have been
verified with the quotations from different suppliers.
MiscellaneousFixedAssets/Utilities
The breakup of the estimated cost of the miscellaneous fixed assets and utilities is provided
below:
Amounts in Rs millions
Misc Fixed
Assets
Powersupply
system
Water supply
system
ITsystem
Furniture
Total Misc
FixedAssets
Pachod
(Paithan)
Warud
Anjangaon
Akola
Sangrampur
Jalna
IVC
1.20
0.50
1.50
0.50
1.20
0.20
5.10
0.50
0.20
0.05
0.15
0.10
0.05
0.50
0.20
0.05
0.15
0.10
0.05
0.50
0.20
0.05
0.10
0.05
0.05
1.90
0.85
0.30
1.95
0.80
2.25
0.80
1.95
0.40
8.15
The power load for the total project has been estimated to be 1000 KVA. DG sets have been
taken for each spoke and the capacities vary from 50 KVA to 250 KVA depending on the
169
FINAL REPORT
requirement. The project would require 0.14 million LPD of water for the operations. The
cost of water supply has been distributed among the locations in proportion to their water
requirements.
26.1.3 Preliminary&PreoperativeExpenses
The provision towards preliminary & pre-operative expenses includes expenditure towards
preliminary expenses like salaries & administrative expenses, travel expenses, market
development expenses, interest during construction period etc. It is also assumed that the
project will be commissioned over a period of one year. The interest during construction
period is capitalized in the project cost. Pre-operative expenses other than interest during
construction period are assumed to be 5% of cost of fixed assets.
WorkingCapitalRequirement
As the project is meant to create facilities and offer them to various users on rental basis, the
WC requirement is assumed to be operating costs like management, maintenance, insurance,
power and water. As most of these expenses and the rent receipts are monthly in nature, so to
cover these expenses the requirement of working capital is calculated by considering the fund
requirement for 30 days.
Contingencies
The contingencies related to project implementation are calculated as below:
Physical
Price
Contingencies Contingencies
Land
0.0%
0.0%
LandDevelopment
5.0%
8.3%
Buildings
5.0%
8.3%
PlantMachinery&Equipments 0.0%
8.3%
Utilities&OtherAssets
5.0%
8.3%
Total
Contingencies
Contingencies
(RsMn)
0.00
1.07
10.69
7.99
0.71
20.45
Contingencies
(Mn$)
0.000
0.023
0.227
0.170
0.015
0.434
The price contingencies are based on the whole sale price index for FY 2009.
26.1.4 MeansofFinance
The cost of the project is proposed to be financed through a mix of equity and project grant
under VGF from State government and Government of India.
As mentioned in the implementation framework the promoters contribution has been taken at
60% of the project cost (which includes 20% as equity and 40% as debt) and the remaining
funds required will be contributed by state government and GoI as project grant. The table
below shows the funding pattern for the project:
Sr.No Particulars
Amount
Amount Share
RsMillion Million$
54.62
1.16
20.0%
Grant:StateGovernment
54.62
1.16
20.0%
Grant:GovtofIndia(GoI)
54.62
1.16
20.0%
TotalGrant(2+3)
109.25
2.32
40.0%
Debt
109.25
2.32
40.0%
Total(1+4+5)
273.12
5.80
100.0%
170
FINAL REPORT
26.1.5 KeyOperatingAssumptions
The key operating assumptions underlying the projects business plan are described below.
OperatingCostAssumptions:
300 working days per annum are assumed for operations.
Annual Land Lease Rental
The annual lease rental for the land is assumed at Rs 50000/Ha. The rental will be paid by
private investor to APMCs/MSAMB.
Power & Fuel Costs
The total connected load of the facilities for all locations is estimated at 1000 KVA. The
power tariff has been assumed at the prevailing rate of Rs 1.30 per unit for agro based
industry in Maharashtra. Average daily requirement of power would be about 3600 KWH.
The details of power load assumptions for the facility are given below:
Facilities
Orange/SweetlimePackhouse
Warehouse
BananaPackhouse
RipeningChamber
MangoPackhouseColdChain
PackshedsGrains(includinggradingline)
BusinessCentre&Miscfacilities
Assumption
1KVA/60sqm
1KVA/92sqm
1KVA/45sqm
50KVA/40MT
50KVA/15MT
1KVA/40sqm
75KVA/35MT
1KVA/30sqm
The table below shows the location wise power requirement:

Locations
PowerLoad(KVA)
Warud
130
Anjangaon
260
Akola
150
Sangrampur
210
Jalna
50
Pachod(Paithan) 200
Total
1000
Taking into account the current power supply scenario in the state it has been assumed that
the facilities would run on DG sets for about 2 hrs /day. The average fuel cost for DG set is
assumed to be Rs. 35/Lt.
Water Cost
Daily requirement of water is estimated to be 140 KL/day for all the locations combined. The
charges are assumed to be Rs 40/KL.
Employee Cost
The employee cost has been estimated by considering the man power requirement for
managing the facility. The project will be managed by the developer/SPV, who will maintain
and operate the facilities in the project. This includes management and 24 hour maintenance
of the plant and machineries, management of the canteen, business centre, security, etc. So, a
team of technical engineers, support staffs and security personals will be required. The details
of manpower and their average costs are given in the following table:
Grade/Employee
Number Salary/month(Rs)
171
Managers
TechnicalManager
Operators
Maintenance
Account
Security
SupportStaff
TotalEmployeeCost(PerMonth)
6
7
12
12
6
18
18
79
FINAL REPORT
20000
20000
10000
6000
8000
4000
3000
*Increment in salary is assumed at 5% p.a for 1st five years of operations.
Cost of Maintenance
The cost of maintenance has been assumed as 1.0% of value of plant & machinery and
miscellaneous fixed assets. The maintenance cost will increase by 2.5% every year due to
aging of assets.
Cost of Insurance
The cost of insurance has been assumed as 1.0% of value of plant & machinery and
miscellaneous fixed assets.
Admin & Marketing Overheads
The developer will be responsible for only the management and maintenance of the facilities
without any own operations. However, initial tie ups are needed for better capacity utilization
of the facilities. Most of the promotional/marketing expenses will be incurred up front with
only small recurring expenses afterwards. Hence during operations, marketing and business
development expenses will not be significant for the project. The major overheads for the
project will be traveling costs, statutory (like audit etc.) costs and communication expenses
etc. So, the admin & selling overhead costs have been assumed @ 2.0% of revenue in line
with the industry norms for such facilities.
FinancialAssumptions
Taxes
Income Tax rate is assumed to be 33.99% flat (Prevailing Corporate Tax Rate). Income tax is
calculated on PBT after adjusting for the difference between the depreciations calculated
according to Companies Act, 1956 and Income Tax Act, 1961.
Depreciation Rates
Depreciation has been calculated by straight-line method, as per the Companies Act, 1956,
for book purpose, whereas for tax purpose (As per Rule-5 of Income Tax Act, 1961), written
down value method is employed. The rates of depreciation are in tune to the rates that are
used in cold storage and warehousing industry. The depreciation rates used for different
assets are given below:
DepreciationRates
Plant&Machinery
MiscellaneousFixedAssets
Buildings
BookDepr
10.34%
10.34%
3.34%
TaxDepr
15.00%
15.00%
5.00%
The plant & machinery includes refrigeration and cooling systems used for operation of
facility, sorting-grading equipments, crates, pallets etc. The noncore equipments like water
supply system, transformers etc are included in miscellaneous fixed assets. Buildings include,
building for ripening facility, ambient and cold pack-houses, dry warehouse storages,
business center, canteen etc.
172
FINAL REPORT
RevenueAssumptions
Rental assumptions
Based on the discussion with market players (service providers, food processors, users,
traders and wholesalers) the rental charged for various facilities is tabulated below:
Facilities
AmbientPackhousesOrange/Sweetlime
BananaPackhouse
MangoPackhouseColdChain:
Sorting/Grading/Packagingcharges
ColdStore&Precoolingcharges
Warehouse
BusinessCentre
Crates
Weighbridge
Logistics
GrainPackshed
Sorting,grading,cleaning,Packingcharges
Charges/Unit
60
1000
1400
1000
600
60
100
100
7
2
10
500
UnitofCharge
Rs/sqm/month
Rs/sqm/month
Rs/MT
Rs/MT
Rs/MT
Rs/sqm/month
Rs/sqm/month
Rs/sqm/month
Rs/cycle/crate
Rs/MT
Rs/Km
Rs/MT
The rentals charged for these facilities are comparable to the prevailing market rates.
CapacityUtilization
The estimated capacity utilizations are shown in the table below.
Year
YearI
YearII
YearIIIandonwards
Capacityutilization
40%
60%
80%
The capacity utilizations have been assumed conservatively, starting at 40% in the first year.
26.1.6 FinancialPerformance
The estimated financial projections for the project are tabulated below:
Income Statement:
(Rs Million)
Year
1
CapacityUtilization
40%
Revenue
RentalOrange/limePackhouses
0.24
RentalBananaPackhouses
7.20
RentalRipeningchambers
3.12
RentalMangopackhousecoldchain 0.45
RentalMangopackhouseAmbient
0.02
RentalWarehouses
1.72
RentalCrates
7.35
RentalLogistics
16.92
RentalcleaninggradinglineGrains 1.35
RentalBusinesscentre
1.20
RentalPrecooler
0.27
RentalPackshed
0.04
Weighbridge
0.07
Revenue
39.96
2
60%
0.37
10.80
4.68
0.68
0.03
2.42
11.03
24.75
1.69
1.77
0.41
0.05
0.11
58.77
3
80%
0.49
14.40
6.24
0.90
0.04
3.11
14.70
32.58
2.03
2.33
0.54
0.07
0.15
77.58
8
80%
0.49
14.40
6.24
0.90
0.04
3.44
14.70
33.84
2.70
2.40
0.54
0.07
0.15
79.91
12
80%
0.49
14.40
6.24
0.90
0.04
3.44
14.70
33.84
2.70
2.40
0.54
0.07
0.15
79.91
16
80%
0.49
14.40
6.24
0.90
0.04
3.44
14.70
33.84
2.70
2.40
0.54
0.07
0.15
79.91
20
80%
0.49
14.40
6.24
0.90
0.04
3.44
14.70
33.84
2.70
2.40
0.54
0.07
0.15
79.91
173
Expenses
LandLeaseRental
Power&Fuel
EmployeeCost
Watercost
Maintenancecost
Insurance
Admin&SellingOverheads
TotalExpenses
0.25
1.24
7.51
0.66
2.43
2.19
0.80
15.05
0.25
0.25
1.86
2.49
7.89
8.28
0.99
1.33
2.49
2.55
1.86
1.58
1.18
1.55
16.48 17.99
0.25
2.49
9.59
1.33
2.89
0.70
1.60
18.79
0.25
2.49
9.59
1.33
3.19
0.37
1.60
18.75
0.25
2.49
9.59
1.33
3.52
0.19
1.60
18.90
EBITDA
InterestLongTermDebt(LTD)
InterestWorkingCapitalborrowing
Depreciation
PBT
Tax
NetProfit(PAT)
24.91
13.11
0.57
16.90
5.67
0.00
5.67
42.28
12.56
0.74
16.90
12.08
0.00
12.08
59.59 58.92
11.11 3.82
0.90
0.88
16.90 16.90
30.69 37.31
0.00
14.21
30.69 23.10
58.96
0.00
0.85
4.65
53.46
17.55
35.91
58.80 58.54
0.00
0.00
0.85
0.85
4.65
4.65
53.31 53.04
18.55 19.01
34.75 34.03
FINAL REPORT
0.25
2.49
9.59
1.33
3.88
0.10
1.60
19.17
In the above table, it is seen that in the first year of operations with 40% capacity utilization,
the revenue from the project is Rs. 39.96 millions which increases to Rs. 77.58 millions at
capacity utilization of 80% from third year onwards. The net income from the project would
be positive from 2nd year of operations and is expected to be Rs. 12.08 millions (at 60%
capacity utilization).
MajorFinancialPerformanceIndicators:
Year
EBITDAMargin
62.35%
71.95%
76.81%
76.82%
76.76%
76.32%
76.42%
PATmargin
0.00%
20.56%
39.56%
30.65%
30.60%
30.23%
30.41%
DebtEquityRatio
0.69
0.57
0.42
0.32
0.24
0.18
0.12
DebttoEBITDAratio
4.56
2.43
1.54
1.31
1.10
0.90
0.70
InterestCoverageRatio
1.82
3.18
4.96
5.73
6.75
8.00
9.92
DSCR
1.82
1.66
2.47
2.67
2.89
3.09
3.34
AverageDSCR
2.55
IRR
15.67%
The above table shows the operational and financial efficiencies of the project. The project is
able to achieve an operating margin (EBITDA Margin) of about 60% from the first year of
operations itself. From fourth year onwards, the project is able to convert about 30% of its
revenue into net profit. The Debt Service Coverage Ratio (DSCR) is expected to be 2.55 and
is considered as highly comfortable from bankers perspective. The equity IRR is coming
around 15.70%, which seems attractive from investor point of view.
174
FINAL REPORT
27 ECONOMICANALYSIS:IVCAMRAVATIAURANGABAD
The need for economic analysis of any project is to assess various intangible costs and
benefits which are normally not captured in the financial analysis. Any decision on
desirability or otherwise of a project would therefore require to take into consideration such
costs and benefits and then arrive at a net impact of the project on the economy as a whole.
This is more relevant for projects which have a bearing on large segments of the society such
as farmers.
The IVCs have been proposed mainly to plug the gaps and deficiencies along the agricultural
value chains and the aim is to enlarge the size of the value chains in terms of greater revenue
and ensuring a larger share to farmers. The major benefits therefore expected would be in
terms of better price realization, wastage reduction and employment generation. The major
costs considered are opportunity cost of factors of production viz. land, capital and labour.
The above costs and benefits have not been captured in the financial analysis as major
assumptions there include all facilities being developed by private developers for leasing out
to actual users. Thus, financial analysis has taken revenue in form of rentals only which do
not truly reflect above gains. Also, as land for all facilities is to be provided by state
governments on BOT model, financial analysis does not include cost of land even as these
land parcels may have large opportunity cost to the economy as a whole.
27.1 METHODOLOGYANDASSUMPTIONS
The economic analysis is aimed at calculating EIRR which has been done by identifying the
benefits arising due to the proposed practices and infrastructure/facilities and are evaluated by
comparing With Project and Without Project scenarios.
The major benefits considered for calculation of EIRR are those which are easily quantifiable
and are as follows:
BetterPricerealizationduetoqualityimprovementoftheagricultural
produces
A major impact expected is significant improvement in produces through modern methods of
handling, packaging, storage and transportation which would lead to better price realization.
WastageReduction
The interventions in technological infrastructure such as packaging, storage, temperature
controlled transportation and better post harvest management practices will help in increasing
the shelf life of the perishable commodities. The improved shelf life will lead to low wastage
level even during transportation and marketing to distant places in the country.
175
FINAL REPORT
Considering the high unemployment rate in India and the seasonal availability of work for
agricultural labour the project will provide good opportunity to work throughout the year for
the people of surrounding areas.
The project envisages large investments in agribusiness infrastructure which are likely to
generate sufficient revenues and lead to incremental tax realization by the government.
Similarly, the major quantifiable costs considered for calculation of EIRR are given below.
While opportunity cost of land has been treated as a capital cost for the purpose, opportunity
cost of capital (project grant) and labour has been treated as recurring cost.
Opportunitycostofland
The land for the IVCs is to be provided by state governments on BOT model. Thus, the cost
of land has been taken as the rates prevalent for industrial land in the surrounding areas. The
opportunity cost of land is broadly in line with Maharashtra Industrial Development
Corporation (MIDC) land rates in the region.
Opportunity cost of capital/ project grant
The project provides for large amount of capital grant to private developers, which may range
from 90% of project cost in Bihar to 70% of the project cost in Maharashtra. For the purpose
of EIRR calculation, the opportunity cost of project grant amount has been considered which
was not captured by the financial analysis. Opportunity cost of capital contributed as project
grant is assumed at 10% per annum. The assumption is based on the fact that the money
invested as grant can be invested elsewhere and a minimum return of 10% per annum has
been assumed conservatively.
The project assumes large employment generation for agricultural labourers and limited
employment opportunities for management professionals. For the calculation of EIRR, the
opportunity cost of agricultural labourers has been taken assuming that they had options to
work on other projects such as National Rural Employment Guarantee Scheme (NREGS).
The detailed calculation for above mentioned benefits and costs has been done at IVC level
and is given below:
27.2 QUANTIFICATIONOFBENEFITS
QualityimprovementleadstopremiumPriceofthecommodities
The incremental price realization is calculated based on the price range available in the
market for different grades (firmness, color, size etc.) of the produce. The table below
compares the Without Project and With Project cases to estimate the incremental benefits
due to improved quality of the produce.
Withou
t
Project
WithProject
176
Estimated Additional Price

