Interim Report 2

Nagpur – Amaravati Region

Nagpur – Amaravati region is in the eastern most region of the state of Maharashtra. Administratively, the region is divided into two divisions namely, Nagpur Division and Amaravati Division. Nagpur and Amaravati divisions makeup the region of Vidarbha. Nagpur division consists of five districts namely Bhandara, Chandrapur, Gadchiroli, Gondia, Nagpur and Wardha. Amaravati division consists of five districts namely Akola, Amravati, Buldhana, Washim and Yavatmal.

These two divisions together account for 31.6% of total area and hold 21.3% of total population of Maharashtra. Vidarbha's economy is primarily agricultural. The region is rich in forest and mineral wealth. The main cash crops of the region are cotton, oranges pulses and soya beans. Traditional crops are sorghum (jowar), pearl millet (bajra) and rice.

Based on the discussions with the Maharashtra State Agricultural Marketing Board (MSAMB), and other stakeholders, out the ten districts stated above two districts Nagpur and Wardha- from Nagpur region and three districts - Akola, Amravati and Yavatmal- from Amaravati region were selected for the purpose of detailed value chain study. The table below summarizes the focus districts, selected production clusters in the identified districts and focus crops in the each of the selected production cluster. The production clusters were identified based on the inputs provided by MSAMB and state agriculture department.

District Akola (3) Amravati (3) Yavatmal (3)

Nagpur (2) Wardha (1)

Focus Crop Soyabean Jowar Pulses Orange Jowar Pulses Pulses Soyabean, Jowar Pulses

Taluka/Block Akola Balapur Murtizapur Warud, Morshi Morshi Daryapur Yavatmal Pusad Babhulgaon

Orange Soyabean Orange

Katol, Kalmeshwar Saoner Karanja

12 clusters as listed above have been studied in detail to assess the availability of existing infrastructure, map the value chain for the selected focus crops and to identify the critical gaps in infrastructure.

Apart from studying the focus production clusters, assessment of Agriculture related infrastructure in Nagpur was carried out. Nagpur is the largest city and a major aggregation and distribution location in the region.

Assessment of Infrastructure in the selected production clusters: 1. Saoner:

General Particulars Block Main Market and Sub markets Major crops

Details Saoner One Main Market and One sub market yard Soya bean : Grams : Pulses

Arrivals in 2007-08 (in mt)

20918 :

Arrivals in 2008-09 (in mt)

17013

1709 : 5474

Remarks Main APMC market at Saoner and One sub market at Khapa This is a large mandi for Soya bean followed by Pulses and Cotton. There are no arrivals of Orange in this mandi and farmers and Aggregators prefer to take the produce to Nagpur which is only at 30 km

Assessment of Infrastructure in APMC mandi in Saoner Total acreage 6.12 ha Area under use 4 ha Compound wall with gate Yes Auction Platforms

Yes

Ware house Yes Quality testing equipment No Administrative building Yes Farmer Guest house Yes Canteen Yes Water Facilities - drinking Yes Weigh Bridge No Number of registered commission agents 21 Number of registered traders 40 Cold storage No Internal Roads Good Assessment of Infrastructure in the Block Other Warehouse No Other Cold storage No Any Processing Unit Yes Private Investment - Collection, aggregation, extension, retailing No Any other infrastructure related to food in the Block No Connectivity Related Issues Nearest Large city Nagpur Connectivity by Road Good Connectivity by rail No Connectivity by air Nearest airport at Nagpur Assessment of Practices in the Mandi Elected marketing Committee Managed by body Commission charges 1.25 % on grains from farmers Price discovery Mechanism Open Auction Assessment of quality Visual Price display Good and prominent

5 auction platforms with well covered roof and cement platforms 2 numbers. One with 750 mt capacity leased out to private trader who stores fertilizers and one with 500 mt capacity used by commission agents mostly during the peak arrivals season In good condition In good condition In good condition In good condition

Only 4-5 active and large Only 10-15 active and large Not required

One Oil processing Unit

Saoner is 30km from Nagpur All season motor able road

2. Katol General Particulars Block Main Market and Sub markets Major crops Arrivals in 2007-08 (in mt) Arrivals in 2008-09 (in mt)

Katol Katol One Main Market and two sub markets Soyabean : Grams : Oranges 25899 :

5638 :

701

Remarks One main market at Katol. Submarkets in Katol and Kondhali This mandi is a large mandi for Soyabean and Pulses. This market was a large market for Oranges a few years back. However, the arrivals have come down to a large extent in the last few years.

Annual Revenue in 2008-09 Rs. 102.39 Lakhs Net Profit in 2008-09 Rs. 82.11 lakhs Assessment of Infrastructure in APMC mandi at Katol main market Total acreage 2 ha Area under use 0.5 ha Compound wall with gate No

Auction Platforms

Yes

Ware house Quality testing equipment

No No

Administrative building

Yes

Farmer Guest house Canteen Water Facilities - drinking Weigh Bridge Number of registered commission agents Number of registered traders Cold storage Internal Roads Assessment of Infrastructure in the Block

No No No No

Other Warehouse Other Cold storage

Any Processing Unit

Private Investment - Collection, aggregation, extension, retailing Any other infrastructure related to food in the Block

36 69 No Bad

Yes No

One plat form in dilapidated condition. This mandi is used in orange season only. Temporary thatched sheds are constructed during the season. No warehouse in this market. There are two warehouses in the Katol submarket, with a capacity of 500 mt In bad condition and not in use. The administrative building in Katol submarket is used. One farmer guest house at Katol sub market

Only 4-5 active and large Only 10-15 active and large

There are some private warehouses. Details not available at present.

Yes

There is one multi fruit processing unit in MIDC area established under Nagpur Orange Growers Association(NOGA) and given out on lease basis to Alliance Agro Pvt ltd. The facility reportedly has 3 processing lines, aseptic packing line, cold storage. However, there is a dispute between NOGA and Alliance agro and the issue is presently in the court of law and hence not under use. For Orange, there is a Katol Taluka Santra Utpadan Co-operative society. The society is a member of Mahaorange. However, they do not have infrastructure at present.

No

Information not available.

Yes

Connectivity Related Issues Nearest Large city Connectivity by Road Connectivity by rail

Nagpur Good Yes

Connectivity by air Nearest airport at Nagpur Assessment of Practices in the Mandi Managed by Administrator

Commission charges Price discovery Mechanism Assessment of quality Price display Settlement of the receivables

Warehouse receipt finance

Katol is approximately 30 km from Nagpur All season motorable road Railway station at a distance of 1 km

Marketing committee has not been elected for the last five years. There is a dispute between marketing committee and MSAMB pending in court and hence the mandi is managed by Government appointed administrator

1.25 % on grains from farmers, 3 % on oranges from farmer Open Auction Visual Poor Same day

Practiced in Katol sub market

Pledge financing scheme of MSAMB was introduced last year with good response from the farmers for Soyabean and Pulses

3. Kalmeshwar

Particulars Block Main Market and Sub markets

Major crops

KALMESHWAR Kalmeshwar One Main Market and two sub markets

Orange: Soyabean

Arrivals in 2007-08 (in mt)

1662: 12903

Arrivals in 2008-09 (in mt)

12855: 12889

Annual Revenue in 2008-09

Rs. 43.66 Lakhs

Remarks One main market at Kalmeshwar and submarkets at Brahmani and Kolhi The main market - Kalmeshwar is used used during orange season only. Brahmi sub market is for all the crops. Kohli submarket is a seasonal market for oranges and during the season, temporary thatched sheds are constructed Kalmeshwar is a major market for Orange, however, arrivals to the market have been coming down in the last few years. Year wise arrivals from 2001 to 2008 have come down from 3.2 lakh mt to 1.28 lakh mt.

Net Profit in 2008-09 Rs. 25.49 Lakhs Assessment of Infrastructure in APMC mandi Kalmeshwar Total hectares

Area under use Compound wall with gate

3.33 hectares

0.1 hectares

The mandi has only a weigh bridge and no other permanent structures. During orange season temporary thatched sheds are constructed by the commission agents

No

Auction Platforms

No

Ware house

No

No auction platforms are present in Kalmeshwar, however, in the submarket at Brahmani there are 3 auction platforms. No warehouse in the Kalmeshwar, but there 2 warehouse of 200 mt and 100 mt capacity in Brahmani sub market.

Quality testing equipment

No Administrative building cum weighbridge present. Full fledged admin building is at Brahamani Sub market.

Administrative building

Yes

Farmer Guest house

No

Canteen

No

Water Facilities - drinking

Yes

Weigh Bridge Number of registered commission agents

Yes 67 Nos

Only 20-25 are active

Number of registered traders

127 Nos

Only 15-20 are active

50 mt capacity

Cold storage

No

Internal Roads Assessment of Infrastructure in the Block

Yes

In poor condition

Other Warehouse

Yes

Private godowns present, but information not available

Other Cold storage

No

Any Processing Unit

No

Private Investment Collection, aggregation, Any other infrastructure related to food in the Block Connectivity Related Issues Nearest Large city

No No Nagpur

Connectivity by Road

Good

Connectivity by rail

Good

Connectivity by air Good from Nagpur Assessment of Practices in the Mandi Managed by Commission charges

Elected marketing Committee 6 % for fruits and vegetables and 1 % for grains

Price discovery Mechanism Assessment of quality during auction

Open auction

Price display Settlement of the receivables to farmers

Black board

Warehouse receipt finance

Not present

Visual

Same day

Kalmeshwar is 20 km from Nagpur

Year Wise arrivals of Orange in Kalmeshwar Mandi: Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Number of trucks of 3.5 mt 22643 93483 62356 55647 5755 30900 16626 36571

Qty in mt 79251 327191 218246 194765 20143 108150 58191 128000

Source: APMC Mandi, Kalmeshwar

While the availability of infrastructure has been assessed for each production cluster, the supply chain of the identified focus crop remains same irrespective of the production cluster. The value chain for selected focus crops is presented below:

Value Chain of Orange:

Area, Production and Seasonality:

Maharashtra, the largest orange producing State in the country, has 1.35 lakh hectares of area under cultivation with a production of 7.15 lakh metric tonnes. In Maharashtra, the major orange producing districts are Amravati, Nagpur, Yeotmal and Akola, of which Amravati and Nagpur alone account for about 0.94 lakh hectares with production about 5 lakh metric tonnes.

# 1 2 3

AREA AND PRODUCTION (2006-2007) District Area (ha) Production Lakh MT Amaravati 62117 3.29 Wardha 10186 0.54 Nagpur 32329 1.71 TOTAL 135028 5.54

The production of orange is spread into two seasons namely Ambia bahar and Mrug bahar. Ambia Bahar accounts for 20-30 % of the production. Arrivals for this seaons start in the month of October and end in the month of January. Mrug Bahar accounts for the balance 70-80 % of the production and it starts in the month of February and ends in the Month of April. The quality of fruit in Mrig Bahar is reportedly superior and is suitable for long distance transportation.

Production Management: Some salient features of production management are presented below:

•

Orange has been under production for over two centuries in Nagpur region and has achieved a unique identity and is called Nagpuri Santra.

•

Nagpuri Oranges are propagated by budding. The root stock of Jumberi or Rampuri is raised in the nursery. The method of shield budding is the most popular method for propagation.

•

The square system is the most popular system for plantation of oranges. The distance between plant to plant is generally kept 20 ft. In the square method, by maintaining the distance of 20 ft. from plant to plant, 277 plants of orange can be planted in one hectare.

