Telangana Mana Kuragayalu Project – Operational Guidelines


Telangana Government issued operational guidelines for effective functioning of Manakuragayalu Project Annexued to this order as recommended by the Committee

OBJECTIVE:

  • To provide Direct Marketing facility to the farmers
  • Effective Vegetable supply chain to improve income of the farmers Quality vegetables at affordable prices to the consumers

BENEFICIARIES COVERED UNDER THIS PROJECT:

  • Farmers of Fruits and Vegetables.
  • End consumers.

COVERAGE AREA:

This Project is initially implemented in  Erstwhile Medak, Ranga Reddy and Mahabubnagar Districts by opening collection centers, where vegetables production is abundant.  Retail Outlets in twin cities has to be established, where demand is more. The Project will be expanded to entire State in near future.

NODAL AGENCY: Department of Agricultural Marketing, Government of Telangana.

PROCESS FLOW : 

Manakuragayalu Project has a 3 tier structure with Collection Centres at Field Level, Aggregation Centre as Distribution Centre and retail outlets as presented in the picture below:

 

Collection centres:

It should be identified by the channel partner subject to approval by the Project, its catchment area shall be more than 5 villages of vegetables belt and Procurement should be more than 1 MTs of capacity per day.

Distribution Centre:-

A place where all the procured produce will be aggregated and it acts as a HUB for receiving of Vegetables, Grading, Packing, Handling and Distribution to Retail Outlets. The selected Channel partner will utilize the facilities in Distribution Centre (Constructed by the Department duly utilizing RKVY funds)   but i.e., Electricity, cleaning and etc., charges will be borne by the Channel partner. Space in Distribution Centre will be allocated based on the Quantity Handled by the Channel partners. The facilities including infrastructure and equipment if any will be utilized by the selected Channel Partner.

Farmer Buying Price Policy( FBPP)

Farmer Buying Price (FBP) should be equal to Model price of Bowenpally market yard (or) any other wholesale markets, where the Vegetable arrivals are more than Bowenpally Market yard.

Market Purchases Policy (MPP)

Vegetables which are not available in the Collection Centers are to be procured from the wholesale markets to make the full basket for customer. The Market purchases will be done by the channel partner based on the indents and the price should not exceed maximum price of the Agricultural Market Committee, Bowenpally.

Invoice Price:- FBP + Grading Loss (10%) + Retail Dump (5%)

Retail Selling Price – Policy( RSPP)

  • The Retail Selling Price (RSP)= Invoice Price + up to 30% of mark up
  • The Retail Selling Price should not exceed 30% of the invoice price
  • If the Prices are increasing drastically, for more than 5 days i.e., (50% or above) of the previous day, Manakuragayalu Project Committee has to take a decision for stabilizing the prices.

Procedure for identification of Channel Partners:

  • Channel Partners will be selected through Tenders/ Expression of Interest/any other process decided by the State level Committee from time to time.

Roles and responsibilities of Channel Partners for Handling Management Activities.

The Channel Partner shall undertake in it’s demarcated area the following while rendering its part of Handling Management Activities under the MoU:Quality assurance for purchase of the Goods at the Collection Centres;

Day to day management of Collection Centres;

Quality Assurance for Purchases made at the Collection Centres and

till delivery at the final point of sale;

Logistics management from Collection Centres to the Distribution Centre(s);

Day to day management and operation of the Distribution Centre(s);

Logistics management from the Distribution Centre(s) to the final point of sale;

Support in sourcing of Goods which are not available or grown in the demarcated area only in prior approval with Department of Agricultural Marketing;

To provide Agriculture extension services to the farmers in the demarcated area including on crop planning, advice on good agriculture practices from a consumer point of view over a period as per the extant Policies of the Government;

The Channel Partner shall also support the Department of Horticulture and Department of Agricultural Marketing in training the farmers on improving the quality, post-harvest handling, good agricultural practices, non-pesticide management, etc. as may be undertaken by the respective departments from time to time;

The Channel Partner, within it’s demarcated area shall study the trends of the price, identify farming areas of vegetables and guide the farmers on crop sowing;

The Channel Partner shall submit monthly reports on trainings conducted, new farmers registered, steps taken on encouraging farmers to grow vegetables which are not available locally, as per the advice and targets given by the Marketing Department from time to time;