Realization(%)
FINAL REPORT
Price
(Rs/MT)
Incremental
Benefit
(Rs/MT)
Quantity
(MT)
Total
Incremental
Benefit (Mn
Rs)
12.0%
25760
2760
32400
89.42
15%
11.0%
17760
1760
30000
52.80
20%
16.0%
46400
6400
3750
24.00
10%
15%
11.0%
44400
4400
43500
191.40
109650
357.62
Min
Max
Crops
Price
(Rs/MT)
Weighte
d
Average
Fruits
23000
10%
20%
Banana
16000
10%
Mango
40000
15%
Grains/
pulses
40000
Total
The incremental benefit due to quality improvement is estimated to be Rs 357.62 million per
annum at 100% capacity utilization.
WastageReduction
The range of wastage reduction depends on the grade of produce and the distance of final
market from source of production. The table below shows the assumptions made and
calculations of the benefit due to reduction in wastage.
WithoutProject WithProject
WastageReductionRange(%)
Crops
Quantitysaved
Min
Max
Fruits
10%
Banana
Mango
Average
Selling
Price
(Rs/MT)
Quantity
Saved(MT)
Total
Incremental
Benefit(MnRs)
15%
11.0%
25760
3564
91.81
15%
20%
16.0%
17760
4800
85.25
10%
15%
11.0%
46400
413
19.14
Grains
5%
8%
5.6%
44400
2436
108.16
Onion
10%
15%
11.0%
0.00
Total
11212.5
304.36
The project help in saving of estimated quantity of agricultural produce of about 11000 MT
valued at Rs 304.36 million.
The spoke wise number of workers and for how many days in year the labour will be
employed has been estimated based on the capacity of the facilities and the seasonality of
crops handled. The wage rate for the labour is taken at prevailing market rate of Rs 120 per
day. Being a green field project, the entire labour for the project is incremental in nature and
the monetary value of income to the labour is given as below:
WithoutProject
WithProject
No. of Days/
workers Annum
Annual
amount
(RsMn)
Annual
Incremental
Benefit(RsMn)
Location
No. of Days/
workers Annum
Annual
amount
(RsMn)
Warud
0.00
94
180
2.03
2.03
Anjangaon
0.00
280
300
10.08
10.08
Akola
0.00
40
180
0.86
0.86
Sangrampur
0.00
196
300
7.06
7.06
Jalna
0.00
84
180
1.81
1.81
Pachod
0.00
135
200
3.24
3.24
177
FINAL REPORT
(Paithan)
Total
0.00
829
25.08
25.08
The income tax calculated for the project is also incremental in nature when compared to the
without project scenario hence, considered as an economic benefit. The likely increase in
revenue collection has been captured in the projected cost benefit statement for EIRR.
27.3 QUANTIFICATIONOFCOSTS
EconomicCostofProject
Amount Amount
Items Sr.No
Particulars
(MnRs)
(Mn$)
Land
19.64
0.42
Land&SiteDevelopment
12.28
0.26
Buildings
122.61
2.60
96.25
2.04
Utilities&otherAssets
8.15
0.17
SubTotal(A)
258.93
5.50
ProjectImplementationCost@10%ofADBFunds
13.58
0.29
Preopexpenses
11.96
0.25
Contingencies
20.45
0.43
CapacityBuilding
32.21
0.68
TotalProjectCost(A+B+C+D+E)
337.13
7.16
All the capital expenses such as land &site development, buildings, plant machinery &
equipments, utilities & other assets are incremental in nature and thus considered as various
components of economic cost of the project. The opportunity cost of land is assumed to be
paid upfront and is therefore treated as capital cost.
The project implementation cost (technical assistance etc.) is assumed as 10% of funds
contributed by ADB. The pre-op expenses and contingencies related to project
implementation are also taken as economic cost of the project. Further, the cost related to
environmental impact has also been treated as one time expenditure in terms of equipments
and facilities provided under the project. The environmental assessment for the project has
not indicated any long term impact which would have significant cost implications. Finally,
the social cost also would be mainly towards capacity building efforts and does not envisage
any other cost like resettlement etc.
Based on the above assumptions the estimated economic cost of the project is Rs 347.63
million or 7.38 million $. The exchange rate of 47.114998 Rs per Dollar is considered for
calculation of cost of project in Dollar value.
RecurringCosts
Location

No.ofworkers
Day/Annum
Annualamount(RsMn)
178
Warud
94
100
1.18
Anjangaon
280
100
3.50
Akola
40
100
0.50
Sangrampur
196
100
2.45
Jalna
84
100
1.05
Pachod(Paithan)
135
100
1.69
Total
829
10.36
FINAL REPORT
As mentioned earlier the estimates are based on NREGS. According to the scheme the
government will provide minimum 100 days of employment to rural families with daily wage
of Rs 125 per worker.
Opportunity cost of capital
Opportunity cost of capital contributed as project grant is assumed at 10% per annum. The
assumption is based on the fact that the money invested as grant can be invested elsewhere
and a minimum return of 10% per annum has been assumed conservatively.
Opportunity cost of other factors
Opportunity cost of other factors such as power, water, fuel etc. is not incremental in nature
as these factors are available already and will be used from existing sources.
27.4 COSTBENEFITSTATEMENT
Year
12
16
20
CapacityUtilization
Imp
Period
40%
60%
80%
80%
80%
80%
80%
80%
A.EconomicBenefits
QualityImprovement
143.05
214.57
286.10
286.10
286.10
286.10
286.10
286.10
WastageLoss
121.74
182.61
243.48
243.48
243.48
243.48
243.48
243.48
IncrementalLabour
10.03
15.05
20.07
20.07
20.07
20.07
20.07
20.07
IncrementalIncomeTax
0.00
0.00
10.56
12.29
16.35
18.38
19.38
19.83
TotalEconomicBenefits
274.83 412.24
560.21
561.94 566.00 568.03 569.03
569.48
B.EconomicCosts
Opportunitycostoflabour
4.15
6.22
8.29
8.29
8.29
8.29
8.29
8.29
OpportunitycostofCapital
19.40
19.40
19.40
19.40
19.40
19.40
19.40
19.40
TotalEconomicCost
23.54
25.61
27.69
27.69
27.69
27.69
27.69
27.69
251.28
386.63 532.53
534.25
538.32
540.34
541.34
541.80
NetEconomicBenefits(AB)
The table above shows the annual cost and benefits arising from the project.
27.5 CALCULATIONOFECONOMICIRR(EIRR)
Economic IRR (EIRR)
Year
ImpPeriod
12
16
20
EconomicInvestment
337.13
NetEconomicBenefits
0.00
251.28
386.63
532.53
534.25 538.32
540.34 541.34
541.80
179
FINAL REPORT
NetEconomicCashFlow
337.13
251.28
386.63
532.53
534.25 538.32
540.34 541.34
541.80
EconomicIRR(EIRR)
104%
The economic IRR for the project is estimated to be 104% which appears to be high. This
high level of IRR is due to the high investment in productive assets and most of the facilities
proposed will directly be used for value addition.
27.6 ECONOMICAPPRAISALRESULTS
27.6.1 MajorEconomicIndicators:
The major economic indicators considered to assess the economic viability of the project are
given in the table below:
NPV(RsMillion)
1,747.25
NPV(Million$)
37.08
BenefitCostRatio
19.89
NPVI
5.18
NPV:
The positive NPV for the project indicates the viability of the project. The NPV is calculated
considering the economic life/ concession period of project as 20 years. The discounting rate
for calculation of NPV is the Weighted Average Cost of Capital (WACC). The WACC is
calculated by assuming the capital cost of 16% for the private investor, 10% for project grant
and 12% for debt. The calculation of WACC is shown in the below table:
Details
Share
CostofCapital
ProjectGrant
40.00%
10%
20.00%
16%
Debt
40.00%
12%
WACC
12.00%
BenefitCostRatio(BCR):
The average BCR over the project life is estimated to be 19.89. The ratio indicates that for
every one $ of expense it will generate about twenty times of expense over the life of project.
Hence, the project is highly economic viable.
NetPresentValueper$ofInvestment(NPVI):
The NPVI of more than zero is always considered as a good indicator of the economic
viability of the project. The estimated NPVI for Aurangabad-Amravati IVC is 5.18 which is
quite high.
180
FINAL REPORT
MAHARASHTRA:INTEGRATEDVALUECHAINS
and
Conceptualplansoffacilities
Stakeholderconsultation
MarketAssessment
ImpactAssessment
Capacitybuildingsupport
Policyandregulatoryaspects
Implementationframework
ProjectImplementationStructure
181
FINAL REPORT
28 CONCEPTUALPLANSFORFACILITIES
28.1 CONCEPTUALPLANSFORFACILITIESATSELECTEDLOCATIONSOFTHEIVCS
The planning for the proposed facilities for different locations of the IVCs in Maharashtra has
been evolved based on the sizes and numbers of the proposed facilities as well as essential
support infrastructure such as business centre, canteen and parking etc.
Adequate provision of basic infrastructure such as access roads, water supply installation,
effluents carriage and treatment, solid waste management, internal electrical distribution and
communication lines has been kept in mind at the proposed facilities. Concepts of proper
green areas for aesthetics and a pleasant ambience have been used besides adequate and
efficient vehicular traffic access and parking to create a modern facility in eco-friendly
manner.
Broad planning concepts for the master planning and main components design are as follows:
28.1.1 PlanningConcept
The concept of the proposed Facilities is derived based on the requirements of the
functions with self contained facilities. The proposed facilities shall be environment
friendly facility comprising of physical and common infrastructure components
interwoven with green spaces.
The concept is guided by the applicable development guidelines of the Site Planning,
Spatial Planning norms and principals. The design philosophy revolves around
prioritizing various aspects viz., circulation, land suitability, environmental
sustainability.
The master plan is based on modern planning concepts of providing good and
efficient internal movement, efficient layout of services with supporting
infrastructure and facilities in an aesthetic environment.
28.1.2 MasterPlan
The guiding principle of the master plan is to incorporate the principles of an ecoindustrial facility by maximizing green space and open spaces, and provision of green
belts. The design envisages functional and accessible work places by incorporating
prudent and scientific planning principles and includes the following:
1. Provision of Basic Infrastructure to the proposed facility adequate for the
proposed usage with anticipated vehicular traffic and other service
requirements
2. Location of process and non-process activities
3. Location of process activities with requirement of mechanical services
4. Providing efficient access to the main road from all buildings
5. A central common facility center interwoven with green spaces
182
FINAL REPORT
Provision of services area with ease of connecting with main service lines.
28.1.3 Buildings
Shed building are planned with one side dimension of 20 MT for economic structure
Building are placed at the longer axis to provide long loading / unloading dock
All building are provided with proper parking and circulation area for heavy vehicles
Building which require mechanical services cold storage are clustered together
The structural design shall cater to the usage for the proposed life with wind and
earthquake resistance
28.1.4 Services
Adequate space has been provided to cater to the proposed usage of the facilities such
as water supply, sewerage/effluent carriage and treatment, power and telecom
distribution
Water supply and Electrical Room are provided near the main road to provide easy
access to operation and maintenance also provides provision connect with main
external infrastructure
Sewerage, Storm water drainage are planned considering the outlet towards the
entrance to facilitate easy connection with external storm water drainage system.
28.1.5 Road&Parking
The main access to the facility center is taken from at least 15mt wide road.
The proposed access to the facility shall connect with the existing access roads with a
well-defined access to the development
No road shall be less than 6 meters in width of paved top
The campus is provided the ample parking along with provision of idle parking
28.1.6 GreenArea
The green areas planned as centralized open space to provide access from all around
which provide visual relief.
The extent of open space shall not be less than 10 percent of the total area of the
facility
Master Plans have been provided for 9 locations in Maharashtra, for both value chains, and
are included here.
183
FINAL REPORT
184
FINAL REPORT
185
FINAL REPORT
186
FINAL REPORT
187
FINAL REPORT
188
FINAL REPORT
189
FINAL REPORT
190
FINAL REPORT
191
FINAL REPORT
192
FINAL REPORT
193
FINAL REPORT
194
FINAL REPORT
195
FINAL REPORT
196
FINAL REPORT
197
FINAL REPORT
198
FINAL REPORT
29 STAKEHOLDERCONSULTATIONS
During the course of the preparation of the Detailed Project Reports, various stakeholder
consultations were carried out in both the states of Maharashtra and Bihar. Consultations with
various stakeholders were conducted mainly during the phases II (during detailed field
surveys and analysis and consultations were held mainly with farmers, traders, cold
store/warehouse/packhouse owners and other intermediaries in the value chains) and III
(which mainly consisted of stakeholders consultations with food processors, organized
retailers, exporters, and others) of the study.
During the field surveys, in-depth interviews and Focus Group Discussions (FGDs) with
farmers, traders/wholesalers, cold store/warehouse/packhouse owners etc were held in most
of the important locations of the value chains. The stakeholders were asked about the details
of the value/supply chains of the identified crops in the regions, trade practices, constraints
faced by them as crucial members of the chains, gaps and market dynamics. Through such
meetings and discussions, validation of data was also done at all major locations along with
identifications of major clusters in the regions.
In case of the consultations with food processing and agri-business industries, exporters,
organized retail chains, potential investors, government representatives, etc, interviews, group
meetings and brain storming sessions were held in Delhi, Mumbai, Patna and some other
major cities in the states of Maharashtra and Bihar.
29.1 IVCSINMAHARASHTRA
In case of Maharashtra, the focus of the project will be development of agricultural
infrastructure with higher involvement of private sector. The IVCs in Maharashtra will be
green-field projects with development of brand new infrastructure which would boost the
agriculture sector growth in the state. The role of private players/investors will be very
important and higher association of the private players is envisaged. Accordingly, due
importance has been given to the private sector during the stakeholder consultations. The
summary of the stakeholder consultations (per major stakeholder groups) in Maharashtra are
given below:
29.1.1 Farmers
Several interviews and FGDs were conducted in the course of the field surveys in all the
selected districts of Maharashtra. Issues related to farming and trading practices, availability
of primary processing facilities and post harvest infrastructure, marketing and other aspects of
the value chains were discussed in details. Here also, both orchard owners/cultivators and
farm owners/cultivators have been covered during the consultations to get an understanding
of the value chain dynamics of fruits, vegetables and grains in the indentified regions.
The Post Harvest Contractors (PHCs) were also consulted at different stages of the study with
the objective of understanding their role in the value chain along with their modes of
operations. Their relationship with the farmers and traders were also studied.
199
FINAL REPORT
The main concerned raised by the farmers and PHCs during those meetings and discussions
are as follows:
Lack of irrigation and dependence on rains for cultivation
In case of perishables, high wastages/distress sale due to lack of post harvest

