Value Chain for Vegetables & Fruits
Due to perishable nature and improper post-harvest handling, 25- 30% of the produce is rendered unfit for consumption. This increases cost of production with reduced returns. In this article, prospects of value chain for vegetables and fruits are explored, limitation identified and solutions to address the problems have been suggested…
- Mahesh Kumar, B V C Mahajan,
M S Dhaliwal
Agriculture in India, especially, in the north Indian plains, is passing through a critical stage. Current farming systems are difficult to sustain. Alternate options are being explored for their economic viability. Being high value crops and suitable for multiple cropping systems, vegetable crops cultivation offer viable option to diversify agriculture in Punjab. However, due to perishable nature and improper post-harvest handling 25- 30% of the produce is rendered unfit for consumption. This increases cost of production with reduced returns. In this article, prospects of value chain for vegetables and fruits are explored, limitation identified and solutions to address the problems have been suggested.
Prospects of Vegetable & Fruits Cultivation in Punjab
Potato is the major leading vegetable crop of Punjab having an area of 87.2 thousand ha with 55 % of the vegetable production. There is scope to increase area under processing potatoes since most of the raw material for processing in Punjab is imported from outside the state. Similarly, other than potatoes, pea, cucurbits, chilies, capsicum, onion, cauliflower, tomato, brinjal and carrot etc are major vegetables grown in the state. Turmeric, ginger and garlic production is also gradually picking up. Onion is another important crop for domestic use and export and can be promoted as an alternative crop in the state. Pea is the third important vegetable crop and is consumed as fresh and processed into frozen. It is available in the state from November to March.
Among fruits, the Punjab state leads in citrus production with the highest production of Kinnow, which occupies an area of 47.1 thousand ha contributing 67% of the total fruits produced in Punjab. Other important fruit crops are guava, mango, pear and peach which occupy considerable area in the state. Protected cultivation is another area which can boost the economy of Punjab state and can generate employment and entrepreneurship in the rural youth. The farmers are enrolling in vocational training course being conducted by Precision Farming Development Centre, PAU Ludhiana for honing their skills. Protected cultivation increases productivity of the land manifold, thus, improves the income levels of the farmers substantially. Precision farming practices are scaling new heights in Punjab with poly net house farming of vegetables picking up not only amongst the small and the marginal farmers but also among the farmers with large holdings. About 1200 poly net houses were built in Punjab occupying total area about 51 hectares. The high value crops viz. capsicum (coloured and green), seedless cucumber, tomato (both table and cherry), gerbera, lilium etc are being cultivated throughout the year. Both progressive and small/marginal farmers are adopting the technology to cultivate vegetables the year round. The Punjab Horticulture Department is reaching out to more and more farmers.
Status of Vegetable & Fruit Processing
Despite being the leading agrarian state of country, Punjab is way behind in food processing or value addition industry. A very few low capacity multi-commodity processing units are being managed by some self-help groups. Some self-help groups have also started supply chain of fresh vegetables directly to retailers and consumers. Establishment of processing industry for bulk consumption of the produce will help to stabilize vegetable marketing and sustain the fruit and vegetable production. Crop cultivars and agronomic practices should ensure good quality raw material availability for longer periods. Some of the processable varieties of different fruits and vegetables grown in Punjab are as under:
Establishment of Food Parks
To enable small and medium scale units to attain viability by defraying cost of major facilities such as R & D lab, cold storage, warehousing, pack house etc at present, one food park project at Sirhind, district Fatehgah Sahib is being implemented by PAGREXCO. Another food park has been approved by the Ministry of Food Processing Industries (MoFPI) which is being implemented by International Mega Food Park Ltd at village Dhabwala Kalan district Fazilka. Recently, one more food park has been approved by MOFPI at Ludhiana (Ladhowal).
For value addition and preservation infrastructure, MoFPI has approved two cold chain projects in the state. One project at village Rajaur, dist Kapurthala is complete and has started commercial operations. Another project at village Channo District Sangrur is at an advanced stage of completions.