The Channel Partner shall extend necessary support to the related Departments such Department of Agriculture, Horticulture and Marketing Departments of the State of Telangana, for conducting capacity building programs;

The Channel Partner shall take all the necessary steps to expand the network of collection Centres and strengthen the collection Centres for procurement of more volumes of vegetables from the farmers;

The Channel Partner shall handle the Goods right from the

Collection Centre to the point of sale and shall be responsible for the consequences for quality and quantity variations, if any;

  1. The vegetables which are not available with the farmers at collection centers shall be procured by the Channel Partner from the local market as per the model prices communicated by the Agricultural Market Committee, Bowenpally to fulfill the indent of Channel Partner and other agencies or at such other price as approved by the Marketing Department.
  2. The Channel Partner shall communicate the buying price to the farmers every day for information based on e-POS system and also display the prices at each collection centre;
  3. The Channel Partner shall furnish report every fortnight on vegetables available with the farmers for harvest for the next fifteen (15) days, by surveying at the field level;
  4. The Channel Partner shall collect, develop and keep updating the database of farmers regularly at each collection centre mandatorily;
  5. The Channel Partner shall make necessary arrangements to ensure timely delivery of transportation of vegetables from the Collection Centres to Distribution Centres/retail outlets.
  6. The Channel Partner shall obtain all applicable licenses, approvals etc. and comply with all the applicable laws at all times for carrying out it’s activities covered under the MoU.
  7. The Channel Partner shall use e-POS system developed by the Marketing Department only for the purpose of ensuring transparency in all it’s operations and activities including maintenance of proper books of accounts.
  8. The Channel Partner shall deploy manpower who are suitably trained to handle various aspects of the supply chain management including providing proper customer care at the Points of sale/retail outlets.
  9. The Channel Partner shall comply with all the Instructions and guidelines issued by the Director Agricultural Marketing or the General Manager, Manakuragayalu Project in the interests of famers and end consumers.
  10. The Channel partner shall follow the Standard Operating Procedures (SOPs) laid down by the Marketing Department from time to time, for the various operations handled by the Channel Partner.
  11. The Channel partner shall extend all cooperation to the Marketing Department to fully realise the objects of the Manakuragayalu Project and ensure it’s success.

Demarcation of area of operation between the Channel partner for collection centers:

  1. The Marketing Department shall decide the area of operation of the channel partner for procurement of Vegetables for healthy competition among various Channel Partners from Collection centers in vegetable cultivated areas so as to provide level playing opportunity to all the Channel partners.
  2. Further, while deciding the Area of operation, the Marketing Department shall ensure that there shall not be any duplication of work or overlapping of area demarcated for each Collection.
  3. In case of any disputes relating to the Area of operation between the Channel Partner/Agencies, the matter shall be decided by the Director of Agricultural Marketing / General Manager, Manakuragayalu Project.
  4. The Channel Partner shall utilize the Distribution Centre for MKP operations and shall ensure that the Distribution Centres are operated and maintained safely and cleanly as per the good management practices in such a way that the facility serves the purpose of its establishment besides complying with all the applicable laws at all times.
  5. The Channel Partner shall submit daily, monthly and other periodical operational quantity and quality of service etc. reports to the Department of Agricultural Marketing, Government of Telangana with regard to the handling and management services in the format as may be prescribed by the Director of Agricultural Marketing from time to time.
  6. The Channel partner shall also be permitted to procure the vegetables from the local wholesale markets for certain low volume (or) off-season produce. However the percentage of the procurement of such vegetables shall not exceed 15% of the total requirement for the particular day, where demand is too low to justify the long haul freight but customer satisfaction is targeted.

After checking the availability in Telangana and justifying the nonavailability, hardy vegetable items such as Onions and Potato are permitted to be sourced at National Level i.e., from the Major growing areas across the Country. That the average sale of Onion and Potato is 30% of the total Fruits & Vegetables sales. Being high volume items, Onions, Potato and Tomato show lower bottoms and higher tops when subject to price instability.

Roles and responsibilities of Channel Partners for marketing activities:

The Channel Partner shall undertake the following in it’s demarcated area while rendering its part of Activities under the MoU:

The minimum outlet floor size shall be 400 sq.ft with ample parking area.