•

An intensive care has to be taken of planted nursery up to 5 years. The trees start bearing economic yield from 6th year onwards and the

economic life of the trees continue for 12-15 years depending on maintenance. Intercropping with pulses, soya bean, ground nut and chillies is carried up to 5 years, however, some farmers continue intercropping even after 5 years Harvesting: Fruits are harvested when they attain full size, develop attractive colour (75% fruit surface colour changes from dark greenish into yellowish) with optimum sugar and acid blend. Picking of fruits is generally done manually without damaging the fruits either in the morning or in the evening hours.. Generally harvesting is carried out in either two plucking or single plucking.

Post Harvest Activities: After picking fruits kept overnight in open to dry oil exudates from fruit and to avoid black spots on the fruit surface. There is no farm level grading for the oranges irrespective of the marketing channel used to market the product unless the farmers plan to sell their product in distant consumption markets like Delhi, Mumbai etc by themselves. There is no farm level packing for the oranges unless the farmers plan to market the produce themselves in distant markets. The fruits are generally loaded into an open truck or tempo and sent to mandi for sale.

Marketing Channels/ Supply Chain:

Farmer

There are three marketing channels as detailed below. The various marketing channels also Channel 1 2 Channel 3 indicate the supply chain of Oranges produced in the studyChannel region. Pre harvest Contractor

Commission agent

Trader

Commission Agent in Distant market

Retailer in Local Market

Trader

Retailer in Distant Market

CONSUMER

The various actors involved in the value chain are Farmers, Pre-harvest contractors/aggregators, commission agents, traders and retailers.

Based on the point of sale, the above supply chains can be classified into three types: 1. At farm gate – Channel 1 – Accounts for 60 % of the produce 2. At APMC Mandis within Production Clusters – Channel 2 - Accounts for 35 % 3. At Distant consumption market – Channel 3 – Accounts for 5 % of the trade* *As per the trade and market functionaries

Both in the case of Channel 1 and Channel 2, Oranges brought from garden by various means of transport are properly heaped without causing any damages on the auction platforms covered with paddy straw in the market yards and auctioned for price discovery.

Unit of Trade: Oranges are traded either in Numbers or by weight. Each market has its own unit of trade. For example, in Kalamna APMC Market yard in Nagpur District, Oranges are traded by weight while in Warud APMC Market yard in Amaravati district they are traded in Numbers. The unit of trade in distant consumption markets is generally by boxes or crates.

Price Determination: Price fixation between the farmer and the Pre harvest Contractor (PHC) is by Negotiation. The PHC offer a price based on their information of price in their market, their experience and their projection of supply. Generally, the unit of trade between the farmer and PHC is in numbers. The PHC visits the orchards and randomly some trees are selected and the number of fruits are counted and then extrapolated for the entire garden. Though there is high

approximation in this method, most of the farmers prefer to sell by this channels as there are no marketing costs, harvesting is the responsibility of the PHC and the price risk is with the PHC. Price discovery in the APMC market yards, is by Open Call Auction method.

Grading: In all the markets grading is done manually. The grading is done based upon the size of the fruit. However, based on other physical properties like colour, shape, (oblong, high collared, deformed), maturity, puffiness, blemishes, physical damage (bruised and diseased) grading and sorting operations are carried out. Once the diseased and bruised fruits are discarded, based on size, fruits are graded into 7 grades. Traditionally, the seven grades have been identified on the basis of number of fruits of a particular size that will fill exactly a standard wooden box. To understand the grades, it is important to understand the packaging methods and packaging material. The seven grades and their characteristics are summarized in the next section.

Packaging: After the grading the fruits are packed in either wooden boxes or in plastics crates. Wooden boxes made of mango wood or any other wood locally available is used. The standard size of a wooden box is 18” x 12” x 12”. An empty wooden box weighs 2 to 2.5 kg. The wooden box is fabricated on the spot by specially appointed box maker. The labour charges for box making in Kalamna APMC market are Rs. 3.5 per box.

