Linking urban consumers and rural farmers in India: A comparison of traditional and modern food supply chains

Minten, Bart; Reardon, Thomas; Vandeplas, Anneleen. International Food Policy Research Institute (IFPRI) Discussion Paper 883, July 2009

Abstract 

Food supply chains are being transformed in a number of developing countries due to widespread changes in urban food demand. To better anticipate the impact of this transformation and thus assist in the design of appropriate policies, it is important to understand the changes that are occurring in these supply chains. In a case study of India, we find that overall urban consumption is increasing; the urban food basket is shifting away from staples toward high-value products; and modern market channels (modern retail, food processing, and the food service industry) are on the rise. We document differing practices in traditional and modern food supply chains and identify an agenda for future research.

Resources from the Regoverning Markets Programme relevant to South Asia are available to download and read.

Source:  Retail Reporter 7 June 08

India is a diverse country home for four of the top 10 global billionaires and also home millions of people under poverty line. Retailers are not just embracing the urban Indians, we have ITC, Godrej-Future Group, DCM and others active in the rural Indian market. We compare the primary business goals of each of these rural retailers here.

Despite impact on small stores, 14-month-long govt-backed survey seeks faster big retail rollout, self-regulation. By Rasul Bailay and Udit Misra. Livemint.com 27 May 2008
 
New Delhi: Endorsing the opening up of India's retail market for branded chains despite evidence that clearly suggests small retailers will be hurt-at least initially-Icrier, a think tank, has asked the government to reduce the number of licences required to expand organized retail and to facilitate "a private code of conduct" for such retailers. The study, which Icrier took 14 months to finish after it was asked by the commerce and industry ministry to study the impact of organized retail on mom-and-pop stores, says if left alone, the unorganized sector, which accounts for more than 95% of all retail in India, will emerge as "a major bottleneck to raising productivity in both agriculture and industry".

Yahoo Finance India, 12 Feb 08

When he has a ready crop, Dnyaneshwar Nikam's day would often start with a phone call, typically to the local wholesale agricultural produce marketing committee (APMC) market, which has for decades been the only wholesale buyer of his produce.

These days, his phone list is a lot longer. It includes officials of Godrej Agrovet Ltd, Aditya Birla Retail Ltd and Reliance Retail Ltd and he carefully compares prices before promising delivery of his ripe but unharvested crop that day.

As Indians prepare for the army of retailers, who are drawing up plans to open stores in all sizes and price-ranges for them to buy from, the nascent industry is offering selling choices for farmers as well-from cooperatives to big retail firms to higher rates from APMC traders and even farmer-owned stores.

by Tanvir Ali, University of Agriculture, Faisalabad, Pakistan

Pakistan is the fourth largest milk producer in the world. About a third of the total milk produced by the rural families flows out to urban consumers and processing industries. In urban areas milk is available to common consumers in two ways: loose / unprocessed milk and packed / processed milk. Haleeb Foods Limited (HFL) is a local company that is at the forefront of product and packaging innovation. The main characteristic of the marketing innovation of HFL was the exclusion of big milk contractors from the supply chain in the late 1990s. Haleeb Foods works mainly with small-scale producers, directly (self-collection) or indirectly (contract collection). HFL has one of the largest nation-wide distribution networks delivering high quality products, even in the most remote areas, via a network of more than 1,100 distributors. Even though HFL is a company that insures the inclusion of small-scale farmers, there are still some limitations on its approach which might, in the long run, exclude small farmers.

New Delhi, March 11-15, 2007

The Conference explored innovative approaches and new business models for linking domestic and international consumer markets with rural entrepreneurs, producer organizations, and communities. Using a unique set of instrumental case studies of innovative business practices from across the world, the conference provided a forum for discussion and debate of how to best organize the agri-food sector so that it contributes directly to (a) reducing rural poverty, (b) increasing farm income and rural employment, and (c) promoting sustainable development. An integral part of this process will be evaluating the role of public-private partnerships and industry in facilitating the establishment of alternative business models, driving technological advances and catalyzing entrepreneurial innovation within rural communities.

Examining the nature of CSR in India
Sood, A.; Arora, B. 

United Nations Research Institute for Social Development (UNRISD), Technology, Business and Society Programme Paper Number 18, November 2006 

Abstract [adapted from author by www.eldis.org ]

Although milk production has shown remarkable growth in Andhra Pradesh over the past decade, the potential role of dairy farming as a means to improve household incomes and create rural employment is far from being fully exploited. 

International Business Leaders Forum (IBLF) and the Pakistan Poverty Alleviation Fund (PPAF) have announced a strategic partnership to engage business as a partner in sustainable development in Pakistan's rural communities. The partnership includes Nestle Pakistan, and has a focus on the dairy sector.