The Channel Partner shall sell all types of vegetables/fruits under the MKP project. Besides this the Channel Partner may also sell edible oils manufactured by the Telangana OILFED and also products of the Girijan Cooperative Corporation. IQF F&V products. However the Director of Agricultural Marketing may grant permission for the sale of any other value added Products related to the Agricultural produce and Organic Produces, from time to time.

The Channel Partner shall operate mobile stores on exclusive basis for better reach to the customers.

The Channel Partner shall not open/operate any retail stores directly under Manakuragayalu Project without obtaining prior approval from the Department of Agricultural Marketing.

The Channel partner shall not open/operate any other retail outlets either on it’s own name or under any other name, while operating under Manakuragayalu Project.

The Channel Partner shall manage the day-to-day operations of the Retail Outlets/Mobile Stores/Mini Stores in coordination with the Marketing Department and sale of Vegetables / Fruits at the prices as agreed by the Channel Partner.

The department shall also decide the area of operation of various channel partners for establishment of Retail outlets at strategic locations from time to time.

The Channel Partner shall be responsible for furnishing periodical MIS, progress reports, and other details to the Marketing Department within such timelines as may be laid down by the Director of Agricultural Marketing from time to time;

The Channel Partner shall settle its payments to the Marketing Department on a weekly basis on a mutually agreed day of the week strictly;

The Channel Partner shall not commit breach of any terms and conditions as laid down in the MoU and against the interest of the MKP in any manner which may adversely affect the reputation of the MKP project;

Price Protection for vegetables sourced under MKP – Marketing Department to provide price protection for vegetables supplied under MKP on case to case basis. Such Protection will be afforded to the Retail Stores/Mobile Stores/Bulk Supply and collection centres in the event of fall in the prices after purchase by the Channel Partner, by reimbursing differential price between actual sale price and invoice price;

The Channel Partner shall mandatorily display prices of all vegetables/fruits sold under the MKP project at a prominent place within the retail outlets/point of sale;

The Channel Partner shall not under any circumstances keep, store or sell any items belonging to it or it’s affiliates or associates except the items supplied under the MKP and specified under MoU for sale to the customers/public as the case may be;

The Channel Partner under all circumstances, shall sell the Goods at rate not more than the rates fixed under the MKP Project in respect of each item. In case it is found (or) detected by the Marketing Department at any time suitable action will be initiated against the channel Partner and all persons responsible for the same.

The MKP shall have the right from time to time to increase (or) decrease the margins in respect of any item or items supplied to the Channel Partner for further sale to the customer on case to case basis. Channel Partner shall submit necessary claims under price protection for eligible items to reimburse / compensate loss, etc. as a result of price reduction initiated by the Department of Agricultural Marketing ( MKP);

The Channel Partner shall get weighing scales stamped from the Legal Metrology Authorities as and when required by such authorities. The Channel Partner shall also comply with all statutory and or administrative requirement at its own cost and expenses in this regard;

The Channel Partner shall issue cash memo/bill through the use of prescribed accounting machines only, in respect of each and every item sold. The said bill/cash memo shall show items code, grade, quantity, sale price charged by the Channel Partner etc. However the format in which the bill is to be generated may be communicated to the Channel Partner by the Director of Marketing and the Channel Partner shall comply with it forthwith.

In case of any complaint /suggestion is received by the Channel partner, the same shall be communicated in writing to the MKP authorities on a daily basis.

The Channel Partner may sell Dairy Products, Bread and Eggs to the consumers and other institutionsand to the likes;

Roles and responsibilities of the Marketing Department under MKP 

                   The Marketing Department shall undertake the following responsibilities:

  1. Fixing the farmer buying price and Invoice price to the retail outlets of the vegetables sourced through the collection centres and market purchases for vegetables which are not available locally;
  2. Placement of indents to the Collection Centres based on the assessment of demand from the retail outlets and bulk customers through its channel parners.
  3. Making Payment to the farmers as per the supplies made to the Collection Centres;
  4. The Marketing Department shall provide infrastructure equipment crates, weighing scales, Pallets, Jack Lifters etc., to the Channel Partner by for use in the Collection Centers. All other infrastructure and equipment etc. required for carrying on it’s activities shall be procured and installed at the cost of the Channel Partner. On expiry of the term of the MOU or on it’s earlier termination for whatsoever reason, the Channel partner shall return all the equipment, crates weighing scales etc. provided by the Director of Agricultural Marketing to the Director of Agricultural Marketing in good working condition. In case of failure of the Channel Partner to return as above the Director of Agricultural Marketing shall have the right to recover the same from the Security Deposit to make good the loss or damage as quantified by the Director of Agricultural Marketing.
  5. The Marketing Department may from time to time conduct inspection and audit of the premises and records maintained by the Channel Partner and the Channel Partner shall extend full cooperation to the Officials of the Department.
  6. Monitoring the operations of the Channel Partner for effective functioning and success of the MKP Project;
  7. Laying down Standard Operating Procedures (SOPs) for various operations handled by the Channel Partner ;
  8. Analyzing the MIS and details on a periodical basis for making timely decisions on quantities, quality, timelines, etc.;
  9. Plan and achieve expansion of MKP in a phased manner as per the need and the market response.
  10. The Marketing department shall assist the channel partner in getting approvals/ consents etc from the Government side, wherever applicable for smooth operation of the MKP project.

INSTITUTIONAL MECHANISM FOR SUPERVISION AND MONITORING:

The Department of Agricultural Marketing, Government of Telangana shall be nodal agency for operationalizing the project. The state Government / the Department will be responsible for implementation, supervision and monitoring of the project by constituting State Level Coordination and Monitoring Committee under the Chairmanship of the APC & Principal Secretary (Agri. & Coop). The above committee will monitor the performance of designated project and review it periodically. The Project would keep close watch on the vegetable market prices, whenever the market price falls abnormally, the Department would start procurement through Manakuragayalu Project. For this purpose, department would need to establish information system for broad costing daily prices through web (or) enabled SMS services.

It is important to ensure that the project is strictly implemented as per the guidelines and benefit of the project is extended to the target group i.e., Farmers and end consumers. The main responsibility for the monitoring the project rest with the Agricultural Marketing Dept. Regular monitoring and learning at various level will help in improving the performance of the project.

 ESTABLISHMENT OF MANAKURAGAYALU PROJECT CELL WITH ADEQUATE STAFF:

Since, it is a massive operation need to deploy adequate staff matching with the scale of operation and there is need to establish a separate monitoring cell for Manakuragayalu Project by positioning of the General Manager (at the cadre of Joint Director of Marketing / Selection Grade Secretary, A.M.C., Bowenpally) and related essential officers and staff as per Organogram developed and the posts are most likely depending upon the requirement shall be Outsourced (or) on deputation from the Department as detailed in the Organogram.

MANAKURAGAYALU CELL

 

CONSTITUTION OF STATE LEVEL CO-ORDINATION AND MONITORING COMMITTEE:

 

There shall be the State Level Committee invariably be headed by the APC and Principal Secretary /Secretary to Govt., to the Government, (A & C) with the following members:

 

 

 

  • Principal Secretary ( A & C)                               –           Chairman
  • Director of Marketing                                     –           Member (Convener)
  • Secretary/JS, Finance                                 –           Member
  • Director of Horticulture                                     –           Member
  • General Manager, Manakuragayalu             –           Member

 

THE RESPONSIBILITIES OF STATE LEVEL COMMITTEE SHALL BE:

  • To Review & Monitor the implementation of the Project.
  • To undertake any other activity for price security & price stabilization considering necessary for the successful implementation of the project.
  • To release necessary funds for the project.
  • To ensure proper co-ordination among all the concerned Department for effective implementation and issue necessary instruction for the purpose.
  • To ensure convergence of various schemes to optimize the welfare and development of vegetable growing farmers.

DEVELOPMENT OF MARKET INFORMATION SYSTEM:

 

In order to ensure fair returns to the farmers on a long term basis, Manakuragayalu Project Market information system will be developed. An advance information and communication technology based system shall be established for speedy collection and dissemination of market information. To start with information through IT facility for quoting daily prices of the commodities / vegetables along with quantity traded at Wholesale Market, Bowenpally.

 

E-POS SYSTEM:

The Channel Partner shall operate for the purpose of Transparency in maintenance of project operations and financial account books through e-POS system developed by the Marketing Department only. 

 The Manakuragayalu Project shall prepare a comprehensive Annual Action Plan for the collection of vegetables from farmers and establishment of retail outlets to reach out the consumers – during the next financial year (showing quarter wise procurement) through its Channel Partner.