infrastructure
Non-availability of quality tissue cultures leads to lower quality plant/produce
Lack of access to formal credit leads to dependency on traders/wholesalers/cold store

owners which reduces the profit margin of the farmers in many cases due to high
interest rates (many times which are hidden as lower than market rates offered to
farmers, etc.)
Asymmetry in market intelligence about price and demand of produce in the markets
which does not allow the farmers/PHCs to gain on temporal/locational arbitrage.
29.1.2 Traders/Wholesalers/Localprocessors/ColdChainOwners
Several in-depth interviews and meetings with traders/local processors/cold chain and
packhouse owners were in the course of the study. Various aspects of the project were
discussed with them and their views and opinion were received. The discussions provided a
good understanding of the market perspective of the identified focus crops and existing trade
practices. The current status of food processing sector, cold infrastructure and warehouses in
the identified districts was also discussed. The main feedbacks received are as follows:
Many of the traders/wholesalers/processors are willing to invest in post harvest

infrastructure such as sorting, grading and storage, ripening facilities, pack houses,
etc provided there are good subsidies/government support
Non-availability of labour is a constraint faced by local processors in many parts of

the identified districts
Limited knowledge about modern cold technologies available
Limited access to finance
Lack of awareness about different government schemes, subsidies, etc.
29.1.3 IndustryPlayers
Interviews and meetings with large food processors, organized retail chains, exporters, banks
and agri-business houses were conducted for explaining the project and getting their
feedback. Several pertaining issues were discussed such as issues related to utilization of
existing facilities, experiences of conducting business in the sector, challenges faced and
expectations from the project. The discussions helped in getting a detailed understanding of
the potential investors and financers of the project. Also, detailed consultations were held
with the potential private investors about their roles in the development in the project. The
ownership, viability, operation and & management issues were discussed with them for
considering in the project design and implementation framework. Some of the major issues
which came up during the discussions are as follows:
200
FINAL REPORT
Requirement of a single window approval system for the entire state for procurement
and storage
Allowing dovetailing of different appropriate schemes (both central and state

schemes) in a project
Lack of awareness about available government assistance and incentives
Long gestation periods of projects in agri-sector
Upper cap on subsidies acts as a disincentive to the promoters for making large
investments
Capacity building at the grass root level is required to reduce losses and for
production of higher quality produces which would adhere by the specifications given
by the procuring companies
Requirement of portable packhouses at the farm/collection centre level which would

facilitate quick evacuation of the produces. The locations of the spokes should also be
close to the farms. Some Major Stakeholder Consultations in Maharashtra:
29.2 STAKEHOLDERSMEETINGATMUMBAI
A stakeholder consultation was conducted at Mumbai Cricket Club and Recreation Centre,
BKC on 5th December, 2009. The participants of the meet included the following:
Representatives of the Department of Marketing and Cooperation, Government of

Maharashtra
Representatives of Maharashtra State Agricultural Marketing Board
Food Processors Agri-business Companies
Organized Retail Chains
Infrastructure Developers and Supply Chain Companies
IL&FS Clusters representatives
The discussion focused on policy related and other issues faced by the stakeholders and
potential investors. Feedbacks from the stakeholders about the proposed interventions were
also received during the meeting.
29.2.1 SuggestionsfromStakeholdersonPolicyIssues:
1. Single unified license should be issued to corporate to operate in agri trade
2. Private markets should be allowed to set up collection centres
3. Private markets should be given parity with APMCs in terms of notified area etc.
4. Power cost for agro/food processing should be charged at agricultural rates and not at
industrial rates, as it comprises of a huge portion of operational cost
5. Limits on storage quantity of agri produce should be waived
6. Single window approval for the entire state should be given for procurement and
storage, which at present has to be taken at every Taluka level
7. Waiver of market fee on direct procurement from farmers
201
FINAL REPORT
8. Subsidies should not be essentially credit linked

9. Information products should also be subsidized so that more information could be
made available to farmers
10. An investor should be allowed to dovetailing of the schemes in one project and
should be made eligible to get both central as well as state assistance
11. Upper cap on subsidies discourages investors for making large investments and hence
should be removed
12. Information on available government assistance and incentives should be widely
publicized
13. Investments in agri sector has relatively long gestation period and hence tax
subsidies/holidays etc. are required
29.2.2 SuggestionsonProposedInterventions:
1. Credit should be made more easily accessible to the farmers so that they do not have
to take credit from the traders, who in turn try to control the price of produce.
2. More on-farm facilities and farmers own retail centres should be promoted
3. Portable pack houses should be set up at farm level and produce packed at farm
should come to spokes for storage or dispatch to consumption markets
4. Location of spokes should be at a minimum possible distance from the production
areas to reduce losses
5. More investment should go into procurement infrastructure, which should be small
scale and more in numbers
6. Education and awareness on pre-harvest activities is equally important particularly in
crops like banana, as it determines the quality of the produce
7. Farmers should be trained in better pre-harvest and post harvest practices to cultivate
good quality produce
8. More emphasis should be given on capacity building at grass root level
9. Developing long term relationship between farmer and the corporate is very
important
10. An assessment of losses should be done at different levels in value chain and
identification of areas of maximum loss as potential area for development
11. Spokes should be set up in partnership between farmers groups and corporate
12. Corporate should work on profit sharing model with farmers
13. Stakeholders, particularly farmers should be made aware and sensitized about the
benefits of proposed interventions
29.3 STAKEHOLDERSMEETINGATRAHEJACENTREPOINT,MUMBAI
A stakeholder consultation was conducted at Raheja Centre Point, Mumbai on 19th January,
2010. The participants of the meet included the following:
Organized Retail Chains

202
Food Processors
Financial Institution
Representatives of Asian Development Bank (ADB)
IL&FS Clusters representatives
FINAL REPORT
The project was discussed and feedback of the stakeholders about the project and the sector in
general were received; key issues are mentioned below:
1. Some unorganized retail chains have reduced their packhouses because of less
demand of value added agri products (although demand for such products is
increasing).
2. Large organized retailers are not willing invest in infrastructure at farm
level/collection centres or even at spoke level. Instead they would prefer to have
those facilities operated for them by private operators initially. They may make
investments and take up operations in these kinds of facilities in future.
3. Large food processors are of the opinion that more incentives from the government is
required for the sector. They also had a similar view as organized retailers about
investment and operations of farm level/spoke level infrastructure.
4. The financial institutions stated that programs such AIDP give them a higher comfort
level for lending to the projects.
5. Bigger players who own most of the facilities in the IVCs are preferable to FIs for
lending instead of many small players owning individual facilities.
6. First Loss Default Guarantee (FLDG) offered to the banks would increase their
comfort level for lending in the discussed projects
29.4 LISTOFPOTENTIALINVESTORS
In AIDP model the potential investors may be the organized retail chain companies, 3PL
companies and large food processors.. The lists of potential investors for Maharashtra are
given below:
The potential investors who have been contacted/ consulted during the AIDP study are given
below:
Mr. Dnyandeo G Mahajan, President,

Maha Banana
Mr. T T Pathrikar Secretary

Mango Growers Association, Aurangabad
Mr. V Kiran Kumar, CEO

HALCON, Nashik
Dr. J S Yadav, COO

Premium Farm Fresh Produce Ltd.
Mr. Santosh Dadheech, Sr. Vice President

203
FINAL REPORT
NBHC Ltd.
Mr. Ajay Kumar Prusty, Director

Frutech Agro Industries Pvt. Ltd.
Mr. Madhukar B Chobe, Director

Akruti City Ltd.
Mr. Vinit Kumar, Chairman and Mr. Shyam Mahale

Temptation Foods Ltd.
Mr. Arvind Jhamb, CEO

Ruchi Infrastructure Ltd.
Mr. Rajnikant Rai, Executive Vice President (Operations)

ITC Ltd. (Agri Business Division)
Mr. Deepak Mundra, Vice President Finance

Jain Irrigation Systems Ltd.
Managing Director,
Godrej Agrovet
Mr. Ashok Motiani, Managing Director

Freshtrop Fruits Ltd.
Mr. Rajeev Bhanawat, Asst. Vice President

Aditya Birla Retail Limited
Mr. Prem Saboo, CFO

Reuter's Market Light
Mr. Pravin,
Utsav Banana
Mr. A. Srinivasa Ramanujam, AVP - Operations

Adani Agrifresh Ltd.
Chairman,
Pomegranate growers association (Nashik division)
MALTA Grape Growers Association
204
FINAL REPORT
30 ASSESSMENTOFMARKETDEMAND
India is the world 4th largest economy on purchasing power parity basis. India is also the
second fastest growing major economy in the world, with a GDP growth rate of 6.7 percent in
2008-09. Indias economic growth has accelerated significantly over the past two decades.
Real average household disposable income has almost doubled since 1985. With rising
income levels, household consumption has increased manifold with the emergence of a redefined middle class. The country is on the brink of becoming an economic powerhouse and
it is gaining huge attention from global players as an excellent investment destination.
Indians with an ability to spend over US$ 30, 000 per annum on PPP basis account for around
3 percent of the countrys total population. With a population base of 1.07 billion, this
segment amounts to 20 million people. High economic growth has led to increased disposable
income for the booming Indian middle class, which is estimated to reach a size of 582 million
from its current size of 50 million by 2015 1. Accordingly, the disposable incomes are set to
rise at an average rate of 8.5 percent by 2015. 2
Maharashtra is the largest economy in the country with a high per capita income of US $
621 3. It is also among the most industrialized states, which is coupled with availability of
skilled manpower, enabling infrastructure and a strong institutional framework. Maharashtra
is the second most populous state in the country with a population of 96.9 million 4. It is also
the second most urbanized state in the country, with 42 per cent of the people living in urban
areas.
Bihar, on the other hand, has a per capita income of US $ 139 5, which is much below the
national average of US $512. The total population of Bihar is 82.88 million. Unregistered
units dominate the industrial sector of the state and the major industries are Tea and dairy.
30.1 ASSESSMENTOFFOODMARKETININDIA
The size of the Global Food Industry is estimated at around US $3.6 trillion and India
accounts for less than 1.5 percent of the international food trade. India currently produces
about 50 million MT of fruits, which is about 9 percent of the worlds total production of
fruits and 90 million MT of vegetables, which accounts for 11 percent of the worlds total
vegetable production. Despite its large size, only 6 percent of the processed foods are traded
across Indias borders as compared to 16 percent of major bulk commodities. Hence there is
huge scope for export of value added food products in the international market.
NACERResearch
Ernst&YoungResearch,2008
3
Data:200405
4
2001census
5
IBEF
2
205
FINAL REPORT
The Indian food market in 2007 has been estimated at around US$ 200 billion 6 and is slated
to reach US$ 310 billion 7 in 2015. Food products are the single largest component of
household consumption expenditure. Food and beverages (including tobacco) accounts for
one third of the household expenditure. A survey done by NCAER reveals that food and
beverages accounts for 35 percent and 32 percent of household expenditure in mega cities and
boomtowns. It is estimated that by 2025, food and beverages segment will still be the biggest
category in terms of consumer spends, though its share would drop from existing 35-40% to
25%. Food and Grocery contributes to around 41 percent of private consumption expenditure
and about 74 percent of total retail revenue. Broad category-wise expenditure for each
category of cities is shown in the table below.
It is evident from above
that more than one third
of the monthly household
expenditure is on Food
and beverages segment.
There
is
also
an
increasing shift from price
consideration to quality,
branded and hygienic
products. The number of
working women, as a
percentage of the total
female population, has
risen from 15 percent in Source: NCAER Research, 2008
1991 to close to 25
percent in 2005. This has resulted in growing disposable income, which in turn, leads to
increasing spend on convenience food, value added food products and grocery items.
30.2 GROWTHDRIVERSOFVALUEADDEDFOODPRODUCTS
India possesses the advantage of having a large young population. It is estimated that around
35 percent of Indias population is under 14 years of age and more than 50 percent of the
population is estimated to constitute the working age group. The large population of working
age group forms a wide consumer base. Rapidly changing demographic profiles and increased
disposable income are changing the face of Indian consumers. The swelling middle class is
redefining the consuming pattern with a shift towards branded and value added food products.
With the countrys income pyramid changing rapidly, a definite shift is observed from saving
to spending attitude. Discretionary spending has seen 16 percent rise for the urban upper and
middle classes and the number of high income households has grown by 20 percent year-on-
6
7
Food Processing: Market and opportunities by KPMG

