How do we start a business of selling fruits and vegetables from the farm

Dear Forum members,
                                I have been working with small farmers who grow all kinds of fruits and vegetables in Gujarat. However, we have not been able to market the products either in the domestic market or in the export market. We end up selling at the APMC yard.

Can someone give a proper step by step guide to set up a marketing arm for these small farmers. Thanks

Sam

I will add my 2 cents here.

The marketing is initiatlly capital intensive job. Once you want to sell to other market than APMC yard you need capital and manpower.  All small vegetable shop owners come to APMC yard and buy vegetables daily for their shops requirement. They want two things

  1. Assured supply of vegetable 365 days a year.
  2. Price is such that they can also earn their livelihood.

You may compete in point # 2 with APMC yard price but it is difficult to compete on point # 1. Are you able give them assurance that you can provide all their requirements 365 days of year? If yes, then you may have to set marketing and distribution channel to these small shopkeepers. Not sure how much financially that is viable.

You can do one thing: Contact some 10 - 15 vendors and take them into confidence and negotiate the price. Your price should be less than APMC yard price. Supply the vegetables fruit yourself daily in morning (on time). Add 5 to 10 vendors each month to your portfolio. Select newer area every month.

Once this is established take some go-down for fruit and vegetables. As your vendors to collect from there or supply them at cost. This way you can setup you marketing and distribution channel. The task is not easy but not impossible also.

Thank you for your valuable inputs.

If  the supply can be made pretty much constant, try approaching a few apartments and sell the produce directly.

This will give you the maximum margin but is quite labour intensive but worth the trouble, we have tried it out in small numbers ( 25) has worked wonders.

Just to add one more point to the discussion. Selling farm produce other than APMC market is against the law. I stay in Mumbai and at the entry of Mumbai there is a booth by APMC which can stop vehicles carrying farm produce in the city.

Are you sure? It doesn’t sound right.

I always thought APMC is just an option.

I was given this info on my visit to Dahanu last week. This Mumbai based farmer, settled in Dahanu since past 10 years use to grow vegetables and fruits and also use to source from villagers around. He had taken a stall at a Farmers market in Mumbai and hence use to carry all the produce and drive to Mumbai. He at times used some trick to evade the eye of the APMC staff or else if caught had to bribe them. I guess one cannot sell produce outside APMC, but my info could be wrong. Please correct me if I am wrong.

Prash is right.

APMC operates three ways;

A)All farm produce should be first brought to APMC mandi where its auctioned and payment is made to the producer.

Or

B)APMC aids the farmers to put up stalls in mandi, where any buyer can buy directly but only under APMC supervision.

or

C)APMC license holders can trade on their own in mandi’s

But again, I dont beleive APMC rules are followed verbatim.

Also, to add;

Finance Minister Arun Jaitley said that state governments would be advised to delist fruits and vegetables from the Agricultural Produce Market Committee (APMC) Act to check rising food prices (Courtesy:http://profit.ndtv.com/news/economy/article-why-abolition-of-apmc-is-a-good-idea-532601)

Regards,

I hope government does that for all farm produce. Not that produce is not sold without APMC routes but than farmers wont have the fear of being caught. Even money paid for bribing the officers will be saved.

I am not sure what wholesale really means in the link and the real differentiation from retail. I also wonder what the bulk purchases by the large supermarket chains amount to and if it is somehow outside of the purview. Let me talk to a few people to get a better understanding.

SOME ORGANIC FARMERS HAVE JOINED AND ARE SELLING THEIR PRODUCE THROUGH A STALL AT KEMPALINGANAHALLI, NELAMANGALA, BANGALORE.

REGULARLY BUYERS COME TO THIS PLACE IN TRUCKS FOR PURCHASE.

I understand that this is relatively old post but I want to discuss it again because it relevant in today’s time as well.

Selling farm fresh fruits and vegetables can be a seasonal business or a full-time operation if you live in a milder region that produces year-round. Not only you make money from selling what you grow or acquire from local farmers, but you also provide customers with the fruits and veggies they need to put healthy meals on their table.

PLANTING YOURSELF ON THE ROAD TO SUCCESS REQUIRES A SMART SITE AND SMART MARKETING.

Many people are drawn to starting a small fruits and vegitable farm out of a desire to promote healthy eating and lead a simpler life. However, farming is hard work and requires the same skills and commitment to succeed as any small business. Here are some tips to plant you on the road to making a living as the owner of a farm market.

  1. LICENSES AND PERMITS
    If you plan to sell 2,000 or more pounds of fresh or frozen fruits and vegetables, you must obtain a Perishable Agricultural Commodities Act license, commonly known as a PACA, from the U.S. Department of Agriculture. You’re exempt from needing the license if you only sell what you grow.
    If you plan to sell produce from your own stand, inquire about any permits required by your state, county or local government. For instance, the King County, Washington Health Department does not require a permit for selling minimally processed produce. However, you do need a permit from the Washington State Department of Agriculture if you sell produce from a location other than where it’s grown.

  2. OBTAINING PRODUCE
    A couple of options exist for getting the fruit and veggies you need. You can grow it yourself on land or in a greenhouse. Another option requires contracting with local farmers, gardeners, orchards and co-ops to buy their produce at wholesale prices and resell at retail prices.

  3. WHAT YOU NEED
    Selling fruits and vegetables requires investing in the necessary tools to transport and maintain the produce. A vehicle, such as a van or truck, and a hand truck for moving produce and making deliveries are necessities. Containers for keeping the produce from being damaged during harvesting, in storage and in transit also are required. Tables, an umbrella or some form of shade are required if you sell at outdoor markets.
    If you plan set up a shop to sell your produce, look for adequate space with plentiful parking. Shelving for display and refrigeration units to keep produce cold keep food fresh and make them appealing to the customers. You also need scales, bagging products and a payment processing system with a cash till.

  4. WHERE TO SELL
    Set up a table at farmer’s markets, fairs and at flea markets if you have enough produce to sell at a market that last a few hours, suggests Farm Fresh Rhode Island. Convince consumers to sign up for a subscription service to receive a box of fresh produce every week or bi-weekly based on what’s in season. If you have a large farm, consider a U-pick operation, ideal for harvesting large quantities of produce, such as that used for canning and preserving, says the Penn State University College of Agricultural Sciences.
    Another market consists of restaurants, bakeries, caterers, schools and nursing homes that need to prepare fresh food for their clients. You also can sell to produce stands and grocery stores.

  5. STUDY THE MARKET
    Figuring out what types of fruits and veggies to offer requires analyzing the market. Start by figuring out who will buy in the geographical area in which you plan to sell, say Penn State University. Then find out what unfulfilled markets exist before you figure out what to grow or buy from local sources. Also analyze the market, decide on price and profit margin. To know the latest trends visit mandi bhav. It would be convenient to check online rather then wasting time and money on non-productive work.

  6. PROMOTE
    If you choose a direct selling approach, such as a fruit stand or farmer’s market booth, use signs to attract and convince people to try your fresh produce. Ask customers to sign up to receive emails about where and what seasonal produce you’ll be selling next, helping you to build a following. Educate customers by using labels and small cards to add descriptions of each fruit and vegetable you sell. Add information about where each item comes from and give an idea or two for how it can be used.