p

?
  
?



 
 

 
 O
   

 
 




 
 
 But the present day markets are not efficientƦ

Infrastructure for marketing of perishables

’ Orimary grading/ collection centers - non existent
’ Warehousing and cold storage - inadequate
’ Cold chain - non existent
’ Quality certification system - non existent
’ Transportation for perishables - non existent
’ Rural markets - complete lack of infrastructure
’ Wholesale markets - in government control, lack modern facilities

’ Orivate / direct markets - not permitted

Oost harvest losses: 25 to 30 % in perishables

m
 Oresent Scenario in Value Chain

    

2.5 11.6
1.7
4.1
3.3

FARMER TRADER WHOLESALER RETAILER CONSUMER

ORICE
Retail Markups
350
220
160
100

½ FARM GATE ORICES MILK FISH FRUITS &VEGETABLES

J
 


 

 Concept

Modern terminal markets:

’ A professionally managed competitive structure
’ To provide market services
ƛ to farmers at their door step
ƛ Comprehensive solution to meet needs of stakeholders
Auction
Orocessing industry
Exports
Retail chain and Consumers
’ Requiring high investment and efficient management skills
ƛ Can be infused by private enterprise

-
 Structure of Terminal market

’ Hub-and-Spoke Format: Terminal Market (the hub) to be

linked to number of collection centres (the spokes)
’ Collection centres (Spokes) to be conveniently located at key
production centres to allow easy access to farmers
’ Orovide state of art facilities for
ƛ electronic auction,
ƛ grading, washing and packing lines,
ƛ processing and exports,
ƛ banking etc.
’ Commodities to be covered include
ƛ Fruits and vegetables, Flowers, aromatics and herbs
ƛ Meat & Ooultry
 
 Terminal Market ?

Oackhouse,
Banking Institution Quality Testing
Facility,
Oalletisation
Electronic Orocessor Exporter Wholesaler/ Storage:

Auction Trader/ Cold Storage, Transport (incl.
Retail chain Temperature cool chain),
operator controlled Settlement of
warehouse,
Oayments,
Ripening
Chamber Banking, Market
Direct Selling
information

?

Washing, grading, sorting, weighment, transport to
TM
Collection Centre

Collection & Aggregation of produce, Settlement of
payment, advisory on inputs, prices, quality, multi-
modal transport

Oroducers/ Farmers and their

Associations
å
 Salient Features of the Terminal Markets

Feature Mumbai Nasik Chandigarh Rai Patna Bhopal Kolkata Nagpur

Area of market (in 200 100 100 88 75 59 55 100

acre)

Yearly handling 6 3 2.25 3 2 2 5.47 2.4

capacity (lac MT)
No. of collection 60 20 20 30 26 25 12 25
centres

Peak throughput 3000 1500 800 1000 800 1000 1500 800
(MT/day)

Cold Store 15000 5000 3000 5000 2550 2000 10000 2000
Capacity (in MT)

Total cost of 120 60 53.6 65.6 59 49.6 93.4 54.5

project (Rs. crore)
  
O
O 


’ Total Cost of Oroject ( in Rs. Crore) 60.00

’ Debt Equity Ratio 1.60

’ Debt Service Coverage Ratio 1.82

’ Oay Back Oeriod ( years) 10.00

’ Break Even Ooint( %) 46.68

’ Cash Break Even Ooint(%) 28.79

’ IRR ( % ) 17.25

pp
 Key expectation from the private enterprise

’ Orovide envisaged infrastructure at the TM and the CC in the

Ɲhub- and- spoke formatƞ
’ Establish backward linkage with growers in the catchment
area of the TM through establishing the collection centers.
’ Orogressively involve farmers and their organizations in the
operation and management of the collection centers
’ Facilitate direct supply to processing units, retail chains and
exporters, in addition to auction facility via the collection
centers and terminal market

p!
 Key expectation from the private enterprise
’ Orovide advisory services to farmers on inputs, prices, quality,
multi modal transport and exports
’ Oroject DOR only illustrative. Oroject should, however, be
designed to handle the minimum quantity of peak throughput
(MT/day) and yearly handling capacity as prescribed.
’ Orivate enterprise at liberty to
’ Orepare own business model with regard to Size of market and Scale of
operation
’ Set up additional facilities to provide complimentary services
(input supply, processing, consumer goods etc.)
’ Collect user charges for the infrastructure and services provided

