Transform Agriculture through Supply Chain–Case of Corporate Entry in Agricultural Markets in India

The need for a more integrated market structure where the farmer is provided both backward and forward linkage and which will help to minimize inefficiencies in the marketing system was addressed by legislation in early 2000. Accordingly, the monopoly of traditional regulated markets was broken with the entry of direct marketing, corporate entry, private markets, etc. This paper is therefore an attempt to compare two marketing channels, namely regulated markets and corporates in the marketing of pomegranates in order to observe price spread and net returns to farmers. The corporate selected is Deepak Fertilizers and Petro Chemicals Limited (DFPCL) which provides the registered farmers with total agri solutions through soil, water, plant testing facilities along with complete crop nutritional management. Further, DFPCL also provides marketing linkage to the farmers with product buy back and retailing. The study observed that the net price received by farmers in case of sale to corporate was 75 percent higher than traditional channel. This was explained by the fact that the corporate purchases only superior quality produce and further the farmers do not have to bear transport or marketing costs which are borne by farmers who sell their produce to regulated markets. Post harvest losses were also less when sales were made through corporates in view of better storage structures and therefore less decay of produce. India is a leading producer of fruits and vegetables but only a negligible portion of superior quality production is purchased by corporates. The scale of operations of such corporates must therefore be increased so that farmers can benefit from advisory service and thus produce better quality produce and also obtain higher prices. Regulated markets which are still the dominant source of marketing must strengthen their infrastructure and maintain orderly marketing. Efficient marketing can thus benefit both the producer as well as consumer.