Establishment of Cold Chain
Cold chain is a logistic system that provides a series of facilities for maintaining ideal storage conditions for perishables from the point of origin to the point of consumption in the entire supply chain. The chain needs to start at the farm level (e.g. harvest methods, pre-cooling) and cover up to the consumer level or at least to the retail level. A well-organized cold chain reduces spoilage, retains the quality of the harvested produce and guarantees a cost-efficient delivery to the consumer given adequate attention for customer service.
Benefits of Cold Chain
Benefits to farmers or producers
• Increasing income to the farmers
• Helping in price stability
• Checks the glut like situation
Benefits to the consumers
• Price stability
• Year round availability
• Ensured quality
The main feature of the chain is that if any of the links is missing or is weak, the whole system fails. The Cold Chain Logistics Infrastructure generally consists of:
• Pre-cooling facilities
• Cold Storages
• Refrigerated Carriers
• Information Management Systems (Traceability and Tracking etc.)
The cold chain operations start right from the field and ends until the commodities reach to the consumers in good quality. The main steps involved during cold chain are:
Existing post-harvest and cold chain infrastructure for vegetables and fruits in the state:
i) Cold Storages:
At present, a total of 550 cold storages are available in the state, which are mostly used for storage of potato. Punjab Mandi Board has also established state-of-the-art post-harvest infrastructure in 12 fruit and vegetable markets of Punjab comprising of 16 multi-chamber cold storages each having capacity of 50 MT and 52 ripening chambers with 10 MT capacity each.
ii) Mechanical Washing & Grading Lines:
At present, there are five mechanical washing, grading and waxing plants established by Punjab Agro Industries Corporation (PAIC). These washing and waxing plants are established at Chhauni Kalan and Kang Mai in Hoshiarpur district, Abohar, Jattan Tahliwala in Ferozepur district and Badal in Muktsar district. Besides, many progressive growers (more than 100) have also installed such facilities privately at their own farms.
iii) Processing plants:
The Punjab Government through its agency Punjab Agro Juices Limited (PAJL) has established two pilot scale processing units at Hoshiarpur and Abohar. Plants have capacities to handle 20 MT per hour citrus fruits and 10 MT per hour of other fruits and vegetables with cold storage as well as deep freezer capacity of 1000 MT each at both the plants. The machinery for the plants has been procured from CFTSPA Italy, a leading international food engineering company. The plants are designed to process Kinnow and debitter the juice and have the capacity to process other fruits and vegetables such as tomato, carrot, pomegranate, papaya, guava, pear, pumpkin, melons, chilly, jamun, mango, strawberry, litchis, amla, aloe-vera etc. The processing plants can handle pulp and store all the concentrates and single strength juices at one facility. PAJL has also been doing job work for large domestic and multi-national companies.
iv) Centre of Excellence:
In a bid to enhance skills of the farmers by providing training in latest agriculture techniques, the Punjab Government has established three centres of excellence one each for vegetables at Kartarpur (Jalandhar), for fruits at Khanaura (Hoshiarpur) and for potato at Dhogri (Jalandhar). The center at Kartarpur has been established in sync with the Indo-Israel agreement. It is aimed at to make the Punjab farmers aware of the latest technological and scientific advancements in cultivation of vegetables. The center of excellence at Dhogri is being established in joint collaboration with Indo-Dutch joint agriculture work group with a focus on quality of seed potato, suitable farm mechanization and proper disease management technologies etc.
v) High-tech Pack Houses:
Five pack houses with cold storage and grading or sorting lines have been established by PAGREXCO at Mushkabad (Ludhiana), Saholi and Lalgarh (Patiala), Kangmai (Hoshiarpur) and Babri (Gurdaspur).
vi) Self-help groups:
At present, few cooperative societies like FAPRO, Unati, KAFRO etc are proving role model for development of rural entrepreneurs and income as well as employment generation.
vii) Establishment of private sectors in Punjab
• Field Fresh Foods Private Ltd: It is a joint venture between Bharti Enterprises and Del Monte Pacific Limited. For fresh vegetables, Field Fresh Foods has an Agriculture Centre of Excellence (ACE) at Ladhowal, Ludhiana in Punjab, which is one of the largest agricultural R&D facilities of its kind and is spread over 300 acres with a state of the art protected and open field cultivation for value added vegetables. At ACE, the advanced technologies and agricultural best practices are showcased to partner farmers in order to help them in enhancing their agricultural productivity and farm income in an environmentally sustainable manner. Field Fresh Foods is engaged with over 4000 partner farmers across 5000 acres in Punjab and Maharashtra, who are Global GAP compliant and grow vegetables for export to Europe. The company offers processed food and beverage products in India under the brand Del Monte and fresh vegetables in its export markets under the brand Field fresh.