McKinsey & Company
206
FINAL REPORT
year since 1995-96. 8 The

self employed segment of
the population has also
grown significantly.
Growth
drivers
for
emerging markets of
value added food products
are summarized below:
Food
and
grocery
dominates total retail spend: While rural consumers spend around 53% 9 of their total
consumption expenditure on food, urban India spends 40% of their retail spend on food items
thus offering huge opportunity for value added food products.
Higher disposable income: High economic growth has led to increased disposable income
for the Indian middle class, which is switching over to healthy and value added food products.
It is estimated that disposable income is set to rise at an average rate of 8.5 % by 2015 10.
Also, the middle class is estimated to reach a size of 582 million from its current size of 50
million by 2015 11.
Shift in demographic profile: The median age of Indian population is 24 years and
approximately 65% of Indian population is below 35 years of age. The large population of
working age group forms a wider consumer base for food products.
Emergence of organized food retail: It is estimated that the total food and grocery retail
space will grow at a CAGR of 6% over 2006-2011, with the organized share likely to increase
from less than 1% currently to 6-6.5% 12. This will translate into more business opportunity
for value added food products.
30.3 ASSESSMENTOFFOODRETAILINDUSTRY
Traditionally, the Indian retail sector has been dominated by large number of small and
medium sized retailers, who account for more than 95 percent of the total retail business. In
categories like food & grocery, fresh fruits and vegetables, their share is as high as 98
percent. Over twelve million small and medium retail outlets exist in India, the highest across
the world. More than eighty percent of them are run as family owned businesses and the
exemplary mom-and-pop retail outlets constitute a major part of countrys retail store
formats. Modern retailing in India is evolving rapidly, with consumer spending growing by
unprecedented rates and with increasing number of domestic and global companies investing
in this sector.
Ernst & Young Research, 2008

NSS 62nd round
10
E&Y Research, 2008
11
NCAER Research
12
Retail Edelweiss report, 2008
9
207
FINAL REPORT
43.8
2010-11
460.6
16.5
2006-07
Org. Retail
337.3
Total Retail
12.9
2005-06
311.7
0
50
100
150
200
250
300
350
400
450
500
Source:DataMonitor,2007,SalesinUS$Billion,ExchangeRate:US$1:INR41
13
The size of Indian retail Industry was estimated at US$ 385 billion in 200708. In 2006-07,
the retail market size was US$ 337.3 billion. In 2007, organized retail stood at US$ 16.5
billion, implying a share of 4% of the total retail revenue. Organized retail revenues are
expected to increase from US$ 12.9 billion in 2005-06 to more than US$ 43.8 billion by
2010-11. Today, top eight cities (four metros, Pune, Ahmedabad, Bangalore and Hyderabad)
together account for almost 80 percent of the total organized retail.
Food retail, dominated by around 5 million retail outlets in India, is currently estimated at
US$ 160 billion. Within this, organized food retail grew from US$ 391 million in 2002 to
US$ 1624 million in 2007 with a CAGR of about 33 percent.
India tops the AT Kearney's annual Global Retail Development Index (GRDI) for the third
consecutive year, maintaining its position as the most attractive market for retail investment.
Furthermore, a report by Price Waterhouse Coopers foresees India and China to continue as
the top sourcing hubs in retail and consumer sector in the coming years.
Driven by the huge potential in the sector a number of large corporations, both domestic and
global, have forayed in to the market recently. It includes Reliance, AV Birla, RPG, BhartiWalmart, Future Group, Big Apple, Godrej, Heritage and Wadhan Group (Spinach) to name a
few. A few more global players like TESCO, Carrefour and Landmark are also expected to
enter in the market.
The growth in organized
retail sector has been
spearheaded by the food
& beverages segment
and they are also likely
to see a higher growth
rate in future. The figure
below
depicts
the
responses of retailers
about
the
fastest
growing retail segments
in India. This clearly
shows that food and
grocery is by far the
13
Source:KPMG
IBEF
208
FINAL REPORT
fastest growing segment in the Indian retail sector.

India has one of the largest numbers of retail outlets in the world. Of the 12 million retail
outlets, nearly 5 million sell food and related products. Nearly two third of the food retail
outlets in India are located in rural areas, which is also being reflected in the graph below:
Figure:Categorywise
DistributionofRetail
Outlets
Source: NSSO 5th round,

KPMGandCygnusResearch
The retail sector in India is primarily characterized by different SKUs rather than different
retail formats in operation. It is envisaged that modern retail will adapt and absorb some of
the traditional retail formats in subsequent years. Also, with the rural retail constituting the
largest share of total retail revenues, the existing players are now looking at rural markets to
tap the opportunity. A few players like ITC Limited, Godrej and DSCL have already started
the venture under the brand name of Choupal Sagaar, Aadhaar and Hariyali Kisaan Bazaar
respectively.
30.4 MAJORPLAYERSINORGANIZEDFOODANDGROCERYSEGMENT
Major players in organized food and grocery segment are Pantaloon Retail, Reliance Retail,
RPG, Aditya Birla Retail etc. None of the organized retailers have presence in Bihar.
However, Maharashtra is one of the leading states in terms of growth of retail space. Besides
Mumbai, organized retailers are also present in tier I and tier II cities of Maharashtra.
The table below shows the food and grocery sales (2008) as well as no of stores of major
players in organized retail segment:
SlNo.
1.
2.
3.
4.
5.
Nameofretailer
PantaloonRetail
RelianceRetail
RPG
AdityaBirlaRetail
DairyFarm
Foodandgrocerysales($million)
1593
432
427
251
100
Noofstores
456
688
420
645
67
Source:IGD,excludescashandcarryformats
A brief profile of the major retailers is given below:

Pantaloon Retail (India) Limited: Pantaloon has established strong presence across
multiple consumption categories in a bid to capture maximum consumer wallet share. It
has widened its format offerings from a single format to over 15 formats, which captures
almost 75% of the consumption basket. Food Bazar, Big Bazar and KBs Fairprice are the
various banners under which Pantaloon Retail operates in the food and grocery segment.
Out of these three, Food Bazar mainly caters to fruit and vegetable, staples, dairy
209
FINAL REPORT
products etc. Pantaloon often combines its Food Bazaar (food supermarket) and Big
Bazaar (Grocery and other items) formats to create a hypermarket format.
Nameofretailer
FoodBazar
BigBazar
KBsFairprice
Source:IGD
Areainsqm
102,752
380,695
17,980
Noofstores
152
149
155
Reliance Retail: Reliance Retail is part of Reliance Industries Limited, which is one of
the Indias largest conglomerates. It ventured into organized retailing in November 2006.
Reliance Fresh (Supermarket) and Reliance Mart (Hypermarket) are the two banners
under which reliance operates in retailing business. The company invested heavily to
build a nationwide network of procurement centers, cold storages and distribution hubs to
improve supply chain efficiency of perishables. In 2008, 678 stores of Reliance Fresh
and 10 stores of Reliance Mart were operating in the country.
RPG: Spencers (Supermarket) and Spencers Hyper (Hypermarket) are the two formats
of RPG group involved into food and grocery retailing. Around 60% items in a RPG store
comprises of fresh and dry groceries. Around 370 stores of Spencers and 50 stores of
Spencers Hyper are functional in the country.
Aditya Birla retail: It is part of Aditya Birla group. The company forayed into retailing
business in 2006 via the acquisition of Trinethra Super Retail. more. for you and more.
MEGASTORES are the two banners. more. for you is a superstore format and the other
one is hypermarket format. Both of them together account for presence of around 645
stores in the country. Out of this, 639 stores are in superstore format. The company
focuses on private labels with presence of around 350 labels in food and non-food
category.
30.5 ASSESSMENTOFMAJORCONSUMPTIONMARKETS
As mentioned earlier, the major consumption markets for fruits and vegetables grown in
Bihar are Patna, neighbouring states of Jharkhand, Orissa and West Bengal. For certain fruit
crops such as Litchi and Mango, the state has established linkages with major metros like
New Delhi, Mumbai, Hyderabad, Bangalore, Lucknow and Nagpur.
In case of Maharashtra, Mumbai itself is a huge consumption market for fresh fruits and
vegetables. The table below shows the crop wise major consumption markets of fruits and
vegetables grown in Maharashtra:
SlNo
1.
2.
3.
4.
5.
6
Fruits/Vegetables
Pomegranate
Grapes
Banana
Tomato
Sweetlime
Kesarmango
Orange
Lemon
Majorconsumptionmarkets
Delhi,Kolkata,Jaipur
Delhi,Kolkata,Hyderabad
Delhi,Chandigarh,Amritsar,Lucknow
Delhi,Kolkata,Surat,Ahmedabad
Delhi,Jaipur
Delhi
Delhi,Kolkata,Bangalore
Delhi
210
FINAL REPORT
As evident from table above, Delhi, Kolkata and Mumbai are the major consumption markets
for fresh fruit and vegetables grown in Maharashtra; however, in case of Bihar, Delhi,
Kolkata and Patna are the major consumption markets.
Azadpur APMC, which is located in Delhi, is one of the largest fresh produce wholesale
markets in South East Asia Region. It is also an important distribution hub for various
markets of North India such as Chandigarh, Jaipur and Jalandhar etc. It witnesses huge
arrivals from various parts of country on a daily basis. Azadpur Mandi is spread over in an
area of around 40 hectares, which includes both fruit and vegetable market yards.
A detailed analysis of the above mentioned cities (Delhi, Kolkata, Mumbai and Patna) have
been undertaken to assess the consumer demand. Various parameters such as demography,
income and expenditure pattern, penetration of organized retail, economic indices of
respective cities have been taken into account to understand the market demand of food
products.
30.5.1 Delhi
With a population base of 19.73 million and median age of 22.8 years, Delhi has a young
population with a high propensity to consume. Around 15% of the female population is
working, which means a higher number of double income families, which have higher income
and propensity to spend.
DemographyDelhi
Population
Medianage
Percentofworkingwomen
19.73million
22.8years
14.7%
Per capita income of Delhi has been estimated to be Rs 43,155. Around 54% of the
households generate income from monthly salaries and the average HH income is Rs
183,000, which is higher than any other metros except Mumbai.
DistributionofIncomeinDelhi
PerCapitaIncome
Percentofsalariedhousehold(HH)
AverageHHincomefromsalaryinRs000perannum
PercentofbusinessandprofessionalHH
AverageHHincomefrombusinessinRs000perannum
Rs43155
53.8%
183
32.3%
299
Source:HowIndiaEarns,SpendsandSaves,TheMaxNewYorkLifeNCAERIndiaFinancial
ProtectionSurvey,2007(Estimateddatafor200405)
As there is no detailed data on the market size (especially of the food and beverages segment)
of different cities, hence market size has been estimated using data from different sources. In
terms of growth of organized retail, Delhi has an estimated retail space of 6.5 million sq ft
which shows that retail boom has come up in big way in Delhi among all the Indian cities.
The average monthly per capita expenditure (MPCE) in Delhi is Rs 1803.8614. Out of this,
Rs 673.73 is spent on food items i.e. around 37% of the consumer spending is on food
products and around 6% is spent on perishables.
EstimationofMarketsizeoffoodproductsinDelhi
EstimatedretailspaceinmillionSqft 15
14
6.5millionsqft
NSSreport(200607)
211
Unitretailspace(SqFt/HH)
AnnualexpenditureonfoodinRsbillion
MonthlypercapitaexpenditureonfoodinRs
FINAL REPORT
4
Rs159.5billion
Rs673.73
The table below shows the distribution of MPCE on broad category of food items.
PercentdistributionofMPCEonFooditemsinUrbanDelhi
Cereals
7%
Milk&milkproducts
10%
Vegetables
5%
Freshfruits
1%
Otherfooditems
14%
Total
37%
Source:NSSreport(200607)
For the purpose of estimating the market size of food in Delhi, estimation of the total annual
expenditure on food items was done using data on per capita expenditures on food items. It
was found that NCR16s annual expenditure on food is about Rs. 159.5 billion. As 6 % of
monthly per capita consumption expenditure (MPCE) is spent on fruits and vegetables, the
estimated annual expenditure on fruits and vegetables in Delhi comes out to Rs 9.6 billion.
This clearly shows that Delhi is a large consumer market of food products.
30.5.2 Mumbai
The total population of Mumbai is 19.23 million and the median age of population is 25.7
years, which clearly shows that city has a relatively young population that falls in the working
age group.
DemographyMumbai
Population
Medianage
19.23million
25.7years
10.9%
Per capita income of Mumbai is Rs 40,768 and the monthly per capita consumption
expenditure of urban Maharashtra is Rs 1673.48. Out of this, Rs 587.95 is spent on food
items, which constitutes 35% of MPCE.
DistributionofIncomeinMumbai
PerCapitaIncome
AverageHHincomefrombusinessinRs000/annum
Rs40,768
57.8%
205
31.7%
204
Source:HowIndiaEarns,SpendsandSaves,TheMaxNewYorkLifeNCAERIndiaFinancial
ProtectionSurvey,2007(Estimateddatafor200405)
Mumbai is leading the retail revolution in the country with an estimated retail space of 6.6
million sq ft. All the major food and grocery retailers of the country such as Pantaloon,
Reliance and AV Birla are present in the city. The annual expenditure on food is around Rs
135.6 billion.
15
Imagesretail2005
NCRmeansDelhi,Noida,Gaziabad,GurgaonandFaridabad
16
212
EstimationofMarketsizeoffoodproductsinMumbai
EstimatedretailspaceinmillionSqft
MonthlypercapitaexpenditureonfoodinurbanMaharashtra
FINAL REPORT
6.6millionsqft
1.4
Rs135.6billion
Rs587.95
Source:DES,GovtofMaharashtra
Out of 35% of MPCE spent on food products, cereals and milk products constitute 13% of the
total consumer spending. Fresh fruits and vegetables constitute around 6% of MPCE, which is
almost similar to Delhi.
PercentdistributionofMPCEonFooditemsinUrbanMaharashtra
Cereals
7%
Milk&milkproducts
6%
Vegetables
4%
Freshfruits
2%
Otheritems
16.%
Total
35%
The estimated annual expenditure on fresh fruits and vegetables in Mumbai comes to around
Rs 8.1 billion. In comparison to Delhi, Mumbai is a smaller market for perishables.
30.5.3 Kolkata
Kolkata is a major market of eastern India and a large market for fruits and vegetables of
Bihar. The total population of the city is 13.1 million. Around 10.6% of the female population
is working and hence contribute in household income.
DemographyKolkata
Population
13.1million
10.6%
Per capita income of urban west Bengal has been estimated to be Rs 27,868 and the monthly
per capita consumption expenditure of urban West Bengal is Rs 1371.26. Out of this, Rs
551.40 is spent on food items, which constitutes 40% of MPCE.
DistributionofIncomeinKolkata
PerCapitaIncome
AverageHHincomefrombusinessinRs000/annum
Rs27,868
37.7%
135
41.6%
146
As per images retail report, Kolkata has an estimated retail space of 0.7 million sq ft. It is
much less in comparison to Delhi and Mumbai.
EstimationofMarketsizeoffoodproductsinKolkata
EstimatedretailspaceinmillionSqft
0.7millionsqft
0.4
Rs86.6billion
MonthlypercapitaexpenditureonfoodinRs
Rs551.40
Fresh fruits and vegetables constitute around 7% of MPCE.

