Finance Minister Nirmala Sitharaman on Tuesday announced to develop large-scale clusters for vegetable production closer to major consumption centres and steps to strengthen supply chains in the Budget. 

“Large scale clusters for vegetable production will be developed closer to major consumption centres. We will promote Farmer-Producer Organizations (FPOs), cooperatives and start-ups for vegetable supply chains including for collection, storage, and marketing” she said in her budget speech. Experts see this as a strategic move to addresses several persistent issues that vegetable growers are facing.  

The inefficient supply chain due to inadequate infrastructure, transportation issues, and poor market linkages, result in significant post-harvest losses for vegetable growers. Farmers typically receive a small fraction of the final market price of their produce due to the long chain of intermediaries, limited market access, and low bargaining power.

Moreover, price volatility and demand-supply fluctuations further impact farmers’ incomes and livelihoods. The proposal to develop large-scale clusters near consumption centers aims to address these challenges.

By reducing transportation costs and post-harvest losses, fresher produce can reach consumers, improving quality and reducing waste. Large clusters can also achieve economies of scale, making production more efficient and cost-effective, leading to higher productivity and profitability for farmers.

Win-win situation

“Promoting FPOs and cooperatives can enhance collective bargaining power, improve access to inputs and technology, and facilitate better market linkages. FPOs and cooperatives can play a crucial role in value addition and processing. Startups in the agricultural sector can introduce innovative solutions for challenges such as precision farming, supply chain management, and direct-to-consumer models, leveraging technology to enhance efficiency, transparency, and traceability” said Vilas Shinde, Chairman and MD, Sahyadri Farms.

“The government’s vision of developing vegetable production closer to consumption centers and promoting FPOs, cooperatives, and startups for efficient supply chains is likely to benefit both farmers and consumers” said Raju Kapoor, Director, Industry and Public Affairs, FMC India.

Vegetable growers say that these initiatives can potentially lead to increased farmer incomes by reducing intermediaries and improving market linkages, ensuring farmers receive a higher share of the final market price.

“Enhanced efficiency and reduced wastage can also contribute to better profitability. With improved infrastructure and organized supply chains, the quality of vegetables can improve, and their availability can be more consistent throughout the year” said Taya Suryavanshi, a farmer from Karad.

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