The fruits are stacked in layers in the wooden box. Depending on the size of the fruit the layers vary from 4-6. To avoid friction between the layers of fruits and to avoid moisture loss during transit each layer is separated from the other with paddy straw and waste papers. Once the fruits are filled, the top of the box is closed with the same wooden sheets using iron nails. They are then tightened using coconut fibre ropes. They are then marked using non-edible grade water soluble permanent color with the name of the trader so that it can be identified in the destination market. Packing cost with wooden boxes works out to be in the range of Rs. 50-55 per box These wooden boxes are not reusable. After they reach the destination market, the boxes are either thrown away or used as fuel wood. As per trade, nearly 40% of the trade at present is happening by wooden boxes. As per trade because of the use of wooden boxes, many mango orchards have been cut in the past few decades and at present there is virtually no mango orchard left.

In the last few years the use of plastic crates has increased. Mostly, plastic crates of 542 mm x 360 mm x 300 mm (outer dia) are in use. The weight of empty crate is comparable to a wooden box at 2.1 to 2.3 kgs. This standard crate can take 22-25 kg of fruit. Though the return logistics cost adds to the cost of the product, the ease of usage, easy availability and acceptance by trade in the destination markets has increased the usage of plastic crates. As per trade, 60 % of the volume is transported by plastic crates. Unlike wooden boxes, in case of the plastic crates, the fruit is not arranged in layers. The fruits are loosely packed in the crate and the sides and top are covered with waste paper. Then the paper is tied to the crate using nylon thread. The traders have their brand name/ trade name stenciled on the sides of the crates for identification.

Cost of transportation using crates varies from market to market. For example for Nagpur to Delhi, the cost of transportation including reverse logistics cost works out to be Rs. 65. While the one way transport cost for wooden boxes is Rs. 55. The traders using plastic crates save Rs. 45 per trip using crates in the subsequent trips to Delhi. However, because of the high upfront costs (Rs. 180 to 200 per crate), traders continue to use wooden boxes.

Grades in Orange: Grade name as # Grade per trade 1 Extra Large 96 Dana

Actual number of fruits 96

2 Large - 1

141 Dana

148

3 4 5 6

171 Dana 191 Dana 205 Dana 245 Dana

173 195 210 288

Large -2 Medium - 1 Medium -2 Small

Layers of fruits 4 layers of 24 each 4 layers of 30 each and one layer of 28 4 layers of 35 each and one layer of 33 4 layers of 39 each 4 layers of 45 each 6 layers of 48 each

Size in mm 75-80

Grade rank Third

70-75

First

65-70 60-65 55-60 50-55

Second Fourth Fifth Sixth

7 Waste

All other

Seventh

As can be observed from the table above, the number of fruits is higher than the grade name (number) except in case of Extra Large. Higher number of fruits are packed to ensure that the fruits are tightly packed. The trader compensates for the additional fruits by taking 100 fruits extra for every 1000 fruits from the farmer.

Storage: The traders in production clusters do not generally store the product. The operate in such a way that the product reaches the destination market within 3 days of harvesting. Transportation is carried out in ambient temperatures in open trucks. Oranges are generally not stored for off-season sales in production clusters. If any trader wishes to store the product for off season sale, the same is done in the distant consumption market.

Value Chain – Cost Build up across the value Chain:

A value chain, indicating the various activities in the value chain, actors performing the given activity, cost buildup at every step has been mapped in this section. This value chain has been mapped for the supply chain having following characteristics:

1. The marketing chain follows Channel 2, i.e, Farmer to PHC to Commission Agent to Trader to Commission agent in Distant market to Trader/ retailer to Consumer 2. The cost of production for the farmer is only the variable cost for maintenance of one acre orchard per year. It does not include the cost for the first five years of orange orchard where there are no returns. 3. The Distant consumption market considered for this case is Azadpur APMC Mandi, in New Delhi 4. The packing material is wooden box of standard dimension 18” x 12” x 12” 5. Net weight of oranges in each box is 24 kg 6. Cost of capital and opportunity cost for the all the intermediaries has not been considered in cost build up and for calculating the spread 7. The Spread indicated is gross spread, excluding direct costs involved in handling of product 8. The cost of retailing, which includes the cost of shop, wages, rent etc has not been considered

9. The prices considered are average prices for the month of October in Nagpur and Delhi Market based on the data corroborated from traders. The same has been cross checked with the data from National Horticulture Board 2007-08 statistics 10. The grade mix for 1 mt of product has been considered based on feed back from only one trader. The same has to be cross checked with some more traders. 11. Wastages have been accounted at the level of packaging only. The next level of wastage is at the level of retailer, where data is not available Actor in Value chain Farmer Farmer Farmer Farmer Farmer PHC PHC PHC PHC PHC Commission Agent PHC PHC PHC APMC Mandi Trader Trader Trader Trader Trader Trader Trader Commission Agent Trader Trader Trader Trader Retailer Retailer Retailer Retailer Retailer

Activity Cost of production for the farmer Total production Cost of production per MT Pre-harvest Contractor price to farmer Net realization to the farmer Harvesting Loading Transportation Cost to mandi Unloading cost Price discovered in Local mandi Commission charges @ 6 % Miscellaneous Expenses Total Marketing Cost for PHC Net Realization to the PHC Marketing cess @ 1.05 % Sorting grading and packing charges Packaging material cost Moisture loss, damaged fruit etc Value of wastage Loading Cost Transportation to Delhi Market Price discovered in Delhi market Commission Charges @ 8 % Unloading cost at Delhi Miscellaneous Expenses at Delhi Total Marketing Cost for Trader Spread for the trader Mandi Cess @ 1 % Loading Charges Transportation Cost to Point of Sale Average Retail Sale Price Spread for the retailer

Unit Rs /Acre Tons/ Acre Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Kg per MT Rs Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT

Value 30000 10.5 2857 9500 6643 185 60 325 80 12000 720 10 1380 1120 126 167 1958 50 600 63 2310 20925 1674 84 50 7032 1893 209 84 210 24463 3035

The above table can be summarized as below: Particular Cost of Production/ Buying Sale Price Cost of Marketing incl. Commission Agent charges Spread

Farmer 2857 9500 0 6643

PHC 9500 12000 1380 1120

Trader 12000 20925 7032 1893

Retailer 20925 24463 503 3035

•

The price buildup from Farmer to Consumer is almost two and half times.

•

There are 5 intermediaries in this case

•

While the intermediaries are making decent profits, the cost benefit ratio for orange farmer at 1:2.3 is also very good.

•

The APMC mandi cess accounts for close to Rs. 335 per mt, which is close to 1.5 % of the final price paid by the consumer

•

The share of consumers rupee by various actors in the value chain emerges as below:

Value Chain Actor Farmer PHC Trader Retailer Commission Agents Other Marketing Costs Incurred

% of Consumers Rupee 39 5 8 12 10 27

Institutional /Marketing Infrastructure In the entire study area there are five orange related facilities. Of the five facilities three facilities are for sorting-washing-waxing-grading lines, primarily set up for handling of fresh oranges for domestic and export markets. The summary of these three facilities in provided in table below:

Particulars District Ownership sorting-washingwaxing-grading lines Pre-cooling Cold storage Pack house Loading- unloading bay Backup power Weigh bridge