PercentdistributionofMPCEonFooditemsinUrbanWestBengal
Cereals
10%
Milk&milkproducts
4%
Vegetables
6%
Freshfruits
1%
Otheritems
19%
Total
40%
213
FINAL REPORT
The annual expenditure on food in Kolkata is around Rs 86.6 billion. Hence the annual
expenditure on fresh fruits and vegetables in Kolkata comes to around Rs 6 billion. Though
the market size is relatively less in comparison to Mumbai and Delhi markets, still if offers
huge scope for fruits and vegetables grown in Bihar and Maharashtra.
30.5.4 Patna
Patna is the largest town and capital of Bihar. Total population of the district is 47.18 Lakh as
per 2001 census with an urban population of approximately 30 lakhs. Patna, being the capital
of the state and the largest town, offers a big market for fresh vegetable and fruits. Per capita
income of Patna is Rs 6958, which is highest in the state. As per NSS report 2006-07,
monthly per capita expenditure of urban areas in Bihar is Rs 864.96, which is lowest in the
country. Out of this, Rs 435.56 is spent on food items, which constitutes 50% of the total
consumer spending. The share of vegetables and fruits in total consumer expenditure of
urban consumers of Bihar is around 7.8%.
On the basis of above facts and figures, the estimated annual market size for fresh fruits and
vegetables in Patna (urban) is estimated to be 2.5 Lakh MT.
It can be assumed based on the overall assessment here that the market size of fruits and
vegetables, as also milk, milk products and cereals, in the metro cities, is a growing one and
has scope for greater absobtion from organised supply centres. Other large metros and tier
two metro cities are also markets ripe for tapping, given the needed organisation at the supply
side.
214
FINAL REPORT
31 IMPACTASSESSMENT
31.1 ENVIRONMENTALASPECTS
31.2 SOCIALANDPOVERTYASSESSMENTANDMITIGATION
This report is annexed and contains the following:
Poverty and Social Assessment (Draft)
Public consultation and participation framework
Resettlement framework with entitlement matrix
215
FINAL REPORT
32 CAPACITYBUILDING
Capacity building inputs are envisaged to be an integral part of the implementation strategy
for the Agri-business Infrastructure Development Investment Program in Maharashtra. As
mentioned in the approach, an assessment of the need for building capacity and raising
awareness levels regarding the issues involved were woven into the analysis stage at the
grassroots and implementation levels. As a result, the details regarding these aspects emerge
from this assessment and have been developed to the appropriate scale, keeping in mind their
viability and appropriateness to the local context.
32.1 CAPACITYBUILDING:NEEDSASSESSMENT
32.2 FARM/PRODUCTIONCLUSTERLEVEL
The need for building existing capacities at farm level, was brought out in the early stages of
the value chain analysis of focus crops in the identified regions: Nashik region and
Aurangabad-Amravati region.
The weaknesses in the system included lack of proper aggregation, absence of efficient and
scientific systems of farming. Small/medium holding sizes, traditional farming practises and
lack of field level organisation were among the reasons identified for the weaknesses.
In addition, several issues pertaining to lack of awareness at the level of the farm and
production cluster, lack of farmer-organisation, no interventions to build soft/technical skills,
limited or no exposure to new and efficient techniques and systems and other good practices
etc.. The social assessment has flagged the problems faced by women farmers in particular.
Given the interventions envisaged under AIDP, these gaps are required to be addressed for
the successful implementation of the projects.
The focus of this level of capacity building will address the following aspects:
Farmer organisation: This is the first step towards facilitating extension services at
farm level; this may be undertaken by strengthening existing channels and putting
into place alternate services. Capacity building of farmers will be the necessary first
step for these and further interventions. Formation of farmer groups as Self Help
Groups (including micro-finance activities) with special womens groups is proposed.
These groups will be further linked to various institutions and systems for further
development and support activities. Group Leaders will be provided special trainings
to become Trainers themselves, to ensure continuity and scaling up the activities,
over the years.
Farmer Groups may, over the years, become federated along the value chain to form
producer companies.
Awareness building: Once the organisation is in place at the farmer level, awareness
building activities will be undertaken to address all involved groups: farmers,
functionaries from concerned government departments (state agri department,
MSAMB) and institutions, traders, elected representatives (at PRI/ULB level). This
216
FINAL REPORT
will include subjects like understanding the Integrated Value Chain approach, good
farm-level practises, the Agri-infrastructure Development Project, institutional
linkages and available schemes, aspects pertaining to environment, economics, and
social issues including gender sensitisation. Exposure visits to good examples by
selected groups and further dissemination of learnings will also be undertaken.
Resource strengthening: Identification of relevant resources for each production

cluster and linking them is also included
These proposed interventions are detailed in the following sub-section.

Further to the ones proposed, other interventions may also be included as the project
progresses:
Input and farm-machinery modernisation
Scientific management of resources (inputs)
Farm mechanisation as a process to link to the value chain to ensure improved

productivity and value realisation. This will lead to increased farm-level incomes and
also help farmers become more responsive to market needs
32.2.1 CapacityBuildingatProductioncluster/farmlevel
It is envisaged that this initiative, in its 4-5 years of running, will cover about 19,500 farmers
(including focusing on women farmers as well), through the formation and support of Self
Help Groups to spread awareness, build capacity and disseminate information.
The number of farmers to be covered is based on an estimation that takes into account the
following:
Average land holding size in the project districts
Reported productivity per unit of land (also, based on focus crops)
Designed capacity for the Integrated value chains and the associated hub and spokes
Taking these into account, it was assessed that during the project implementation period (4-5
yrs) , about 19,500 farmers would be targeted to be covered for capacity building inputs.
Based on this assessment, workable/viable sizes of SHGs and farmer groups have been
estimated. It is also envisaged that in time and with experience, some of these groups would
become more professional and may transform into producer companies or cooperatives.
The train-the-trainer approach has also been included with the trainer being selected from
within the farmer groups to ensure greater outreach, local inclusion and the training exercise
being embedded in the area for continuity beyond the project implementation period.
The outline is described below, along with envisaged costs.
TrainingInput
FocusGroup
Formation of Farmer Farmers,organisedinto

Groups
farmergroups(SHGs)
SplWomenSHGs
FarmerGroupTraining
GroupLeaders:2
leaders/group
Costs
Rs'000
14spokesand1Hub:15x10groups
5200
x130personspergrp=19500farmers
150groupsin6monthsacrossboth
valuechains
2leadersx150groups=300persons
3000
20personspersession=15trsessions
Rs2000/dayx5dysx300persons
Onemorerefreshertrainingof2days
1500
217
TrainingofTrainers
Awareness Program for

dissemination
of
information regarding
the project and good
practises(across3yrs)
About
Project
objectives
Valuechainapproach
- Agribussupplychains
Envissues
Social/gender
sensitisation
- Inst linkages, govt
schemes,MFIs
Exposure visits by
identified stakeholder
groups
Resource strengthening
through trading of
experts/practitioners
Keypersonsfrom
NGOs/Govt)
5oofficerschosenfrom
projectareasonly
acrossthestate(from
PRIs,ULBs,distoffices,
stateagridept,
MSAMB,)
Representativesfrom
Farmerassociations,
NGOs,cooperatives
Tradersawareness
FINAL REPORT
10personsfor2wksatNIRD/IRMA
1000
Useofmultimediaawarenessinfirst
6months
1000
[Coordinatewithdisseminationof
informationfromexposurevisitssee
nextpoint]
Selectedfarmersand
officersfromapplicable
cluster
Acrossclusters,as
applicable
TOTAL(inRsmn)
30farmers+10officers
6locationsoverseasover3yrs
Asrequired
10000
21.7
32.3 CAPACITYBUILDINGATHUBSPOKELEVEL
Even as the proposed capacity building initiative seeks to address farm level capacity
building, it also includes another essential facet: technical training at the level of the proposed
facilities. Indeed, without the appropriate capacity building inputs the program will not be
able to realise its objectives.
32.3.1 CapacityBuildingathubandspokelevel
Thorough training support, of a more technical nature, is envisaged at the facility level to
handle the produce passing through and adhere to the strict quality standards demanded by
the process, according to each produce type.
The facility level training will start with preparation of training modules specific to each
product type. The training will cater to different target groups, focussing more on skills
development and exposure to working with new technologies, including material handling
systems. It is envisaged that workers at the facilities will not only be trained once but will
require to be trained periodically to keep up quality standards, update technologies, remain
current and efficient.
This applies more specifically to all players along the cold chain as it has highly specialised
needs and standards, to maintain and deliver quality. Variations by product type will b
addressed through the specialised and different training modules proposed.
The following table captures the details of the training support by product category, over a 34yr period. It is assumed that the facilities will become functional in the second year.
218
AllFocusCropsNoof
Days
Foronestdspoke(daily)
Grape
150skilledandunskilled,4supervisors,1
managerperfacility
3
Pomegranate
Nooffacilities
Noofdays
FINAL REPORT
Frequencyoftraining(3yrperiod)
Costs(per
personperday*)
Days of training
Onefulltrainingfollowedbyannual
refresher/ondemand
8370000
155
150skilledandunskilled,4supervisors,1
managerperfacility
1395
1
3
refresher/ondemand
2790000
27
3
Banana
155
164workers,4supervisors,1managerper
facility
465
6
3
refresher
42588000
7
Onion
169
3persons,1supervisor,1manager
7098
Aggregationpt4
perspoke,8spokes
3
Onefulltraining
640000
126
2
Kesarmango
5
30workers,4supervisors,1managerper
facility
320
1
1
refresher/ondemand
1050000
16
5
Multiproduct(processing)
35
Onlyinthecaseofprocessingfacilitiesbeing
setup
175
asreq
3
Equipmentspecifictraining
15
Trainingdays
Moduleprep
386000
3000000
193
TOTAL(inRsmn)
58.824
219
FINAL
32.4 CAPACITYBUILDINGCOVERAGE
Through the formed farmer groups and facilities set up, the following aspects are envisaged
to be covered, in terms of issues over the project period, across the entire integrated value
chain.
CapacityBuildingInput
FocusGroup
Productaggregationandpresorting
Farmer,unskilledworker
Productloadingunloading,transfertofacility
3
4
5
6
7
8
Farmer, unskilled worker, (at farm and

aggregationlevel)
Receipt,sorting,grading(QA/QC)
Facility level Unskilled labour, skilled labour,
supervisor,manager
Packaging
Facilitylevelskilledlabour(packagingteam),
supervisor,manager
Cold Chain Operations: operations, resource Facilitylevelskilledlabour(packagingteam),
optimisationenergymanagement,decisionmakingon supervisor,manager
productflow,demandsidelink,
Compliances HACCP, EHS, other regulatory Facility and logistics teams all levels, as
compliances
applicable
Logistics(transport,ventilation)
Transportteam
Supplychainmanagementtracking,optimisation
Managers/owners
Warehouse compliances and std operation, stacking Supervisor,manager
stowage and ventilation systems, material
management
Traceabilityissuesalongvaluechaineg.EuroGAP,
Allalongvaluechain
32.5 IMPLEMENTATIONARRANGEMENTS
The proposed capacity building initiative may be undertaken at the State level in Maharashtra
to cover both Integrated Value Chains: Nashik and Aurangabad-Amravati, by the PMU.
The PMU may have a separate cell internally to focus on Capacity Building. This cell may:
outsource this aspect, based on competitive selection of a qualified entity, with

relevant experience and expertise-- this may be an institute or NGO
identify and appoint internally, through the relevant government department, a cell
to undertake the tasks.
32.6 SUMMARYFINANCIALSFORMAHARASHTRA
MAHARASHTRA
Training
SoftSkillsandawareness
training
ProductSpecific(atspoke
andhublevel)
Coverage
Farmers,officers,NGOs,Cooperativesand
Farmerorganisations
Employees,supervisorsandmanagersatSpokes
andHubs(atAggregationptlevelforOnion)
TrainingModule
PreparationandTrainer
fee
TOTAL(InRsmn)
LumpsumRs3mnformoduleprep.Training
days193@Rs2000perday
Cost(Rsmn)
21.70
58.82
80.52
220
FINAL
33 POLICYANDREGULATORYASPECTS
33.1 ISSUESRELATINGTOPOLICYAGRIBUSINESSINFRASTRUCTURE
Investments in agri-business marketing infrastructure in the country continue to be public
sector driven, and have resulted in a large network of markets created across the country.
New developments have not kept pace with the rate of growth in production of agricultural
commodities, especially perishables like horticulture and floricultural commodities.
As a result, most of these markets do not have adequate infrastructure provision, capacities
and capabilities to handle perishables. The lack of appropriate post-harvest management
facilities including storage and effective evacuation
mechanism- well developed and organized distribution The Task Force on Cold Chain
development in India notes that high
systems; this has negated the advantages gained in
wastages occur due to a multilayered
production resulting in high wastage of fresh produce marketing channel, lack of infrastructure,
in India. Wastage is estimated to be around 35-40 per absence of suitable cold stores and
cent of the production equivalent to Rs 350-400 billion associated logistics as well as the lack of
an organized distribution system. These
in value terms.
are further aggravated by the poor road
The lack of private investment in agribusiness

