CONCEPT AND STRATEGY SAFAL FRUIT & VEGETABLES AUCTION MARKET BANGALORE, INDIA

Background

Ministry of Agriculture, Government of India, requested the NDDB to undertake a study of the existing wholesale marketing system and formulate an implementable a project for fresh fruit and vegetables marketing.

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Background (cont..)
The findings of the study indicated that the existing system produced a vested interest in that the present system which was controlled by commission agents. It also realized that the system cannot easily be transformed. Therefore, the only way to modernize the marketing of horticulture produce was to set up an alternate system that operated parallel to, and in addition to the present system.

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The Existing System

There were a large number of unorganised small farmers lack market power; There was a low share of the consumer price to the farmer; Farmers dependence was on credit from traders who did not provide any other service; The system provided no incentive for quality;
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The Existing System (cont.. )

Agricultural Acts emphasised regulations and restrictions on marketing activity thereby creating monopoly situations. Lack of standardisation and enforcement of quality norms. Markets were poorly designed and congested;

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Brief Introduction of the Strategy

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

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Concept and components of the New Marketing System

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

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

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Auction Market (contd)

Transparent and fair competition Mechanized material handling Clean, hygienic and healthy market environment and infrastructure Professionally managed Designed to handle on an average 1600 MT produce per day

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AUCTION MARKET THE INFRASTRUCTURE

Two spacious temperature controlled storage halls for fruit & vegetables Large covered separate trading area for handling potato, onion, mango and other less perishable items Auction Halls two having seating capacity of 200 buyers each and the third one with 100 Large dispatch hall for fruit & vegetables Two spacious stores for storage of packing material Wide roads and large parking areas for Market Users

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The Infrastructure (cont..)

192 shops for wholesalers with a provision to build 88 more as and when required 4 distribution centers in the Auction Market Complex A Commercial Building for support functions like shops for transporters, packing materials, banks, post office, communication system, cafeteria, rest rooms & first-aid etc. State-of-art Fruit Ripening facility 50,000 MT Cold Store for potato and fruits Special Storage facilities for grapes, pomegranate, papaya, sapota and mangoes
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Backward Linkages

The market was also horticultural Farmers organized throughout India.

supported by 225 Associations (FAs)

Of these, about 150 FAs were located and facilitated in various production areas in Bangalore. A further 75 located in main producing areas of India.

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Backward Linkages (cont..)

225 FAs were linked to 45 Collection Centers (CCs). These CCs were equipped with facilities to meet the specific or special requirements of buyers, in terms of quality, packing and weight etc. The CCs provided facilities like sorting, cleaning, dressing, grading, weighing, packing and storage etc.

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Backward Linkages (cont..)

Production enhancement was introduced by improving varieties, agronomic and plant protection practices, pre and post-harvest management.
Logistics support was offered in terms of packing and transportation of produces arranged on behalf of the growers. All produce was sorted to standard quality, grade, weight and packing.
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Members Participating in Farmers Day

Backward Linkages (cont..)

The number of fresh fruit and vegetable items along with their different grades handled at the Auction Market was more than 200. The Quality Assurance Team of the Auction Market developed quality specifications, weight per packs & type of packing material for each item handled by the Auction Market.

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Forward Linkages

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

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Forward Linkages Incentives to the Wholesalers

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

State- of- art Fruit Ripening facility

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Safal Auction Market - Investments (Us $ in Millions)

Particulars Auction Market & Forward Linkage Backward Linkage Cold Storage 2003 22.0 2005 -----2009 -----2012 ----Total 22.0

2.2 2.8

2.8 ------

1.8 ------

0.8 ------

7.6 2.8

Total Investment

27.0

2.8

1.8

0.8

32.0

Previous Vegetable Market in Bangalore

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Local Farmers Packing Cabbage

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Local Farmers sorting Tomatoes

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Rural Packing Centre

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Entrance Gate to the Fruit and Vegetable Auction Market in Bangalore

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One of the 6 Trading Blocks

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Cold Store Facility for Potato & Onions

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View of Fruit / Vegetable Wholesale Trading Complex

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Mechanical Floor Washing Machine

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High-tech Banana / Fruit Ripening Facility

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Mechanical Produce Handling Equipment

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Vehicle for Transporting Produce

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Administration Block

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Fruit Storage / Dispatch Hall

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Cold Store Building for vegetables

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Commercial Block ( Banks, Canteen, Ancillary services)

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Fruit Cold Store

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Overview of SAFAL Fruit and Vegetables Auction Market, Bangalore

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Estimated throughput of Safal Auction Market (MT/Day)

Particulars Fruit Vegetables Potato & Onion Total 2003 248 154 456 858 2005 402 250 739 1392 2009 470 293 864 1627 2012 528 329 972 1830

Lessons Learned from the SAFAL FRUIT & VEGETABLE AUCTION MARKET BANGALORE, INDIA

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

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

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Practical Model based on the Safal Backward Linkages and Logistical Centres of Western Europe working in Central Asia

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INVESTMENT PROJECT ONSTRUCTION OF TRADE-LOGISTIC CENTER IN SHYMKENT CITY - KAZAKHSTAN

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Situation of trade-logistic centre in Shymkent city

The part for building TLC is situated to the west of Shymkent city and comprises of 72 hectares

Very favorable situation of the section for construction of TLC is characterized by availability of all types of trunk lines.
-airport -on straight direction is about 3 km; -railways it is necessary to continue branch line about 4 km; -main automobile highway (Shymkent-Samara) is situated on straight direction about 4 km.

Aims and tasks of trade-logistic center being created in Shymkent city

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

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International Trade Links

Contract signed with National Fruit and Vegetable Farmers Associations of Kyrgyzstan to provide 100 tons of fresh fruit and vegetables every week. Logistical Centre provide transportation of produce with cold store facilities by a fleet transport trucks. Logistical Centre charge a flat rate commission
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Stages of building TLC in Shymkent

stage: 2010-2012 . Approach of communication and engineering networks; Administration building; Office building ; Hotel for 60 places ; Laboratory; Logistic centre; Conference-room, restaurant; Customs building; Customs laboratory; Terminal for storage of fruits and vegetables; Meat and fish storage terminal; stage: 2012-2014 . Pavilion for meat and fish sale; Pavilion for wholesale and retail sale; Fruits and vegetables sale pavilion ; Pavilion for trading from platforms ; Garages and service zone; Boiler; Pumping plant; Pond evaporator ;

Filling station.

The structure of trade-logistic centre in Shymkent city

Logistic centre

Equipment

Building and constructions

Warehouses Hangars

Trade area

Local railways

Transport service

SGP of production

Exhibition halls

Railway branch lines

Customs service Processing of production

Refrigerating premises Directorate

Wholesale Broker and juridical service

Laboratory Certification
Informationmarketing centre

Auto roads including trunk lines

utomatization, storage equipment

Office premises Hotels Cafes and other necessary personal services

Platform for trade from wheels

Retail sale

Automobile parking

Local net, server, internet

Weigh house

Recreation of the territory

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Thank You for your attention

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