Promoting Organized Retail in Horticulture and Beneficial Impact on Farmers—The Case of Deepak Fertilizers and Petrochemicals Limited

Abstract

Diversification of agriculture has brought about increased production of several agricultural commodities, which in turn have brought about new challenges to handle in terms of huge marketable surplus. India, now ranks second in the production of fruits and vegetables and policy makers have focused attention on building up an efficient marketing system which will ensure time, place and form utility. Market reforms have therefore been initiated to facilitate integration of farm production and attract massive investments for building up post-harvest infrastructure. Accordingly, corporate units have entered agricultural markets to capitalize on opportunities such as “farm to fork” approach.

The impact of the corporate entry of Deepak Fertilizers Petrochemicals Limited (DFPCL) in agricultural marketing for the fruit crop, viz., pomegranate, was studied and compared with the traditional system of marketing in regulated markets. The study observed that DFPCL provided extensions services to member farmers, who greatly benefited and realized better yields and prices. However, the marketing operations of the company were restricted to only superior quality produce. In case of regulated markets, the intermediaries are more and since low quality produce is also accepted, the price is accordingly lower whereas margins are higher. Organized retail must therefore increase the scalability of its operations in providing backward and forward linkage to farmers. This will benefit the producer as well as consumer and also more competition in marketing of agricultural produce will be created.