connectivity and lack of proper storage,
infrastructure and post harvest handling infrastructure handling and transportation between
are due to several reasons, but significant among these production areas and consumption
is existing policies and regulatory frameworks for centreslocatedfarofffromeachother.
agricultural marketing. This is long standing legacy is
set to change slowly as in recent years, the government has noted these drawbacks and taken
steps to bring about positive changes. These are discussed later in this section.
33.1.1 RegulatoryIssues
In addition to the overarching policy, specific regulatory issues affecting the development of
agri-business and post harvest infrastructure in the country are outlined below:
LowLevelofGovernmentFinancialAssistanceforDevelopmentof
AgribusinessInfrastructure
Multiple schemes exist under various departments and ministries which support the
development of agribusiness infrastructure in the country (Details in Annexure). The Ministry
of Agriculture provides for financial assistance in the form of back-ended credit linked
subsidy for establishment if packhouses, cold storages, Controlled Atmosphere Storage,
refrigerated vans, mobile processing units, wholesale markets, rural markets, functional
infrastructure for collection and grading etc., through the schemes of the NHM, NHB, DMI
and APEDA for export related infrastructure. However, the levels of assistance and
calculation of project cost needs thorough revamping.
The Working Group of the Planning Commission (agricultural marketing infrastructure for
the XI Plan) has observed that though the various schemes differ in-terms of scale of
subsidy, mode of administration, and channel of fund flow, most of the schemes are back
221
FINAL
ended subsidy schemes and are credit linked with 25 percent grant. The Working Group
further mentions that agriculture being a disadvantaged area for private investment, (as has
been observed in practice), for promoting infrastructure in this sector, the scale of
grant/incentives has to be much more attractive. Business in agriculture is risky due to small
holdings, resource-poor farmers, technological backwardness, weather dependence, and the
dispersed nature of raw-material sourcing. To provide adequate protection for meeting these
risk factors, the incentives for investment have to be much more attractive in this sector. The
present level of subsidy of 25 percent covers primarily the interest cost and hardly subsidizes
the capital cost of the project, even though the incentive is called capital subsidy. If an
enterprise has set up a project of Rs 1 million, he is eligible for Rs 0.25 million back-ended
subsidy which exactly equals the interest cost. There is virtually no capital subsidy.
Multiplicityoftaxes
Indirect Taxes
Multiple taxes affect all aspects of marketing starting from the levy of VAT (which even
today varies among states) on even basic agriculture produce or elements of minimal value
addition like rudimentary milling etc, Central Sales Tax, entry tax, octroi, purchase tax,
excise tax etc. if further value addition including processing is undertaken. It is also ironic
that in most of the states, while there is exemption or no VAT levied on liquor, large number
of food items continue to be taxed at varying categories of rates of 1%, 4% and 12.5%
(mainly on processed and packaged food products).
With the recent rulings of the many high courts that entry tax levied by states are not
constitutional, it still continues to be in effect in many states thereby reducing the
competitiveness of the industry.
Direct Taxes
Unlike other infrastructure sectors, investments in agribusiness/post harvest infrastructure are
not considered as Infrastructure and hence no incentives are provided under the Income
Tax Act.
EssentialCommoditiesAct,StockOrderetc.
The Essential Commodities Act (ECA) 1955 was put in place after Indias Independence to
control production, supply and distribution of essential agricultural commodities and to
ensure availability of food products. In the current context of liberalizations, controlling the
movement of products by licensing of dealers, limits on stocks and control on movements
only hamper the growth of the agricultural sector and curtails promotion of food processing
industries.
FragmentationandLicensing
The vast Indian market is broken up into smaller local /regional markets resulting in high
costs involved in transporting agricultural commodities and processed food from one part of
the country to another. Secondly, even within the states, a trader /operator has to take
multiple licenses for operating in more than one APMC regulated markets, which is a
deterrent and in many cases acts like a trade/entry barrier.
222
FINAL
ConvergenceofOperationsandSchemes:
A World Bank study has found that multiple government agencies are involved in the
agricultural marketing system. Functions and schemes overlap significantly. To quote the
study at least 39 central government agencies promote agricultural marketing development,
either broadly or with respect to specific commodities. Most of these agencies offer
investment grants to the private sector, but weak coordination o f these efforts prevents
greater synergies in development impact and in some instances leads to duplication. For
example, three government ministries offer grants to invest in cold storage facilities; each
grant scheme has different terms and conditions. Clearly, these schemes should be
rationalized. Greater coordination should be fostered among the agencies that implement
them to promote greater consistency, minimize duplication, more effectively track the level
of support, and document the impact of these investments.
AdministeredPrices
The country has administered prices for the major food grains including cereals, oilseeds,
cotton and sugarcane. These at times severely limit the private investors.
Apart from these, the National Horticulture Mission has provision for buy back intervention
for the state governments which can put the private players at a disadvantage.
33.1.2 Credit
While Agriculture has been classified by the Government as priority sector for lending,
investments in agribusiness remain a grey area. Given the intensive capital nature of some of
the investments particularly in cold chain infrastructure, availability of credit, particularly for
greenfield projects or for first generation investors become a stumbling block many a times.
Secondly availability of venture capital funds in the country for agriculture and agribusiness
investments is almost non-existent.
33.1.3 TechnologyInduction
While some efforts have been made by the APMC markets to induct mechanised equipments
for sorting, grading etc, the technology in use needs a revisit. Similar is the case with storages
both ambient and controlled environment. A Study by Directorate of Marketing &
Inspection (DMI), GoI mentions that only two percent of the cold storages had PUF
insulation and about 18 percent of the cold storages offered deep freeze facilities. Very few
cold stores (about 9 percent) had some mechanized handling systems. About 54 per cent of
cold storages offered manual grading facilities.
Negligible cold storages had advanced facilities like humidity control or controlled
atmosphere. Only a few cold store units in the consumption centres with capacities in the
range of 2,000 to 4,000 MT have installed modified and controlled atmosphere systems
The structure of the presently applicable schemes to such infrastructure have promoted
traditional technologies and not the modern technologies that are better suited to the needs
and cover connected functions and operations.
223
FINAL
33.1.4 CapacityBuilding
At the current levels of operations itself, there is shortage of skilled manpower at various
levels right from the farm to processing. A survey by FICCI on estimating the skill shortage
in Indian Industry, estimates that shortage of refrigeration mechanics, electricians and fitters
exists to the tune of 65%. In addition, shortage of agricultural scientists exists to the tune of
60% and shortage of food safety professionals exists to the tune of 70% 17. There are no
specialized institutes for R&D and for imparting specialized skills in bakery and
confectionery. Besides CFTRI, there are very few institutions, which provide qualified
manpower for food processing sector.
Similar is the case at the farm level. There is pressing need to undertake precision farming
and train farmers in harvest and post harvest management of crops, especially perishable. The
extension delivery mechanism is traditional and fully driven by the government. Considering
the large number of small and marginal farmers in the production chain, attention paid to
human resource development including development of grass root level institutions with a
view to mainstreaming these farmers has received less attention. The public extension
delivery system was never market oriented allowing private sector to play any significant
role.
Govt policies/schemes do not provide adequate assistance to support this essential aspect to
operationalise new technology use through private initiatives. Private investors are also
reluctant to invest in capacity building on their own.
33.2 RECENTPOLICYINITIATIVESTAKENBYTHEGOVERNMENT
Policymakers in India have taken cognizance of the changing requirement of agricultural
business infrastructure as well as the importance of well-functioning markets to agricultural
growth, food security, and broad-based rural development. In this regard, the Prime Minister
of India, Dr. Manmohan Singh, noted during the Agriculture Summit 2005 in New Delhi that
an important commitment of the government is to integrate the domestic market to all goods
and services. The time has come for us to consider the entire country as a common or single
market for agricultural products. We have to systematically remove all controls and
restrictions. 18
Recognising the need, there have been several policy changes that have taken place in the
country, even though much needs to be still done. The Government has developed a model
APMC Act 2003 and is vigorously promoting it. The modifications allow the direct
marketing, establishment of private markets, single license for operating in the entire state,
contract farming etc. even though there are still limitations that will need to be overcome.
However, it is understood that these are the first steps and will evolve with time and
experience gained from implementation.
Some additional initiatives that have been taken up are:
17
18
Source: FICCI Industry Survey

India: Taking Agriculture to the Market World Bank
224
FINAL
Removal of restrictions on investments in bulk handling and storage by domestic and

foreign investors (up to 100%).
Repeal of the Cold Storage Order, 1980 (promulgated under Section 3 of the
Essential Commodity Act 1995) with a view to remove administrative control in
licensing, rent control and requisitioning cold store space. However, the Government
of West Bengal has not yet amended it and the Government of Uttar Pradesh has
partially amended the same.
In 2002, GoI lifted licensing requirements, stocking limits and movement restrictions
for wheat, paddy/ rice, coarse grains, edible oilseeds, edible oils and removed
restrictions on access to credit under the selective credit control policy.
Enactment of plant variety protection legislation protecting intellectual property

rights with respect to crop research and development
Removal of ban on future trading of 54 commodities in 2003.
Liberalised norms for Foreign Direct Investment (FDI) through automatic route by
including agriculture and allied activities like horticulture, and setting up
infrastructure such as cold storage and warehousing facilities
33.2.1 StateLevelAPMC
Agriculture marketing, till recently was governed by the Agriculture Produce Marketing
Committee (Act), 1963 enacted by different states. There are 2,170 Agricultural Produce
Marketing Committees (APMCs) at present in the country with about 7,500 markets being
regulated under the respective State APMC Acts. This was enacted to facilitate the
establishment of an efficient system of buying and selling of agricultural commodities as well
as regulate trade practices detrimental to farmers interest. The basic objective of setting up
of network of physical markets was to ensure farmers obtaining fair and reasonable price for
their produce by creating environment in markets for fair play of supply and demand forces,
regulate market practices and attain transparency in transactions.
Under this Act, a state was divided in various marketing zones and declared as a market area
wherein the markets are managed by the Market Committees constituted by the State
Governments. Under the Act, once a particular area is declared a market area and falls under
the jurisdiction of a Market Committee, no person or agency is allowed freely to carry on
wholesale marketing activities. However, due to the State monopoly, no private markets and
large scale supply chains could come up in the past and these regulated markets typically
suffered from inadequate infrastructure and trade practices inimical to farmers interest. The
monopoly of Government regulated wholesale markets has prevented development of a
competitive marketing system in the country, providing no help to farmers in direct
marketing, organizing retailing, a smooth raw material supply to agro-processing industries
and adoption of innovative marketing system and technologies.
33.3 INITIATIVESTAKENTOPROMOTEAGRIBUSINESSINVESTMENTIN
MAHARASHTRA
The following are some initiatives taken up by Maharashtra in the agri-business area:
225
FINAL
33.3.1 AmendmenttoAPMCAct
The Maharashtra Govt has amended the Maharashtra Agricultural Produce Marketing
(Regulation) Act 1963 in 2005. While regulation of markets including licensing continues to
remain an integral function of the state under the amended Act, it has several enabling
provisions such as:
Allowing direct marketing - direct marketing licence holder shall pay the market fee
as per section 31 to the Maharashtra State Agricultural Marketing Board. License fee
for direct marketing in the state as a whole is Rs 50,000 per year and for operating in
division is Rs 15,000 per year. Direct marketing license holder cannot operate a
private market or farm-consumer market
Establishment of private market - Private market cannot be operated in marketing

area of Bombay APMC. In other places the private market has to be located at a
minimum of 10 km from main market and 5 km from sub market yard. The new
Private market has to be spread over a minimum of 10 acres in district areas with a
minimum investment of Rs 5 crore and 5 acres with a minimum investment of Rs 2
crore in other places.
License fee to operate a private market is Rs 50,000 in district area and Rs 25,000 in
other places; Bank Guarantee of Rs 2 million and Rs 0.5 million have to be provided
respectively for these locations.
Farmer market can be established but over a minimum of 1 acre of land with
minimum investment Rs 1 million. The annual license fee for operating such
markets is Rs 10,000 and the operator has to provide a Bank Guarantee of Rs
100,000. However, there is restriction in the sale of produce by individual farmers in
these markets with a maximum of 10 kg per day in case of fruits and vegetables and
50 kg per day for food grains.
Single License for operating in the state The amendment allows for single license
to operate in more markets than one. However, in actual practice, there are still lot of
hurdles and permission to be taken to operate in each of the markets.
The amendment exempts the payment of market fee in case produce is procured
directly from farmers in case of exports or used for processing.
The direct marketer or private market developer/operate has in addition to the license
fee pay market supervision fee to the State Government.
33.3.2 GrapesProcessingIndustryPolicy,2001
Declaration as a Preferential Area:

The state has declared the winery industry as preferential area to avail easy loans
from financial institutions like NABARD.
Declaration as a Small Scale Industry:
Concessions in Excise Duty:

For those wine industries whose production has been started before 19th September,
2001, the excise duty will be charged at the rate of 50 per cent of the production
226
FINAL
expenditure incurred by such units instead of present 100 per cent rate. For those
wine industries whose production has been started or would be started on or after
19th September, 2001, the excise duty will be charged at the rate of 25 per cent of the
production expenditure incurred by such units. Such concessions will be admissible
for period of 5 years.
Concessions in Sales Tax

The state is working towards getting wine manufactured in the country to get a
concessional rate of Sales Tax.
Exemption from Excise Duty

The state has provided 100% exemption from payment of excise duty to wines
manufactured in the state
Wine Sales License Fee:

Exemption for 10 years on wine sale license fee (Rs 5,000 per year)
33.3.3 PackageSchemeofIncentives,2007
Covers cold storage and agro industries
New projects to be eligible for Industrial Promotion Subsidy (IPS). Payment of IPS
every year will be equal to 25% of any Relevant Taxes paid by the eligible unit to the
State or to any of its departments or agencies as under
Taluka/Area
Classification
A
B
C
D
D+
NoIndustry
District
Ceilingas%ofFixedCapitalInvestment
Micro&Small
Medium
Manufacturing
Manufacturing
Enterprises
Enterprises/LSI
20
30
20
40
25
50
30
60
35
Numberofyears
Micro&Small
Medium
Manufacturing
Manufacturing
Enterprises
Enterprises/LSI
7
5
8
6
9
7
10
8
Units under expansion will get 75% of benefits eligible for new units as above
Zero VAT Units also eligible for getting employment based incentive as proposed for
low HDI districts in the form of 75% reimbursement of expenditure on account of
contribution towards Employees State Insurance (ESI) and Employees Provident
Fund (EPF) Scheme for a period of 5 years However the quantum of incentives for
these units will be limited to 20%, 30%, 40%, 50%, 60% of FCI in B, C, D,
D+, No Industry District respectively.
Exemption from Electricity Duty - Eligible new units in C, D, and D+ areas and NoIndustry District(s) will be exempted from payment of Electricity Duty for a period
of 15 years
Waiver of Stamp Duty- New as well as units undertaking Expansion/ Diversification

will be exempted from payment of Stamp duty up to 31st March 2011 in C, D, D+
Talukas and No Industry Districts. However, in A and B areas, stamp duty exemption
would be available as given below:
o
BT and IT units in public Parks : 100%

227
BT and IT units in private Parks : 75%
Mega Projects : 50%
FINAL
Refund of Octroi / Entry Tax in lieu of Octroi - An eligible unit, after it goes into
commercial production, will be entitled to refund of Octroi duty / Entry Tax (in lieu
of Octroi), account based cess or other levy charged instead of or in lieu of Octroi
payable and paid to the local authority on import of all items required by the eligible
unit. This incentive will be admissible in the form of a grant restricted to 100% of the
admissible fixed capital investment of the eligible unit for a period 5 / 7 / 9/ 12 years
respectively in the B / C / D / D+ areas. In respect of No Industry District areas,
however, the period will be 15 years.
Strengthening the Micro, Small and Medium Manufacturing Enterprises to promote

quality competitiveness, research and development and technology upgradation:
5% subsidy on capital equipment for technology up gradation subject to

maximum of Rs.2.5 million
50% subsidy on the expenses incurred for quality certification limited to