Warud Amaravati Owned by APMC, Warud

Morshi Amaravati Owned by APMC, Morshi

Karanja Wardha Owned by MSAMB

2 mt per hour 5 mt per batch 30 mt Present

5 mt per hour yes, capacity not known yes, capacity not known Present

2 mt per hour 10 mt per batch 32 mt Present

Present Not available Not available

Present Available Available

Worker Quarters

Not available

Present Not Available Not Available Available, but in dilapidated state

Usage

The facility was lying idle for many years. However, the facility was used by one trader, SKC and Co, of The facility was created by Warud at a nominal price in a private entrepreneur, but 2008-09 season. The could not use the facility experience of the trader is and in 2006 sold to APMC, that the manual grading is Warud at Rs. 22 lakhs. Last both cost effective, and year the facility was given more efficient. As the out lease to Reliace Retail mechanical grading line and a charge of Rs. 65 per separates fruits on the basis quintal was collected from of size only, while the Reliance. Approximately manual grading takes into 200 mt of produce was account other physical handled parameters of the fruit.

Available and good

This facility has been constructed recently in 2008-09 and has not commenced commercial operation yet. The facility has been created with the Financial Assistance of APEDA

The other two facilities for Orange processing and are owned by NOGA – Nagpur Orange Growers Association. Though, NOGA was originally a farmers association involved in processing of Oranges and other fruit crops, it was eventually taken over by the State Government through Maharashtra State Agriculture Infrastructure Development Corporation (MAIDC). At present NOGA has two multiproduct fruit processing facilities. One facility is at Katol and other is at Hingna Road, Nagpur. Of the two facilities, NOGA, Hingna Road facility is being managed by the State government through MAIDC and the Katol Facility has been given out on lease to one, Alliance Agro Private Limited.

The Katol facility has a multi product fruit processing line, cold storage, aseptic filling line and bottling line. Reportedly, there is a dispute between NOGA and Alliance Agro and the matter is pending in the court of law. At present the facility is lying idle and is not in use. The Hingna Road Facility of NOGA has a multi product fruit processing line, and bottling line, canning line only. In 2008-09, NOGA- Hingna Road has processed 2732 mt of various fruits and vegetables of which 331 mt is Orange.

MahaOrange: MahaOrange is a marketing co-operative society registered under the Maharashtra State Co-operative Societies Rules 1961. It is a federal body of Orange cultivators in the state of Maharashtra. It was formed in 10th Mar 2008, with head quarters at Nagpur. At present 11 block level co-operative societies are members of MahaOrange.

The objectives of Mahaorange are •

To promote production of export quality fruits

•

To provide direct access of market to Orange cultivators

•

To provide infrastructure for direct access of market

•

To educate, train and promote the concept of pre-cooling and post harvest management in Oranges

•

To make available domestic and international knowledge to cultivators on production practices

The society plans to provide crates and corrugated boxes at a concessional price to farmers.

Hub and spoke Locations for Orange:

Orange is the only major horticultural crop produced in the region. With the availability of oranges is spread across two seasons and for 5-6 months only, feasibility of setting up Orange specific facilities has to be ascertained in greater detail before finalizing the plans. Assuming that Orange specific facilities are to be constructed the following hub and spoke locations emerge based on field survey.

Hub/ Spoke Hub Location 1 Hub Location 2 Spoke 1 Spoke 2 Spoke 3 Spoke 4 Spoke 5 Spoke 6 Spoke 7 Spoke 8

Location Butibori Amaravati Karanja Katol Kalmeshwar Warud Morshi Ashti Chandurbazar Narkhed

District Nagpur Amaravati Wardha Nagpur Nagpur Amaravati Amaravati Wardha Amaravati Nagpur

Comparison between Hub Location 1 and Hub Location 2 Particulars District Distance from Dist HQ

Availability of land Other Facilities Distance from Highway Distance from railway station Distance from Air port

Suitability for Hub

Butibori Nagpur 15 km In the five star MIDC area in Butibori there is a Food Park Promoted by MAIDC under the 10th five year plan scheme. Reportedly, there are many vacant plots available in the food park. Details of vacant plots could not be obtained. Cold storage, Quality Control lab building, Dry warehouse Abetting Highway Nearest railway station at Dhamangoan at 13 km Nearest airport is at Nagpur and is 25 km from the site Low to Medium as the location is at one extreme of the production clusters. However, with development of Multimodal International Hub Airport at Nagpur (MIHAN), Nagpur is all set to become the centre of distribution logistics for the entire country

