Transforming India’s Fruits and Vegetables Sector: Learning from Dairy to Build a Resilient and Profitable Future
Introduction
India’s fruits and vegetables sector holds immense potential, yet it remains underdeveloped compared to other segments of agriculture. While India has successfully revolutionised its dairy industry through the cooperative model pioneered by Amul, the fruits and vegetables sector still faces inefficiencies such as high post-harvest losses, weak value chains, and a lack of institutional support. Despite being the second-largest producer of fruits and vegetables globally, the sector suffers from price volatility, fragmented supply chains, and limited value addition.
The success of the dairy industry, built on farmer-led cooperatives and strong institutional backing, offers valuable lessons that can be adapted to the fruits and vegetables sector. In particular, the model of Sahyadri Farmer Producer Company Limited, based in Maharashtra, provides a strong case for how farmer collectives can overcome these challenges and create sustainable, high-value agricultural enterprises.
This essay explores the key lessons from India’s dairy industry that can be applied to the fruits and vegetables sector. It examines the structural challenges facing fruit and vegetable farmers, highlights the success of Sahyadri Farmer Producer Company Limited, and proposes strategic interventions to scale up high-impact farmer-led organisations, strengthen value chains, and introduce institutional mechanisms that can ensure long-term growth.
Lessons from India’s Dairy Revolution
India’s dairy industry was once highly unorganised, leaving small-scale farmers vulnerable to middlemen, price fluctuations, and a lack of access to markets. The introduction of the cooperative model under Operation Flood transformed the industry, making India the world’s largest milk producer. The Gujarat Cooperative Milk Marketing Federation, better known as Amul, played a pivotal role in this transformation by creating a structured value chain that eliminated exploitative intermediaries, ensured fair pricing, and prioritised farmer ownership.
The core components of Amul’s success included:
- Farmer-Owned Cooperatives – Farmers collectively owned and operated the supply chain, ensuring they retained a higher share of the final consumer price.
- Three-Tier Cooperative Structure – Milk collection took place at the village level, processing was managed at the district level, and state federations handled marketing and distribution.
- Cold Chain Infrastructure – Investments in storage, refrigeration, and transportation reduced spoilage and improved quality control.
- Market Integration – Amul successfully built a national and international brand, increasing demand and stabilising prices for dairy farmers.
- Technology and Quality Control – Automated milk testing, digital supply chain management, and strict quality assurance helped maintain high standards.
These principles can be adapted to the fruits and vegetables sector, but with modifications to account for the unique challenges of perishability, seasonality, and crop diversity.
Challenges in the Fruits and Vegetables Sector
Despite India’s significant production of fruits and vegetables, the sector continues to lag behind due to several structural weaknesses. Unlike dairy, where milk is a single commodity with a uniform value chain, the fruits and vegetables sector involves multiple crops, each requiring distinct handling, storage, and processing methods. This complexity results in inefficiencies that reduce farmers’ earnings and limit the sector’s growth.
High Post-Harvest Losses: One of the most pressing issues in the fruits and vegetables sector is post-harvest loss. Nearly 8.1 percent of fruits and 7.3 percent of vegetables are lost in the value chain, amounting to a staggering financial loss of approximately ₹1.53 lakh crore annually. The primary reasons for this wastage include inadequate storage facilities, poor transportation infrastructure, and limited access to processing units.
Fragmented Supply Chains and Low Farmer Earnings: Farmers in the fruits and vegetables sector typically receive only 30 percent of the final consumer price, compared to the 75–80 percent received by dairy farmers. The presence of multiple intermediaries erodes profitability, while price fluctuations create uncertainty for small farmers. The lack of direct market access further limits farmers’ ability to negotiate fair prices.
Lack of Institutional Support: Unlike the dairy sector, which benefited from the establishment of the National Dairy Development Board, there is no equivalent institutional body to oversee and support the growth of the fruits and vegetables sector. The absence of a coordinated national strategy has left farmers reliant on fragmented local markets, subject to unpredictable price swings and inadequate policy support.
Sahyadri Farmer Producer Company Limited: A Model for Success
Sahyadri Farmer Producer Company Limited, based in Nashik, Maharashtra, offers a compelling example of how farmer collectives can transform the fruits and vegetables sector. Established in 2004 with just 10 farmers, it has grown into India’s largest farmer-producer company, integrating over 26,500 farmers across 31,000 acres.
Farmer-Centric Model: Sahyadri Farmer Producer Company Limited operates on a farmer-owned, profit-sharing model. Unlike traditional supply chains where farmers receive less than one-third of the consumer price, Sahyadri ensures that farmers receive 55–60 percent of the final sale price. This is achieved through direct market linkages, value addition, and the elimination of unnecessary intermediaries.
Processing and Value Addition: One of the key differentiators of Sahyadri Farmer Producer Company Limited is its investment in processing infrastructure. The company has built extensive facilities for sorting, grading, and cold storage, reducing post-harvest losses and improving price stability. In addition, it has diversified into value-added products such as processed tomatoes, fruit pulp, and dried fruits, ensuring that farmers benefit even during market gluts.
Export-Oriented Approach: Sahyadri Farmer Producer Company Limited has successfully positioned itself as India’s largest grape exporter, supplying 41 countries, including the European Union and United Arab Emirates. By adhering to strict international quality standards and leveraging blockchain technology for traceability, it has enabled small farmers to access premium global markets.
Strategies for Scaling the Success of Farmer-Led Organisations
To replicate the success of Sahyadri Farmer Producer Company Limited across India, several key interventions are required.
Scaling Up High-Impact Farmer Producer Organisations: The government has already set a target of establishing 10,000 farmer producer organisations, with 8,875 successfully registered as of 2024. However, simply increasing the number of these organisations is not enough. Financial support, access to infrastructure, and capacity-building programmes are essential to ensure their long-term viability.
Revamping Operation Greens: Operation Greens, launched in 2018 to stabilise the prices of tomatoes, onions, and potatoes, has had limited impact due to inadequate funding and weak implementation. Expanding this initiative to include a broader range of fruits and vegetables, while increasing financial allocations, could significantly improve price stability.
Commodity-Specific Value Chain Development: Different fruits and vegetables require distinct processing and storage solutions. A one-size-fits-all approach will not work. The government must adopt a commodity-specific strategy, similar to Sahyadri’s specialisation in grapes and tomatoes, to maximise value creation.
Creating a National Fruit and Vegetable Board: A dedicated institutional body, akin to the National Dairy Development Board, is needed to oversee and coordinate policy interventions for the fruits and vegetables sector. This board could provide research support, enforce quality standards, streamline market linkages, and promote India’s produce on the global stage.
Conclusion
The fruits and vegetables sector holds the potential to become a major driver of rural prosperity and economic growth in India. By applying the lessons from the dairy sector—through farmer-led cooperatives, integrated value chains, and strong institutional support—India can transform the sector to benefit millions of small farmers.
The success of Sahyadri Farmer Producer Company Limited demonstrates that this transformation is possible. Scaling up similar models, investing in infrastructure, and introducing policy reforms can ensure that farmers receive a fair share of consumer prices while enhancing India’s position in global agricultural markets. With the right strategies, India’s fruits and vegetables sector can achieve a revolution similar to what the dairy industry accomplished decades ago.
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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH
