In defence of middlemen – reverse thinking by a disintermediation expert
Lets be fair to the middlemen and the agents. Had it not been these much maligned folks, every nook and corner of India would have been deprived of their daily dose of Pan (Beetle leaves). Considering very high perishability and low value of this product, thanks to middlemen, this product safely reaches all corners of India and thousands of people in India get their employment and pleasure (daily quota of pan) still keeping the prices low for anyone to afford – that too without refrigerated transport. Can Reliance Fresh duplicate this effort? You bet..
This is not in defense of middlemen or an ode to them. This is reality and I know this better after spending 20 plus years in organized fresh produce retail in India with companies like Mother Dairy, Reliance Retail and Subhiksha with a brief to eliminate or at least reduce middlemen from food supply chain.
It is not incidental that all above said big fruit and vegetable retailers still by between 30-40% of fruit and vegetable supplies from these middlemen in wholesale market. Go and check their yesterday’s purchase records. History of Safal Market at Bangalore would have been different had it built itself on the strengths of existing middlemen.
A little known secret – Most of the times in a year, auction price of Potato from Agra (UP) at Azadpur Wholesale market is cheaper than the price at Agra itself even if the potato is arriving in this market from same belt. Same is true for Onions from Nasik. Well, it is wide inter-middlemen competition that drives down the price where as potato growers exploit the limited and thinnly spread traders at production source.
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30. July 2009 at 08:04
In just 3 years of their existence, if Reliance is buying only 40 percent of their supply from middlemen – don’t you think its an achievement. Imagine how much they could improve, in say next 3 to 5 years.
With your immense experience in agriculture and food, do you think India could have developed a nutritious and tasty processed food item , which is also very cheap, for its masses. Has there been an attempt for the same, in our history.
I read your blog regularly and appreciate your experience and your capacity to “think hard”.
Anil Dogra
6. August 2010 at 01:31
I actually decided to produce a simple movie about this, I would be appreciative if you would maybe take a moment to look at it and possibly leave a comment about what you think, I left the video link in the “website” field, hopefully you can access it, thank you greatly