Dhamangoan Amaravati 35 km 110 acres of land available. There was a co-operative sugar factory on this land which was closed few years back. To repay the debt obligations, plant and machinery was sold off two years back. At present the land is in the possession of Maharashtra Co-operative Bank and the same can be purchased for setting up the Hub Asbestos roofed sheds, worker quarters, Admin building, Water and Power Abetting Highway Nearest railway station at Butibori is 3 km from the site Nearest Airport is at Yavatmal and is at 50 km from the site

Medium to High, as the location is in the centre of the production clusters

Availability of land/infrastructure at spoke Locations: Location Karanja

Land/ Infrastructure Facilities Orange pack house with pre-cooling, cold store spread in 3 acres available. • Orange processing facility with pre-cooling, cold store, multi fruit processing line, aseptic filling line spread in more than 15 acres available in Katol MIDC Area. • Vacant land in MIDC Katol is available Katol • One acre of Vacant land in APMC Katol - available • 2 acres of vacant land in APMC Kalmeshwar available Kalmeshwar • Vacant land in MIDC Kalmeshwar - available • Orange pack house with pre-cooling, cold store spread in 1 acre available • The above facility is in MIDC area and this is the only facility in the MIDC area. Vacant land available in MIDC Warud area • Orange pack house with pre-cooling, cold store spread in 5 acre available • The above facility is in MIDC area and this is the only facility in the MIDC area. Vacant land available in MIDC Morshi area These locations were identified as potential locations when the field study Ashti Chandurbazar was being done for the above identified locations. Data has to be collected Narkhed for these locations.

Warud

Value Chain – Cost Build up across the value Chain:

A value chain, indicating the various activities in the value chain, actors performing the given activity, cost buildup at every step has been mapped in this section. This value chain has been mapped for the supply chain having following characteristics:

1. The marketing chain is from Farmer to Commission Agent to Trader to Processor 2. For Processing conversion to Crude oil and DOC has been considered. Further, refining has not been considered. The price of DOC is dependent on protein content and moisture content, however, standard prices as told by traders has been considered 3. The packing material is new gunny bag of capable of taking 100kg of soya bean 4. Cost of capital and opportunity cost for the all the intermediaries has not been considered in cost build up and for calculating the spread 5. The Spread indicated is gross spread, excluding direct costs involved in handling of product 6. Wastages have been accounted at the level of packaging and storage only. 7. Cost of storage has not been considered

Actor Farmer Farmer Farmer Farmer Farmer Commission agent Commission agent Farmer Farmer Farmer Farmer Farmer Trader APMC Mandi Trader Trader Trader

Particulars Cost of production per acre Production per Acre Cost of Production per mt Transportation to mandi Unloading, Heaping, weighing charges Price discovered in the mandi Commission Charges @ 1.25 % Weight loss Value of weight loss Total marketing cost Gross realisation by the farmer Net realization by the farmer Bagging stitching and Loading Charges APMC Cess @ 1.05% New Bags @ 35 Rs per Bag Net price to the trader ex-farm gate Storage loss for processing season @ 4 %

Unit Rs per Acre Mt Rs per MT Rs per MT Rs per Mt Rs per MT Rs per MT Kg Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT

Value 4000 1 4000 150 35 10000 125 10 100 420 9590 5590 30 105 350 10485 419

Trader Trader Processor Processor Processor Processor Processor Processor

Sale price by trader to Processor Gross realization for trader Transportation cost to the oil Processing Unit Conversion Cost to crude Oil Value of Oil - 180 Kgs Value of De-Oiled Cake (DOC)- 850 kg Total Processing Cost Gross realization from processing

Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT Rs per MT

12000 1096 200 1500 6300 12750 1700 5350