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From Farm to Fork: Promoting Market Linkages

From Farm to Fork: Promoting Market Linkages. August 29, 2013 Presented on behalf of: Gramin Vikas Trust Sunil Chander Sharma. Scheme of Presentation. 1. Brief Introduction 2. Core Strategies

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From Farm to Fork: Promoting Market Linkages

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  1. From Farm to Fork: Promoting Market Linkages August 29, 2013 Presented on behalf of: GraminVikas Trust Sunil Chander Sharma

  2. Scheme of Presentation • 1. Brief Introduction • 2. Core Strategies • 3. Common Drivers • 4. Good things to do while establishing Market Access and Linkages • 5. Things to avoid • 6. Brief narration of Experience of GVT • Q&A

  3. 1. Introduction • Apart from agricultural production, equally important to find markets for produce, especially FFV • Such markets should provide stable and sufficient demand for expected produce • Marketing channels along with supply chain mechanisms must remain financially and qualitatively efficient • Stakeholders must remain gainfully employed and must profit from it

  4. 2. Core Strategies • 1. Any such initiative must have the expertise and competency as well as management skills to carry out the business of such kind • 2. The scale of operations should be financially viable- size big enough to cover costs • 3. The suite of products and services should be large enough to keep customers interested

  5. 3. Common Drivers • 1. Understand the geography, society and climate of your area of production (after soil and water considerations) • - Your choice of produce will depend on this, not anything can be grown anywhere • - Readiness and skills along with social orientation of people will determine whether they will seriously take up production on a larger scale or not • - Distance from large markets will determine the viability of transporting and selling to such markets • - Aspiration of the organization whether it will cater to the local market or far way larger market will determine the desirable scale of production

  6. 3. Common Drivers…contd. • 2. Know this whether you are scaling up and organizing linkages in an already producing area or introducing production of something that is new to the area? 3. What is the professional expertize and experience of your team- it must match with your viable plan 4. Make a financial plan for the period after which, the initiative will become viable on its own- take a pessimistic picture and size up the sources of funding before taking a plunge

  7. 3. Common Drivers… contd. • 5. Choosing right partners for different activities in the supply chain is important • - Retailing is a completely different art from bulk trading • -so is growing from processing or packaging • - storing and preservation in case of long distance haulage and complex retailing is quite specialized Such activities, if taken up, must be with the involvement of expert professionals 6. Branding is even more complex and investment heavy- requiring deeper pockets

  8. 4. Good Things to do… • 1. Collaborate; don’t try to do everything by yourself; go by comparative advantages- Let each of the partners do what one is best at • 2. Try to deal with minimum number of items that keeps your customers (buyers) sufficiently interested in you • 3. Aim for scale (size) before scope (variety)

  9. 4. Good things to do… contd. • 4. Encourage production of limited number of items on larger areas of land • 5. Try to link with larger markets • 6. Be extremely careful about costing involved with any marketing plan or strategy- don’t miss expenditure heads • 7. In the early stages, prefer larger and stable buyers even if it means lower prices • 8. Prefer agreed fixed prices over market driven ones, even if it means lower prices

  10. 4. Good Things to do… contd. • 9. Increase portfolio of products, encourage association with small buyers, undertake risks of market price driven sales to increase sale value only after your business has stabilized and your risk taking capacity has improved • 10. Indulge in a particular activity of the supply chain only if you have the capacity for it; do not get attracted by it just because it is known to provide higher margins • 11. Make the growers partners in the enterprise by having a legal framework for sharing margins- it will hold you in good stead if things went wrong- you will get tremendous support from them • 12. Have banks and financial institutions coming in and providing credit- remember you are not a financial services entity and you are not good at dealing with risks of financing

  11. 4. Good Things to do… contd. • 13. Have technical organisations in agri and horticultural techniques and experts coming in- they are likely to know better about what inputs and techniques to use • 14. Respect and welcome commercial market people and organizations- they are better at marketing, branding and commercialization of technology in this sector • 15. Try to differentiate your products through quality and your service through reliability • 16. First SURVIVE then THRIVE then HELP OTHERS THRIVE!

  12. 5. Things to Avoid • 1. Never depend on a single bulk buyer- it can cut your jugular anytime • 2. Do not confine yourself to small local market- any supply jump will glut the market • 3. Don’t take too much of financial exposure- bring in banks or financial institutions • 4. Don’t take excessive marketing risks- let marketers make money. You can take it up when your pockets are deep enough • 5. Don’t remain blind to technological and scientific advancements- it can hurt you over your quality, productivity, pricing and demand

  13. 6. Experience of GVT • 1. Growing- • geographical and varietal selection (where to grow) • Market selection (where to sell) • Techniques and input selection • Differentiators- organic • Demonstration and dissemination (more growers) • Financing (for you and growers) • Viability

  14. 6. Experience of GVT… contd. • 2. Aggregation, Transportation and Selling • Hub Selection • Expert manpower selection • Financials and costing • Supply chain partners • Buyer selection • Managing relationships • 3. Retailing • Market (city) selection • Sourcing • Building processing capacity • Building teams for various activities • Building retailing network

  15. 6. Experience of GVT…contd. • 4. Convergence or Synergy among the three activities • Knowing how these components behave on a real time basis • Culling out economically viable activities that can be successfully done while improving earnings of the produce growing community • Providing right prices and assured demand for growers • Improving productivity; bringing new land and growers under its fold; improving techniques & quality of produce; participation of growers in value chain • Making it jointly owned by all stakeholders- growers, supply chain owners, marketers, retailers

  16. Thank You! • Q & A

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