Rs.100,000.
25% subsidy on cleaner production measures limited to Rs.500,000.
50% subsidy on the expenses incurred for patent registration limited to Rs. 5
Lakh
Special Incentives for Units coming up in the low Human Development Index
Districts:- New units setting up facilities in notified districts (Annexure-II) and
employing at least 75% local persons as defined in the Employment of Local Persons
Policy will be offered 75% reimbursement of expenditure on account of contribution
towards Employees State Insurance (ESI) and Employees Provident Fund (EPF)
Scheme for a period of 5 years. However these benefits will be limited to 25% of
FCI.
33.3.4 Others
Subsidy for constructing onion storage @ 25% of the project cost estimated at Rs
6,000 per MT conforming to the specifications laid by the MSAMB
Subsidy for erecting grain handling unit - subsidy of 10 %of the cost of the machine
or Rs 200,000 whichever in less to the beneficiary APMC
Subsidy @ 25 % of the total project cost with maximum limit of Rs 250,000 per
project for constructing cold storage with a capacity of 100MT.
Subsidy for putting up stall at fruit festivals to cooperative societies/APMC/SHGs @

Rs 1000/- for stalls in grade 1 cities and Rs 700/- per stall in other cities and towns.
228
FINAL
33.4 EXISTINGSCHEMESPERTAININGTOAGRIBUSINESSINFRASTRUCTURE
33.4.1 ImpactofSchemesonDevelopmentofAgribusinessInfrastructure
Nearly all the currently operational schemes do not promote convergence. Firstly, this has
resulted in investors or infrastructure developers not being able to take advantage of
dovetailing/convergence of scheme funds and provisions.
Second, the quantum of assistance and the level of assistance (in terms of percentage and
project cost) do not reflect the current prices and need. For example, the project cost of cold
stores taken by all the schemes of the Ministry of Agriculture are based on the cost of the
projects around 1999 or 2001 and for the creation of RCC infrastructure with glass wool
insulation and the like, not in accordance with more recent developments like PUF panels
thereby restricting the induction/adoption of advancements in technology.
Third, the administered prices or the provision for market intervention within the states
ambit of functioning further restricts actual players and promotes intermediation.
Fourth, the schemes actually support the fragmentation of the value chain as they support one
or the other individual components and not the complete chain.
Fifth, most of the Schemes do not promote creation of backward linkages in terms of
development of grassroots institution framework by private investors as also don not support
the investor undertaking market driven farming.
The level of assistance (in terms of % of project cost) has been captured well by the Working
Group of the Planning Commission (agricultural marketing infrastructure for the XI Plan).
However, nearly two thirds of the eleventh plan period has already passed and no
developments have taken place (Except 1-2 schemes of the Ministry of Food Processing
Industries)
33.5 POLICYINITIATIVESCRITICALTOSUCCESSFULIMPLEMENTATIONOFAIDP
33.5.1 ApplyingtheIntegratedValueChainapproach
The limited and inadequate facilities of existing markets are major constraints to efficient
operations in terms of agri-business infrastructure and services.
However, fragmented and component wise development (as observed from past experiences)
are not going to be effective. Efforts over the longer term, however, have to be framed within
a holistic agricultural market development strategy integrating all components and elements.
The current initiative promotes the Integrated Value Chain approach for Agri-business
infrastructure and services. This approach is envisaged to address the discussed infirmities
and create awareness along the chain on the value erosion due to different actions taken at
different points of supply chain. It is also expected that the support to be provided under the
proposed project, will address the presently low level of assistance available and attract larger
investments. This will allow improving the operations and facilities and address the criticality
of ensuring that more resources are used to improve agribusiness infrastructure development
and link farm to the market effectively.
229
FINAL
33.5.2 SuggestedPolicyInterventions
In the context of Integrated value chains and the existing issues in this area, the following set
of suggestions are presented for consideration and coordinated action towards the operational
climate for the project:
Single uniform license to enable procurement in any district or market without

hindrance or , single unified license for buying, procuring, selling of inputs, storage,
and processing of all agriculture commodities for the State as whole be introduced.
Abolition of mandi market fees charged by APMCs on private market developers and
investors
Relaxation of restriction on storage
Including agri infrastructure legible for viability gap funding
Investment in agri infrastructure to be considered for tax exemptions Investment in

agri business infrastructure to be accorded 100% depreciation in first year similar to
that for cold storages to be carried forward for at least three years of operations
230
FINAL
34 IMPLEMENTATIONFRAMEWORK
34.1 PROPOSEDMODELSUNDERPUBLICPRIVATEPARTNERSHIP
34.1.1 ApproachtoPublicPrivatePartnership(PPP)inIndia
The approach to PPPs must remain firmly grounded in principles which ensure that PPPs are
formulatedandexecutedinpublicinterestwithaviewtoachievingadditionalcapacityanddelivery
ofpublicservicesatreasonablecost.Thesepartnershipsmustensurethesupplementingofscarce
publicresourcesforinvestmentininfrastructuresectors,whileimprovingefficienciesandreducing
costs.AsnotedintheApproachtotheEleventhPlan,PPPsmustaimatbringingprivateresources
intopublicprojects,notpublicresourcesintoprivateprojects.
11thFiveYearPlan(200712),VolumeI,PlanningCommission,GovernmentofIndia
After the unprecedented success of the 10th Five Year Plan, which achieved average annual
growth rate of 7.7 per cent, the growth target for 11th Five Year Plan has been further
enhanced to 9 per cent with acceleration projected to reach 10 per cent by the end of the Plan.
To achieve these growth targets, it is believed that India needs to step up its infrastructure
investments from the present level of around 5 per cent to about 8 per cent of GDP which
may amount to almost USD 400 billion of investments.
While acknowledging the dominant role of the public sector in building infrastructure, the
11th Plan also appreciates limitations of the public sector in mobilizing the total requisite
resources. The share of the private sector in infrastructure investment is, therefore, projected
to rise substantially from about 20% estimated in the Tenth Plan to around 30% in the
Eleventh Plan. It has, therefore, suggested attracting private investment through appropriate
forms of public private partnerships to meet the overall investment requirements.
34.1.2 ExperienceofPPPinIndia
PPP approach in India, as elsewhere in the world, has been guided by the belief that it not
only brings much needed financial resources from private sector but also ensures greater
efficiency in provision of public services. The database of PPP in India, prepared by
Department of Economic Affairs, Ministry of Finance,
Energy Others
reveals that as on November 15, 2009, there have been
5%
2%
around 450 PPP projects in focus sectors where a
T ouris m
6%
contract has been awarded and projects are under
Por ts
1 0%
implementation/near implementation. The total project
cost is estimated to be about Rs. 225,000 Crore or USD
Roads
48 billion.
Urban Dev
61%
The road sector clearly dominates PPP experience in

India and accounts for about 60 per cent of total number
of PPP projects so far. Other significant sectors, in terms
of numbers, are urban development (16 per cent), ports
(10 per cent), tourism (6 per cent) and energy (5 per cent).
16%
NumberofPPPProjectsinIndia
Sectorwisedistribution
231
In terms of value, though, while road remains leading

sector, accounting for 45 per cent of total value of projects,
port and airport sectors are next accounting for 30 per cent
and 9 per cent of total value of PPP projects in the country
so far.
Further, Karnataka, Andhra Pradesh and Rajasthan are
leading states and National Highway Authority of India is
the leading central agency involved in PPP projects in the
country. Finally, in terms of main types of PPP contracts,
almost all contracts have been of the BOT/BOOT type
(either toll or annuity payment models) or close variants.
En ergy
8%
FINAL
Oth ers
2%
Airpo rts
9%
Roads
45 %
Po rts
2 9%
Urban Dev
7%
ValueofPPPProjectsinIndia
Sectorwisedistribution
A study of World Bank regarding experience of developing countries reveals that Telecom
(54 per cent) and Electricity (23 per cent) together account for more than 75 per cent of
investment commitments to infrastructure projects with private participation. Also,
cumulative investment in PPP
Water treatment
Water utilities Combined water
Seaports
plants
2%
projects
near/under
and electricity
4%
Roads
1%
utilities
Railways
Electricity
8%
implementation in India at around
0%
23%
2%
Airports
USD 48 billion accounts for
3%
Natural gas
3%
merely 5 % of investment
commitments in such projects in
Telecoms
developing countries during 200054%
2008. Of course, it may not be entirely fair to compare investment commitments to projects
near/under implementation where contract has already been awarded. More so, as PPP
projects have truly gained momentum in India only during last 4-5 years.
Totalinvestmentcommitmentstoinfrastructureprojectswithprivateparticipationin
developingcountries,bysubsector,20002008:USD843.3billion(2008USD)
This is also corroborated by another set of data which has put India at 2nd position behind
Brazil amongst top 10 countries by investment commitments in infrastructure with private
sector participation. In fact, India accounted for as much as USD 110.2 billion (13.1 per cent)
of such investment commitments, marginally behind Brazil which attracted USD 111.9
billion.
34.1.3 PPPinAgribusinessInfrastructure:
AIDP has envisaged PPP model for implementation of proposed integrated value chains. The
key rationale for introduction of PPP model in infrastructure projects has been a combination
of private sector efficiency and public budget constraint. It is being argued similarly here that
scale of investment needs for agribusiness infrastructure are too huge to be adequately met by
public sector alone. Moreover, it is agreed that most of the projects in agribusiness suffer
from large inefficiencies and a PPP structure may therefore bring in much needed efficiency
in both construction and operation of proposed agribusiness infrastructure.
However, the proposed financial structure for AIDP would be one of the first such efforts in
the country to create Agribusiness infrastructure under PPP model. As can be seen from
sector-wise distribution of PPP projects in the country, Agribusiness has not yet been covered
as a sector under PPP projects under/near implementation. To be sure, this would be true of
PPP experience worldwide too as this model has been preferred mostly for creation of public
232
FINAL
utilities and basic infrastructure, specially for projects which involve large scale upfront
investments even as natural ownership of assets may lie with the Government.
34.1.4 ViabilityGapFundingScheme(VGF)
It was earlier envisaged to provide funding to proposed projects for integrated value chains
under Viability Gap Funding Scheme. The financial assistance available under VGF of
Ministry of Finance, Government of India is normally in the form of a capital grant at the
stage of project construction. The financial assistance is equivalent to the lowest bid for
capital subsidy, but subject to a maximum of 20 per cent of the total project cost. In addition,
the sponsoring Ministry/ State Government/ statutory entity may propose to provide
assistance up to a further 20 per cent of the total project cost.
To be eligible for consideration under VGF, a project needs to be a PPP project and should
meet the following criteria:
1. The PPP project has to be implemented, i.e. developed, financed, constructed,
maintained and operated for the project term by a private sector company to be
selected by the Government or a statutory entity through a transparent and open
competitive bidding process.
2. The criterion for bidding shall be the amount of viability gap funding required by the
private sector company for implementing the project where all other parameters are
comparable.
3. The PPP project should be from one of the following sectors : Roads and bridges,
railways, seaports, airports, inland waterways, power, urban transport, water supply,
sewerage, solid waste management and other physical infrastructure in urban areas,
infrastructure projects in Special Economic Zones, international convention centers
and other tourism infrastructure projects. However, it has been provided that the
Empowered Committee may, with approval of the Finance Minister, add or delete
sectors/sub-sectors from the aforesaid list.
4. The project should provide a service against payment of a pre-determined tariff or
user charge.
5. The concerned sponsoring entity has to certify with reasons the following: The tariff
/user charge cannot be increased to eliminate or reduce the viability gap of the PPP
project. The project term cannot be increased for reducing the viability gap. The
capital costs are reasonable and are based on standards and specifications normally
applicable to such projects where the capital cost cannot be further restricted for
reducing the viability gap.
6. Finally, the Scheme will apply only if the contract/concession is awarded in favour of
a private sector company in which 51 percent or more of the subscribed and paid up
equity is owned and controlled by a private entity.
233
FINAL
34.2 CHALLENGESOFVGFMODELFORAGRIBUSINESSINFRASTRUCTUREUNDER
AIDP
34.2.1 UnderVGF,ownershipofprojectassetshastoremainwiththe
Government
To satisfy this core condition of VGF, land would need to be arranged by the concerned state
governments. In case of AIDP, this would require a relatively large parcel of land (say,
around 10-15 acres) to be provided for building Hubs and smaller parcels of land (say, around
2-3 acres) to be provided for setting up various Spokes of each Integrated Value Chain. Also,
such lands need to be at locations suitable for setting up such facilities in terms of basic
infrastructure and market connectivity.
However, in case of Maharashtra, the state government has made arrangements with
Agriculture Produce Market Committees (APMCs), wherein the nodal agency for AIDP i.e.
Maharashtra State Agricultural Marketing Board (MSAMB) would enter into a lease
agreement with the APMCs for 30 years, keeping in view the productive life of assets
proposed to be created under the AIDP and would sub-lease the land to the private developer
for 20 years. Hence, the state government would be able to fulfill the ownership condition by
entering into a long term lease through MSAMB with the APMCs.
Moreover, APMCs are established under section 11 of The Maharashtra Agricultural Produce
Marketing (Development and Regulation) Act 1963 and the Act provides some special rights
to the state government to control the APMCs. These rights are as listed below;
Under section 12 APMC cannot acquire or dispose immoveable or moveable property

without the prior permission of the Director of Marketing, GoM (the Director)
Under Sections 40-45 of Maharashtra Agricultural Produce Marketing (Development

and Regulation) Act 1963 government or any other officer mentioned in said section
has right to inspect and inquire into the affairs of APMCs. The director has the power
to prohibit execution of resolution passed or order made by APMC. The government or
the Director has the power to call for proceeding of market committee and pass orders
thereon. The govt. has power to supersede the committee if in the opinion of govt. a
committee is not competent to perform the duties imposed on it by or under the act
1963
Under section 13 Director of Marketing or his representative and District Deputy