• Namdhari Farm Fresh: Namdhari’s Fresh handles more than thousand tons of fresh vegetables and fruits at domestic and international market. The produces are mainly destined to Europe, Australia and the Middle East. After the success in seed world, Namdharis have diversified into production, distribution and export of fresh vegetables and fruits under the name “Namdhari’s Fresh” To ensure the freshness of the vegetables till it reaches the consumer, the company is having a continuous cold chain network right from the point from where the produce is harvested. The harvested vegetables are transported in refrigerated trucks which also help in the removal of the field heat. From the refrigerated trucks, the vegetables are transferred to the pre-cooling room. The certification is done by the Dutch accredited certifying agency SKAL, with a symbol EKO which is recognized in most of the Europe and the north American countries. It has become India’s first vegetables growing and exporting firm, which has received GLOBAL-GAP Certificate. The pack house is under implementation of BRC and HACCP, however all the norms, essential for the same are practiced.
• PAGRO Frozen Foods Private Ltd: It is the largest private integrated vegetable processing plant incorporated in 2007 in Punjab. The major product is frozen green peas but it also processes potato, onion, carrot, sweet corn etc. With daily processing capacity of 550 tons (50000 tons vegetables / year), PAGRO in fact is the largest plant in South East Asia. The plant runs for 280 days a year. It receives about 90% of the raw material from outside the state.
• List of some processing units in Punjab
Tomato Processing & its scope
According to the World Processing Tomato Council (WPTC), an estimated 41.37 million tonnes (MT) of tomato (26% of global production) worldwide were processed into value-added products in 2015. By comparison, less than 1% of India’s tomato production currently gets processed into such products. An estimated 130,000 tonnes of tomato were processed in India in 2015, which is 0.3% of the global tomato processing market. Tomato paste is an important product because it is used as the base for a wide range of other products. A wide range of value-added products are produced from tomato including tomato juice, paste, diced/peeled tomatoes, strained tomato pulp, ketchup, pasta, pickles and pizza sauces, salsa, gravies, ready-to-eat (RTE) curries and tomato-based powder products. Processed tomato products have wide application in the household, food processing industry, snack foods, hotels, restaurants and fast food retail chains. The process involves washing and grading tomatoes and then boiling them in steam jacked kettles before pulping in a continuous pulper, where skin and seeds are separated from the pulp. The filtered extracted pulp is the basic material from which other products are made. The recovery of pulp varies from 40% to 50% depending upon the quality of tomatoes. A recent survey by ASSOCHAM (the Associated Chambers of Commerce of India) conducted in leading Indian cities indicated that the demand for tomato puree and ketchup has surged by 40% in just the month of June 2016 due to surging fresh tomato prices and a trend towards easier-to-cook meals. India’s annual ketchup consumption is estimated at 13,000 tonnes with a market valuation of Rs 1.8 billion (USD 28 million). Nestle’s Maggi dominates the ketchup market with a 37% market share followed by Unilever’s Kissan (29%) and Heinz (10%). Tomato paste production appears to be commercially viable when processing facilities are based in and around key Indian tomato growing areas. Though the market for processed tomato products is expanding, the processing industry is often confronted with the problem of limited supply of processing tomatoes. Quality parameters for processing include color, total soluble solids, sugar content and firmness for which existing Indian tomato varieties currently available in India are considered unsuitable. The most popular market type for the fresh market is acidic, and highly suitable for curries and other common dishes. Processors are required to neutralize this acidity with increased dosage of sugar resulting in higher production costs. Despite the high potential for growing tomatoes, low yields increase the cost and the risk of growing tomatoes resulting in depressed farmer incomes.
