Large retail players and marketing cooperatives could effectively reduce losses by way of eliminating or shortening the procurement chain as well as by way of investing in harvesting, post-harvesting, handling and transporting techniques.

The role of the cooperatives in marketing of agricultural produce is manifold. They help farmers to pool their produce and secure a better price in the market. By their presence in the agricultural makerts, they provide marketing cover and protection to farmers.

Marketing cooperatives are bound to assume greater importance in the context of increase in agricultural production and productivity. However, cooperatives are not insulated from competition and market forces. With the proposedthrust an export of farm products, the cooperatives may have to gear up their activities to tap the full potential.

The PHDCCI has said that under the new economic system, role of the public sector will gradually diminish, resulting in dominance of private sector in the Indian economy. In this situation, cooperatives could be the balancing factor between the public and private sectors.

Besides being facilitators for marketing, agricultural cooperatives play a significant role as institutional vehicles for providing support to farmers by way of credit, inputs, storage and post-harvest facilities. Starting with the limited spectrum of distribution of the economy such as processing, fertiliser production, storage, dairy and spinning.

The policy of the government to progressively institutionalise agricultural credit and distribution of inputs to farmers through cooperatives have helped in increasing the agricultural production and implementation of the poverty alleviation programmes.

The PHDCCI said thatlarge retailers could be key drivers of change in the country. In order to control costs and raise quality, large retailers could procure directly from the farms. This will result in increasing the efficiency by reducing the number of intermediaries between the farms and the retail outlets.

Like in the developed countries, Indian retailers could also reduce the wastage in the system by communicating best practices in harvesting, storage and transportation to the farmers as well as to those involved in transportation and handling along the procurement chain.

Large retailers in the country have high overheads compared to the existing fresh produce vendors. In order to successfully compete with the existing sellers, retailers will have to ensure that they offer better quality produce at competitive prices.

Given their higher overheads, this will be possible only when the retailers reduce their cost of procurement by reducing the high level of wastage and by minimising intermediary margins.

To do this,they will need to establish close links with the producers and invest in developing infrastructure along the procurement chain between the farm and retail outlets.

Since it is impractical for retailers to deal with individual small farms, large retailers will need to create farmer cooperatives. They will also need to invest in extension work, helping farmers to understand the benefits of better harvesting, post-harvesting and storage techniques, PHDCCI said.

The cooperative retailers of fruits and vegetables could greatly modify the procurement chain in India by completely eliminating the intermediaries. As a result, they could raise farmers' incomes by as much as 60 per cent and reduce wastage to as low as five to six per cent. The cooperatives could provide the basic facilities for sorting and grading, pre-cooping and plastic crates used in transportation to the farmers, PHDCCI added.

They could also train the farmers in the correct handling, storage and grading techniques. Such a system could resultin maintenance of quality and reduction of wastage as well as reduction of the harvesting grading, picking and despatch time from over one day to just 12 hours.