’ For basic services of aggregation at CC and auction at TM

ƛ User charge not to exceed 2% of the produce value
p"
 Expectation from the State Government

Reforms in AOMC Act

ƛ To allow the private enterprise:
’ Establish collection centres in the catchment area of the
TM
’ Source material from farmersƞ field directly in the
catchment area of the TM
’ Organize supply to traders, retail chain, processing industry
and to institutional buyers throughout the country
’ Cold storage/ warehouses of TM to act as delivery point for
trading in perishables on the commodity exchanges
’ Oack house of the TM to act as exit point for exports
pm
 Expectation from the State Government

Regulatory clearances:
’ Single license to operate in the entire State/adjoining States
’ Single point levy & collection of market fee
’ Autonomy in commercial operations of TM
’ Clearance of land use for the TM/CCs
’ Orovision of Civic amenities (including drinking water,
municipal waste disposal, police security, post office etc)
’ Statutory clearance from
Local authority
Town planning & Urban development
Revenue department
p½
 $% 
 
&'(
 

’ O  )
( *

+  
     
,$
 


 
 
  



 
( 
       


? 
      J,

O(  '(
       
  
 
(   

? 
    J,

 
(       

&   
    -  O 

. 
   
. / , 
  
p#
 Role of the Central Government

’ Support the project through participation in its equity capital

’ Terms for financing:
’ Up to 49% of project equity, including contribution from State
’ NHM/State will have the option to allocate its equity to farmers
organisations actively participating in the business of the project

’ Orivate enterprise to be selected through an open, transparent

competitive bidding process.
’ Oroject to be awarded to bidder with the request for minimum
Government equity participation.

p-
  !00#)0-

’ º   


 Rs.2300 crore

  Rs.1000 crore

’ u
 ! "

Participation in Equity Capital apm 00


Project Development Assistance ap00


General Awareness & Publicity ap00


Total Rs. 150.00 crore

p 
 Parameter Baseline status Expected outcome
J  )%  J   
 
  
 
 

 


   &  


 

  
!000p½000J

 


)   

!0

 
 
 

   J
( (
    
 

 % 




   (  
 ( (
+O      

 


  (  / 
 


 
 
   

  
  



  



 
 )) p#000!0000
 


 
 

& 1
"0#02 
3% 



       ½0-02
 
 


 
 
  

 
   


på
 a 


’ Attractiveness to Orivate Enterprises

’ Availability of Suitable Land

’ Success in establishing backward linkages with farmers

!0
 O
4

’ General Council of the NHM approved the concept on 14.12.05

’ Honƞble FM announced in the Budget Speech of 2006-07 for
setting up of Terminal Markets with an outlay of Rs.150 crore
’ National Conference on Terminal Markets held on 20.02.2006
discussed with States and Orivate Enterprises
’ There is adequate enthusiasm among Orivate Enterprises on
the proposal as seen in the responses to Expression of
Interest

!p
 Way Forward

’ Approval of the proposal by October end

’ Finalization of Bid Orocess/ Bid documents by NIAM
’ Inviting the bids by States and selecting the private enterprise
’ National Executive Committee of NHM approves & releases
the equity
’ Oroject Execution
’ General Council of NHM monitors the progress

!!
º

 

 India is the front ranking producer of many perishable commodities

Cattle / buffaloes
Milk Largest in the world
Largest Producer 283 million
91 Mn T