Punjab Agro Juices limited processing facility at Hoshiarpur
State-of-the-art pack-house, cold store and ripening facility at fruit and vegetable market, Ludhiana
PAGRO plant at Fatehgarh Sahib (Punjab)
Pre-cooling of fresh produce at Namdhari pack house, Ludhiana
Indian fresh produce from Punjab in UK
Baby corn being handled at low temperature at field fresh facility, Ludhiana
Leading Indian Tomato Paste Makers & Product Manufacturers
Hindustan Unilever: HUL’s Kissan brand is India’s second-most popular ketchup brand with a market share of 25%. HUL was one of the first processing firms to institutionalize farm-gate sourcing of tomatoes from small holder farmers in Nasik district in 2011. Kissan partnered with smallholder farmers, a local tomato paste processor named Varun Agro and agri-input supply companies to establish a supply chain aimed at producing tomato paste locally that could be used as an input into its ketchup production process. Unilever sourced 40,000 tonnes of tomato from India in 2011, some 60% of its requirement for ketchup production.
Field Fresh Foods or Del Monte: India’s third largest processed tomato products maker, Field Fresh manufactures ketchup, pasta and pizza sauce under the Del Monte brand at its factory is located in Krishnagiri. It has established a 120 ha R&D farm at Ladhowal, near Ludhiana where it is undertaking tomato production trials including specialized cultivars for the processing industry and the application of mechanization for tomato cultivation and harvesting.
Nestle India: Nestle is India’s leading ketchup maker with a market share of 37% through its Maggi brand. Nestle also produces tomato soup mixes competing against Knorr and other leading brands. Nestlé India collaborates with suppliers to source raw materials locally under its Supplier Development Program though it also uses its global supply chain to import raw material for ketchup production in India.
Global Green: This Bangalore-based processor and exporter commenced large scale contract farming of hybrid tomatoes in 2012 to meet the growing demand for tomato paste and tomato paste based sauces in India. It has promoted the use of processing hybrid varieties from United Genetics USA like UG-37, UG-157, UG-52, amongst farmers which have high lycopene content. It established farmer groups and small cooperatives to enable production volumes for its processing needs and to improve quality compliance through a cluster-based approach. Global Green sources tomatoes over the two peak seasons annually from farmers in Andhra Pradesh as well as from Kolar and adjoining areas of Karnataka which are processed at the facilities of Srini Food Park in Chitoor, Andhra Pradesh. Global Green processes over 20,000 tonnes of fresh tomato each year. Using paste produced at the Srini Food Park, it produces value-added tomato based products under the Tify brand including ketchup, pasta sauce, and tomato blend and pizza sauce.
Indira Foods: Established in 2008, Indira Foods produces tomato ketchup for the retail and institutional segments with a focus on the southern Indian market. With capacity to process 30 tonnes/day it has a 70% market share of sales to hotels, restaurants and airlines in Karnataka apart from supplies to Global Green and Namdhari Group. The company procures tomatoes from Kolar district in Karnataka.
Cremica Group: It produces tomato ketchup, puree, pasta sauce, dips and Indian gravies at its production facilities in Ludhiana (Punjab) and Noida, near Delhi. Apart from its retail products, the company supplies to food chains like McDonald’s, Barista, Café Coffee Day, Pizza Hut, Domino’s and Papa John’s as well as to institutional partners and private labels like Big Bazaar, Spencer’s, Taj Group, ITC, Jet Airways and Air India.
Dabur India: It is a leading producer of tomato puree, tomato juice, soups and chutneys under its ‘Homemade’ retail brand. Tomato processing operations commenced in 2011 at its processing plant in Siliguri (West Bengal) while juices are produced at its factory in Nepal.
Capricorn Food Products: Capricorn is one of India’s largest independent tomato paste makers supplying paste and puree to leading processors and private labels including Hindustan Unilever, Nestle and Field Fresh. It has processing facilities for paste making in Nashik (Maharashtra) and puree production in Koyna (Maharashtra), Krishnagiri (Tamil Nadu), Chitoor (Andhra Pradesh). In 2013, Capricorn established a plant in Nashik, Maharashtra with the capacity to produce 100 MT of tomato paste every day. During off season from April to July, Capricorn’s paste making units process mango pulp to maintain round-the-year operations.