Registrar of Co-operative Societies or his representative a Govt. officer from CoOperative and Marketing dept. is a representative in the director body of APMCs
The above-mentioned sections would enable the state government / MSAMB to ensure that
the project assets are going to be with the Govt. / MSAMB.
34.2.2 Privatesectorisgivenacontract/concessionfortheprojecttermto
recoveritsinvestments
It may be appreciated here that typically PPP projects like roads, ports, airports etc. provide
certain captive market to interested developers and therefore may not require large efforts at
market development. In fact, many PPP facilities evolve as monopolies which ensure certain
234
FINAL
traffic (market) to private sector bidder selected for building and operating these facilities. In
case of roads and bridges under PPP, most of these projects have little competition and get
assured traffic. In case of modernisation of airports under PPP in India, no new or existing
airport is permitted by Government of India to be developed as, or improved or upgraded
into, an International/Domestic Airport within an aerial distance of 150 kilometers of the
Airport before the twenty-fifth anniversary of the airport opening date. Thus, the project
operators in all these cases are assured a captive market and market risk to a large extent is
taken care of under PPP model. The only market risk in such cases is accuracy of traffic
projections.
This may though not be applicable to proposed integrated value chains under AIDP. The
facilities created under these projects, though need based, would require to compete with
similar existing and future facilities both in the public and private sector. Considering the
effort/investment required in building forward and backward linkages for proposed projects,
the condition of transferring ownership of the projects back to the government/sponsoring
entity may discourage promoters/private enterprises from bidding for these projects under
VGF.
At the end of concession period, the land owner/ lessor shall be given the option to take
ownership of the asset by payment of an amount equal to the depreciated value of the
infrastructure constructed on the leased land with precondition that they shall continue to be a
part of integrated value chain or MSAMB shall lease out the infrastructure for operation &
maintenance
34.2.3 Userchargesneedtobedeterminedbeforeimplementationofthe
project
This would be another challenge for integrated value chain projects. User charges need to be
determined in advance for projecting viability gap for these projects, which may be a
difficult exercise in agribusiness projects. This is due to greater market uncertainties in this
sector. While user-charges at the level of Hubs (large storage, trading and value added
facilities) may be possible to be determined, this may not be practical at the level of Spokes
(Agri-business centres) considering the range and scale of services. Moreover, any private
enterprise operating in dynamic market conditions needs to have flexibility in pricing its
services. The absence of such flexibility may come in the way of success of these projects.
However, in this case, the service charges for the IVC facilities will be capped and indexed to
inflation for the first 5 years of the program and would be revised by the state level
Committee during implementation.
Thus, the state government has taken possible measures to meet the above requirements of
VGF viz. state ownership of land, transfer of assets and pre-determination of tariff to a large
extent and hence would be eligible for VGF under the VGF Scheme.
34.2.4 NeedforaflexiblePPPstructureforAIDP
The above challenges, however, may be met by providing the required flexibility in project
structure. It needs to be appreciated that the PPP offers a range of options and is much more
than a BOT model. The PPP options range from concessions and joint ventures to service
contracts and O&M contracts. In fact, service contracts and O&M contracts are considered to
235
FINAL
be first steps in involving private sector as these may be implemented quickly. In a sector like
Agribusiness, where PPP models have not been tried earlier, flexibility in choosing an
appropriate model may be essential to success of the program.
34.2.5 BOTvsBOTAnnuitymodels
BOT model has got two main approaches to handle traffic/market risk. Under the toll-based
Build-Operate-Transfer (BOT) projects, traffic/market risk is borne by the private operators.
Under this model, capital subsidy may be provided to selected bidder for meeting the
projected viability gap during construction phase. An important variant of this approach is
shadow tolling, wherein private partners do not collect tolls from the road users but are
exposed to traffic risks, as they are paid on the basis of the volume of actual traffic. This
model has been found attractive due to provision of subsidy during construction phase. In
fact, as mentioned earlier, VGF which is the main scheme providing government support to
PPP projects has provision for providing capital subsidy normally during construction phase.
On the other hand, the private bidder remains exposed to traffic/market risk under this model
which may make it unattractive for projects which are seen to have large market risks.
Under BOT- Annuity Model though, the sponsoring entity (government or its agency)
absorbs the traffic risk and the private operator is paid for making the specified level of road
service available regardless of the extent of traffic, these are also known as availabilitybased projects. This model has thus been found acceptable for NHAI projects for highways
which assures private operators regular annuity payments over project period. Of course, in
this case, private operators may need to arrange for large capital funds for completing the
project which has its own cost implications.
34.2.6 SPVModel
Large sized and complex PPP projects are often developed through an SPV route, wherein a
project SPV is incorporated and it takes the responsibilities of acquiring land and other
statutory and environmental clearances. The SPV along with the project is then bid out
through a transparent process.
There are other variants possible of this model which may though vary from traditional PPP
approach. For example, it may be envisaged to invite private operators for participation in the
equity structure of the SPV along with the government agency. The equity being offered to
private operator may be either majority share (51 % or more) or minority share (49 % or
less), depending on the nature of the project and decision of the concerned government
agency in this regard. The selected private operator shall also be given responsibility of
O&M of the project under this model.
34.3 PREFERREDOPERATIONMODELFORAIDP
It may be noted here that the draft Detailed Project Report had given three operational
models as options for project implementation. It would be useful to mention suggested
options once again.
236
FINAL
Option 1 assumed entire value chain to be funded under existing guidelines of Viability
Gap Funding Scheme which therefore assumed a BOT model with maximum 40 % of
project cost as grant support, as mentioned above.
Option 2 suggested unbundling of value chain components in such a manner that some
components (in particular Hubs ) may be eligible for funding by VGF even as rest of
the components would be required to be funded by other grant support schemes like
NHM, RKVY etc.
Finally, Option 3 provided for a separate scheme to be launched by state governments
(particularly by Government of Maharashtra) which would provide for maximum 40 % of
the project cost as grant support to private entrepreneurs setting up value chain projects.
The provision of alternative options revolved around a major concern : Whether State
ownership of assets and thus provision of land by the government should be a prerequisite for PPP approach as suggested by BOT Model ? It also emanated from the
uncertainty surrounding the willingness and ability of state governments to provide
suitable land for the value chain projects.
All the above models were discussed in detail and it was finally decided to recommend an
operational model which would adhere to the essentials of PPP approach in terms of
public ownership of proposed agribusiness infrastructure so as to ensure benefits to all
stakeholders in a transparent manner. The model selected for implementation of AIDP is
based on a series of discussions with representatives of Asian Development Bank,
Department of Economic Affairs, Government of India and State Governments of Bihar
and Maharashtra.
The recommended model requires the concerned state governments to provide land for Hub
and Spokes so that project meets the requirement of ownership by a government or statutory
entity.
Thus, a large land parcel close to a large market centre which is owned by
government needs to be identified for creating the Hub (Distribution Centre). Further, smaller
land parcels, close to producing areas, which are owned by government, may need to be
identified for setting up various spokes (Agri Business Centres etc.) for the Hub. Based on
availability of land, proposals would be invited from investors for creating infrastructure
along the value chain at these project sites on Build--Operate-Transfer model. The
recommended concession period under this model is 20 years.
While the essential operational structure of the model remain same for both Bihar and
Maharashtra, it has been recommended that project grant support available may be different
in case of these two states. Thus, minimum contribution required from a private operator, as
percentage of project cost, may be 60% in case of Maharashtra compared to 30% in case of
Bihar. This has been recommended based largely on two counts. First, as argued earlier, too,
Maharashtra and Bihar are at
different stages of development process at present and
therefore it is believed that in Maharashtra, potential bidders may be willing to put in larger
equity contributions considering larger market size. Second, while projects in Bihar would
require renovation of erstwhile market yards and rather limited value chain infrastructure,
those in Maharashtra would be entirely value add infrastructure providing greater revenue
options for a private operator.
However, as the private operators would be selected through a bidding process, actual project
grant required may depend on the response of the potential bidders.
237
FINAL
The salient points of the selected operational model are as follows :

1. The state government has designated Maharashtra State Agricultural
Marketing Board (MSAMB) as nodal agency for AIDP. MSAMB shall
also be responsible for providing land for the proposed hub and spokes.
Subsequently, a Project Management Unit (PMU) would be promoted by
the state government, which would act as the main implementing agency
for the project which would facilitate core infrastructure convergence and
provisioning for the IVC. The PMU will be 100% owned by the state
government and will channel the funds for the IVC investments to the
private sector developer and for the link infrastructure to the government
departments as needed.
2. The PMU would act as the concessioning authority and will invite bids
from private developers to design, construct, operate and maintain (O&M)
the IVCs and will contract them on Build-Operate-Transfer [BOT] basis
at value chain level.
3. AIDP will be designed as a State level scheme. ADB funds can be used
for the development of link infrastructure deemed necessary for the
success of the IVC project, for meeting the need for public funding as
capital expenditure through the private sector for the IVC project and also
for the grant component to be disbursed as viability gap funding (which is
not to be treated as subsidy in view of the fact that it is a grant to the
project to build infrastructure that will be transferred back to the
government after the concession period is over, as per the BOT model).
4. The IVC will include mandatory infrastructure, i.e. the basic (such as
internal roads, power and water supply system, waste management etc.)
and Agribusiness (such as cold storage, CA chambers, warehouses etc. )
infrastructure within the project sites as suggested in Detailed Project
Reports (DPRs). On top of the mandatory infrastructure, the private
developer can also invest in more commercial/add on infrastructure using
its own funds as applicable on a case by case, subject to approval by the
state government. The link infrastructure, also part of the program, would
include linking public services such as bulk water, power and connecting
external roads from the existing supply points to the hub & spokes, as
needed.
5. The works for link infrastructure would though not be a precondition for
the IVC investments to start but they could be run in parallel.
6. The private developer will invest at least 60% of the total project cost of
the mandatory components of the IVC in Maharashtra, which would be
30% in case of Bihar.
7. The grant for the IVC mandatory infrastructure will be released to the
private developer into instalments based on the achievement of predefined
milestones. The grant will be the bidding parameter, while the technical
parameters will be the eligibility parameters.
8. The concession period would be 20 years to make it attractive to the
238
FINAL
private developer.
9. The service charges for the infrastructure will be capped and indexed to
inflation to be determined by a committee .appointed by the state
governments and subject to regular revision.
10. For the infrastructure, standards incorporating both the quality and the
quantity of outcomes will be fixed. Also for the O&M, service level
standards will be fixed and private developer will have to meet them
throughout the concession period. There would be provision for the
oversight and periodic certification by an independent engineer
throughout the concession period.
11. The revenue collection will be done by the private operator as per the
conditions given in Model Concession Agreement.
.A diagram of the model is shown below:
State
Nodal
Agency /
PMU
grants/GOM budget
GOM /
GOI /
ADB
Overall management of IVC components

Provide funds for the IVC components
Aggregate the unbundled IVC components
Bid out to private developers for design, construct,
O&M
Manage capacity development activities
Provide funds for the link infrastructure to Gov
grants/GOM budget
Depts
Link Infrastructure
Private
Developer
design, construct and
O&M
design, finance ,
construct, and O&M
On site and Value

Added facilities
Commercial/
other facilities
Cold
Storage,
Warehouses,
waste management, etc)
(business
canteenes, etc)
VGF,
VGF
Other
schemes
centers,
User charges
(market based)
User charges
(capped)
Services to
users
Leverage of private sector funds
34.4 PROPOSEDPROJECTGRANT,
O&MFRAMEWORKANDRECOVERYOFCHARGES
1. The private developer and operator, selected through a bidding process,
would be responsible for detailed design, engineering, building and O
&M of the project assets including the common infrastructure and
facilities.
2. The PMU (the Concessioning Authority) would, as consideration for
239
FINAL
design, building and managing the project assets and facilities, pay to the
private developer and operator (the Concessionaire) project grant as
specified in the bid documents submitted by the successful bidder. Such
Project Grant amount shall be paid by the Concessioning Authority based
on milestones on progress of the Project as per following schedule :
a. 20 % of the Project Grant after completion of 25 % of Project
Construction as per the project requirements and so certified by the
Independent Engineer
b. 20 % of the Project Grant after completion of 50 % of Project
c. 20 % of the Project Grant after completion of 75 % of Project
d. 20 % of the Project Grant after issue of
Completion Certificate
by the Independent Engineer as per the project agreement
e. Balance 20 % of the Project Grant after satisfactory operation of
Project Services and Facilities for one year as to be decided by the
Concessioning Authority
3. Private developer and operator may recover the user fee for use of
warehouses, sorting/grading lines, CA chambers and other value added
facilities which may be aligned with existing market rates
34.5 PROJECTMANAGEMENTFRAMEWORK
1. The PMU would be responsible for implementation as well as Operations
and Maintenance (O&M) of the projects, which will be done by
appointing a Private Operator through a transparent bidding process.
2. The successful implementation of these projects is likely to throw up
some serious challenges. The private operator would face a direct
competition from the existing APMCs and other private operators in the
vicinity. Hence, the projects are to be structured with care so as to attract
sufficient private sector interest in bidding process.
3. It would be desirable therefore for the PMU at the state level to appoint a
Project Consultant which may assist the PMU in selection of private
operator, detailed design & engineering, supervision and implementation
of the Project
240

Maharashtra ADB DPR

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Maharashtra ADB DPR

Uploaded by

Copyright:

Available Formats

FINAL REPORT

Operationalising the Agribusiness

Asian Development Bank

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

Sorting, grading, packaging

Storage (ambient and controlled temperature)

Value addition and market intelligence

Distribution facilities including logistics

Value chains for end-to-end linkages

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

A market system perspective

A focus on end markets

Understanding the role of value chain governance

Recognition of the importance of relationships

Facilitating changes in behaviour

Targeting leverage points

Empowering the private sector through its greater involvement

facilitate upgrading to become competitive, and

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

A study of various existing data e.g. relating to production, processing, marketing,

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

Identification of blocks to be surveyed, based on production areas of the

Social and environmental impact experts made independent assessment to understand

Crop harvest times;

Processes required for different crops picking, washing, grading, packaging,

Existing types and numbers of facilities for undertaking these operations;

Transport-types used, to and from these facilities;

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

Typical number of stages in the existing supply chains commission agents,

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

Spoke description, proposed system

Proposed Locations for Hub and Spoke model, system

Proposed Integrated Value Chain Project

Spoke description, proposed system

Proposed Locations for Hub and Spoke model, system

Proposed Integrated Value Chain Project

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

* 20 bags of fertilizers per Ha @ Rs 600 per

**7.5 trolleys of Rs 3000 each

***1 kg per plant @ Rs. 9/kg

The capital cost incurred for establishment of an orchard in 7 Ha is mentioned below:

Besides the initial establishment

The operational cost per Ha is shown below:

Pesticides - 14 litres per plant @

The plant starts bearing fruit from

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

Co ntra cto rsm arg in

R s60(W hole sal ersP rice )

R s50 (C ontra ctorsP rice )

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

Some of the assumptions of the price build up are:

The transportation cost has been taken from Malegaon to Mumbai

As evident from above, farmers incur a cost of Rs 5/kg in maintenance of pomegranate

The price build up from farmer to consumer is around 2.5 times.

OPERATIONALISING THE AGRIBUSINESS INFRASTRUCTURE DEVELOPMENT INVESTMENT PROGRAM- PHASE II

The commission paid by the