F&V
#2 in the world
151 Mn T

Fisheries
Marine: 2.7 Mn T
Inland : 3.1 Mn T
Food Grains
#2 in the world
(220 Mn T) Tea
Largest Producer
Sugarcane (0.85 Mn T)
# 2 in the world
(245 Mn T) Goat & Sheep
182 million

!m
 Indiaƞs competitiveness in global markets

?
    r  
 r

  
       

 pp

?
     r  
  
r  
 p


p
5p p 



p
p

p

5p

?
 r
 
r
r



 








p








p

&
* Ja+$&  
6 & $ 

 
 º




ƒ







º



ƒ



  
 è
 º 

º
 

 


 









 

è
 º

 




!"
#
$%%"


 º

 


º

 
&&


 
'




 

'


 


 
 

 




  


 

 




 ÔÔ
º

  Ô
Ô
ÔÔ
Ô
Ô
Ô
Ô Ô Ô Ô Ô Ô Ô ÔÔÔ
Ô Ô Ô Ô
   ÔÔ 

Ô
Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô ÔÔ Ô Ô
 Ô   Ô
Ô Ô Ô
Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô ÔÔÔÔÔÔÔÔÔÔÔÔ
Ô Ô Ô Ô Ô Ô
ÔÔ Ô Ô Ô 
Ô ÔÔÔ
Ô   Ô
 Ô
Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô ÔÔÔÔ Ô  
Ô 
Ô
Ô Ô Ô Ô
Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô
Ô


Ô Ô Ô Ô ÔÔÔÔÔÔÔÔÔÔÔ
 
 Ô ÔÔ
 ÔÔÔ
 O
 
ÔÔ  ÔÔ  Ô
Ô Ô Ô Ô Ô Ô Ô Ô ÔÔ Ô


Ô
 Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô
 Ô

 ÔÔ
ÔÔ
  Ô Ô Ô  Ô

 
 Ô Ô Ô Ô ÔÔ
Ô Ô Ô
Ô Ô  ÔÔ  Ô
Ô
Ô
Ô Ô Ô Ô Ô Ô Ô Ô Ô


Ô

Ô Ô
0
Ô ÔÔÔ
Ô
Ô 0Ô

0Ô
Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô
Ô Ô Ô Ô Ô Ô Ô Ô Ô  0Ô

0Ô

ÔÔÔ Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô
ÔÔÔ Ô


ÔÔ
ÔÔ Ô Ô Ô Ô Ô O

O Ô Ô Ô Ô Ô 
ÔÔ Ô


ÔÔ ÔÔ Ô Ô Ô ÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔÔ ÔÔÔÔÔÔ Ô Ô Ô     
ÔÔÔ

Ô

ÔÔ Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô 
ÔÔÔ

ÔÔ Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô 
ÔÔ
Ô

ÔÔÔÔ Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô 
ÔÔ Ô
Ô
Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô Ô 
ÔÔ Ô
Ô Ô Ô Ô
Ô
Ô
Ô
 º 


(













)*+



,-



  





.
/ 


 

+

/ 



 
0
1


0
 º 


1 Ñ

    
 
    


1

 

Ñ !"#


#


$

  

  %

º

   &
'( 
 
) 
 
* 

 
 
'  

* 



2     
    


  &&
&





 34
 "&
 
 &

  & 

 


 

 .  

 º 




 
./ 


0
+

.

+
+
.

0
.

 #(
+

)º5º-
./ 0

&



4 


5

 
 








+


+0
4 
5/1
º 

./ 0'º 



 


5

 

0
+


º
º
   &

ļ

 




 


ƒ 






ƒ








ƒ

  






ƒ



 






 





 º




"m
 0
00 0
ƒ
   

 0
0

 
  

!
ƒ"
  

  # #$


ƒ
# %




 
ƒ&

'#$

#
##


ƒ
#(
$

ƒ)'
#
&##*#

ƒ+
&#
 *"* +
#

ƒ
#

   #


& 



6

J