Nijjer Agro Foods: An Amritsar-based tomato paste manufacturer supplies the product to Nestle, Del Monte and other processed food makers in the northern Indian region.
GD Foods: Produces both tomato paste and processed products like ketchup under its ‘Tops’ brand at its plant operations in Tarn Taran (Punjab). It currently operates plant facilities producing 42,000 tonnes per annum and supplements tomato processing with chilli and apple products. For tomatoes, it undertakes contract farming over 400 ha with farmers in Punjab.
Mother Dairy: The company produces tomato paste and its Safal brand of tomato ketchup at its 23,000 tonnes per annum pulp and concentrate unit near Bengaluru in Karnataka. Mother Dairy partnered with Bayer Crop Science to improve tomato production amongst farmers in Chickballapur and Tumkur districts of Karnataka for its processing needs. Bayer Crop Science identified tomato varieties suitable for processing and scientifically raised seedlings of the short listed varieties. These were then provided to some 361 farmers for further cultivation on 280 hectares under its supervision and improved crop production practices including crop protection techniques were applied as well as the internalization of traceability processes. As a result, tomato yields of farmers are reported to have increased from 35 tonnes/ha to 45 tonnes/ha. The company also announced in February 2016 plans to develop a new puree production and processing unit in Ranchi in Eastern India. Mother Dairy also sells frozen tomatoes in the Delhi-National Capital Region which it processes at its facility in West Delhi.
Godrej Beverages and Foods: Godrej targets the home cooking segment with its Smart Cook tomato puree range of products.
GRG Foods: Bangalore-based food products company manufactures its Spego brand of tomato ketchup and Revathi brand of tomato-based powders and mixes for the Southern India market.
National Agriculture Co-operative Marketing Federation: NAFED operates a tomato paste and ketchup production facility in Vellore (Tamil Nadu).
ITC Group: ITC produces a range of ready-to-eat (RTE) products for the Indian and export market under its kitchens of India brand. This includes curry pastes, sauces and chutneys which include tomato as an important ingredient.
Griffith Laboratories: Griffith is a US-based specialized condiments producer which manufactures Indian paste and powder mixes at its Bengaluru facility for food services institutional clients including hotels and restaurant chains in India and overseas.
Chordia Food Products: Chordia produces tomato ketchup, paste and mixes at its factories in Shirwal close to Pune (Maharashtra) and Chennai and Dharwad (Karnataka) for both the domestic retail market and supplies to institutional clients. With an installed capacity of 2.5 tonnes per day it previously supplied tomato paste to Nestle but now consumes most of its processed paste.
Following are constraints that why farmers are not interested in growing vegetables/fruit for processing:
• The quality of fruits and vegetables is not uniform
• Lack of processing units in crop production areas
• Costly seed of private companies
• The domestic demand for processed products is quite low due to seasonal availability of most fresh fruits or vegetables almost throughout the year
• At all stages, manpower involved in logistics and marketing is not fully aware of produce requirements, leading to loss in quality and value
• Lack of contract farming
• Delay in payment to growers by processing units
• Lack of good behaviour of processing units towards farmers
• Lack of mechanization in crop cultivation and handling
• Lack of varieties suitable for processing purpose
• Diseases and insect-pest problem
• Erratic and costly power supply
• Inadequate pricing by processors
• Poor rural infrastructure affecting transport
• Viability of processing to remain a question mark for many reasons,
• Increasing area and productivity of vegetables is not the answer to Punjab’s diversification and thereby value chain issues, unless all farmers are a part of a modern value chain structure.
• There is periodic glut of particular fruit and vegetable, which can be managed if proper post-harvest infrastructure including cold chain is created both at farm and market levels
• If middle men are present in the chain, they should act as facilitators to add value to the produce by way of consolidation, wholesale activities, processing, storage, packaging and transportation.
• There is need to strengthen linkages between farmers and food processors
• Innovative practices like contract farming needs to be encouraged. Contract farming can fill up this gap by providing the farmers with quality inputs, technical guidance and management skills
• Additional skills and expertise required for high-value markets need to be developed.
• In order to push diversification in agriculture sector, Punjab must focus on research & development, extension and training services in post-harvest management, distribution and marketing of horticultural crops.
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