PFID:F&V India Mango

Market Development Project

Leslie D. Bourquin and Deepa Thiagarajan
Partnerships for Food Industry Development: Fruits and Vegetables
Institute of International Agriculture
Michigan State University
East Lansing, Michigan USA
 The Project
Focus on fresh and processed Alphonso and Kesar mangoes in
Maharashtra state.

PFID-F&V located in Institute of International Agriculture at Michigan

State University awarded a 3-year Associate Award by USAID, India
Mission (2004-2007)

USAID-India Program contacts

„ Dr. Larry Paulson
„ Dr. Aleen Mukherjee (2004-2006)

India PFID Core Team and Partners

„ MSU PFID-India Core Team (Thiagarajan, Bourquin, Korstanje [through 6-
2006], Hanemann [9-2006 to Present])
„ MSAMB (Mohite, Borade)
„ MSU PFID-F&V Director (Freed/Allen)
 Project Goals

Increase net returns to farmers, by:

„ Building capability among mango growers and

processors to meet international grades and
standards for food safety and quality

„ Strengthening linkages of mango growers and

processors with higher value markets
(domestic and export)
 Program Elements
Initial Assessment, SWOCA, Value Chain
Analysis (pre-award – 2005)

Capacity Building / Training / Certification of

Mango Growers on Pre-Harvest Food Safety
(Good Agricultural Practices) and Processors on
Food Hygiene (HACCP)

Building Market Linkages for both fresh and

processed mango products in the domestic and
export markets.
Visioning / Project Planning - SWOCA
Analyses and Value Chain Analysis
Strengths
Weaknesses
Opportunities
Challenges
Actions

Developed in collaboration with Dr. Richard Bawden and Indian participants

during the 2004 Delhi forum on “Horticulture Market Development”

Follow-up to original SWOCA conducted during workshop at Talegaon-

Dabhade in February 2005.

Alphonso Mango Value Chain Analysis conducted in the Konkan

region in February 2005 – included visits to farms, packing facilities
and processing units.
 Primary Production Conditions
Konkan Region (Alphonso) – volcanic basalt, widely
spaced trees, several years to establish production,
LOTS of new trees planted in last five years
Aurangabad Region (Kesar) – typical fruit orchards,
close tree spacing, pruning, intercropping, rapid onset of
production, management and harvest much easier
 Post-Harvest Handling
Many pre-existing facilities and techniques are rather inadequate
Adoption of modern grading / packing technology is limited, but growing
thanks to investments by MSAMB, APEDA and private industry
Major exporters understand the requirements and have good capabilities
to grade, pack and transport mangoes according to international
standards.
Post-Harvest Handling
 India – Emerging Markets Demand Produce
Meeting High Standards for Safety and Quality
Traditional Markets Emerging Markets
APMCs, Mandis Organized Retail
“Wet Markets” Hotels, Foodservice
Exports to “less Exports to Developed
discriminating” markets Countries
(e.g. Middle East) Tremendous pressure to
“Business as Usual” is improve quality and
acceptable for now, but safety standards in order
this is a low-value market to participate in this more
segment that will decline lucrative and growing
over the next decade market segment
 Traditional Mango Value Chain
Traditional Market = High Transaction Costs
(only ~35% of value returned to farmer)
Commission
Mango Local Agent / Wholesaler
Grower middleman Trader

Consumer Retailer
 Fewer Steps in the Process =
More Margin to the Farmer
Improved supply chain under project
„ Direct linkages with supermarkets
Mango
Grower Supermarket Consumer

„ Key Advantages
„ Lower Transaction Costs

„ Improved Quality Control

„ Improved Food Safety and Traceability

 Marketing Opportunities/Strategies Depend on the
Willingness and Capability of Mango Farmers to Meet
Quality and Safety Standards (e.g. EurepGAP)

Farmers who are able to Farmers who are unable

implement/meet the to or choose not to
standard implement the standard

Target organized retail Target improved access

and export market to traditional market
linkages with marginal
financial returns.
GAPs Training Programs
Field Visits
Capacity Building / Policy Efforts
In addition to farmers and processors,
training was provided to State Department
of Agriculture personnel from five states.
Additional cadre of trained farmers and
academicians in Tamil Nadu
The project was very active in facilitating
development of national GAPs standard
(IndiaGAP), which is currently in review by
the relevant GOI ministries.
Summary of 2006 Market Activities
Domestic linkages with organized retail
„ Food Bazaar
„ ShopRite
Direct linkages of producer groups and
processors with exporters
Pune Mango Festival
Direct Marketing at MSAMB
Growers and Acreage Involved in
PFID-MSAMB Linkages - 2006

Fresh: Domestic and Export – estimated

Direct involvement of 68 Alphonso
growers, of which nearly half (48%) with
holdings less than 2 Ha
200 Ha total under Alphonso mango
cultivation
 Pune Mango Festival
May 3-7, 2006
55 small & medium growers participated
Direct marketing to customer resulted in
estimated 20-30% higher returns to farmer
than market price through traditional
linkages
Pune Mango Festival
Pune Mango Festival
 Increased Returns to Farmers
Estimated value of reduced intermediaries in
value chain:

Domestic Fresh Market:

Growers received 20 to 30% higher returns than
traditional channel

Fresh Export Market:

Growers received 50% higher returns for GAP-
certified mangoes when compared to traditional
domestic market
Lessons Learned from Domestic
Fresh Program - 2006
Retailers keen to partner with growers
Organized domestic retail is a rapidly growing
high-value market = expanded opportunities in
2007 and beyond
Priority issues:
„ Price transparency / market intelligence
„ Safety, Traceability, Quality – Condition and
consistency of product
„ Ensuring farmers recover implementation costs
Inadequate Market Intelligence
Domestic Market – Fresh Mango
Seasonal Price Fluctuation
„ 2006 Alphonso Mango Prices – Stratified by
Grade (size) and time of arrival at market

No Grade Size (g) Market Price (Rs /dozen)

Time of the Season Start Mid End
1 A 250-300 173 118 70
2 B 225-250 NA NA NA
3 C 200-225 NA NA NA
4 D 175-200 69 45 35
Food Safety / EurepGAP Implementation
Certification costs ~ Rs
30,000 per farm.
Infrastructure improve-
ments cost up to Rs 1
Lakh in the first year.
Return on Investment by Farmers
Although farmers typically saw 20-50% greater gross
returns on GAP-certified mangoes in 2006, this was
usually insufficient to offset their first-year costs of GAPs
implementation.

“This is test cricket, not one-day cricket”

Marketing Objective - 2007 Season
Ten-fold increase in volumes transacted
under PFID/MSAMB Memoranda of
Understanding

„ 2006 -- Actual: 30,000 3-kg cartons to Food

Bazaar and Shoprite

„ 2007 – Forecast: 300,000 3-kg cartons to

targeted retailers, exporters and processors