The plan should clearly specify the following details:

  • Collection centre wise procurement plan – season wise.
  • Total production potential in the Targeted Areas.
  • Total Quantity estimated to be procured and marketed in the season and value thereof to be calculated as per the last years procurement / invoice rates.
  • List of collection centers to be operated along with expected arrivals (Quantity) at each center.
  • Retail Outlets to be established along with time line.

PERFORMANCE ASSESSMENT / EVALUATION:

Marketing Department will regularly monitor the performance of channel partner as per the MOU. The performance evaluation will be done with Regular Intervals to track the changes with its functions and processes. This will ensure proper monitoring and growth of the Manakuragayalu Project.

 

INFRASTRUCTURE DEVELOPMENT 

 

  • Manakuragayalu Project will ensure arrangement of adequate infrastructure facilities at collection centers, distribution centers and retail outlets by effectively utilizing the existing one’s like weighing scales, crates, pallets, grading and sorting tables, barcodes scanner, packing machinery etc., if need arises Manakuragayalu Project submit proposals to the Director of Agricultural Marketing / Commissioner & Director of Agricultural Marketing  for procuring the above giving full justification of their optimum utilization for implementation of the project.

 

  • Manakuragayalu Project may also submit proposals to the Director of Agricultural Marketing / Commissioner & Director of Agricultural Marketing for modernization of Collection Centers and Distribution Centers with state of art facilities and to establish the cold storage from time to time financially would be through Department of Agricultural Marketing, RKVY and any other schemes from Government of India.

 

  • Manakuragayalu Project may also submit proposals to the Director of Agricultural Marketing / Commissioner & Director of Agricultural Marketing for  establishment of Retail outlets at Government locations.

 

QUALITY PARAMETERS:

 

Channel Partner shall ensure that the vegetables procured under this project shall confirm on quality norms for different vegetables and fruits.

 

The staff / persons deputed at the collection centres by the Channel Partner shall be made aware of the quality parameters.

Necessary directions shall be issued by Manakuragayalu Project to the Channel Partner about the assessment of the quality.

Necessary Inspection shall be made randomly by staff of the Manakuragayalu Project.

 

VERFICATION OF WEIGHTS, MEASURES AND QUALITY:

  • Channel Partners must ensure that vegetables brought by Individual farmers is properly weighed at the collection centre and upfront payment as per the price.
  • All the crates/boxes should be filled having uniform weight as per Trade practice.
  • In case of gourds and cauliflowers it shall be measured in count / piece wise.
  • In case of snake gourd it shall be measured in bunches.

 

REPORTING / INTIMATION TO THE DEPARTMENT:

  • Opening and closure of daily operations shall be intimated to Manakuragayalu Project, Department of Agricultural Marketing by Channel Partners.

Weekly report on procurement & Sales by channel partners.

A weekly report on status of operations shall be sent by the channel partner to the General Manager, Manakuragayalu Project, The General Manager MKP shall submit the same to Director of Agricultural Marketing / Commissioner and Director of Agriculturl Marketing for information.

Monthly Operations cum Stock statement each channel partner should send operations (Procurement and Distribution) cum stock statement of the month / before the 1st of the following month to Manakuragayalu Project office who shall forward the same to Director of Agricultural Marketing.

 

PAYMENT TERMS:

The Channel Partner has to perform both operations End to End i.e., Handling and Management and Marketing;

The charges towards Handling and Management are fixed Rs. 3.00 per kg + Service Tax (extra, if applicable) of vegetables and Fruits and includes cost of maintenance of the collection centres, Transportation from Centres to Distribution Centres, Aggregation and distribution from Distribution Centres to retail locations – transit losses if any and also cost towards packing material.

The Markup charges shall not exceed Thirty percent (30%) on the invoice price supplied vegetables and fruits by Manakuragayalu Project.

The channel partner at the time of execution of the MOU shall make security deposit of Rs. 30.00 Lakhs by way of Account Payee cheque in favour of Manakuragayalu Project towards farmer procurement payment (or) revised as per the decision taken by the State Level Committee from time to time.

AUDIT AND CERTIFICATION OF UTILIZATIONS OF FUNDS:

To maintain the accountability and transparency of the project and performance, a third party auditing will be encouraged.

Channel Partners shall maintain separate accounts/ records for Manakuragayalu Project operation which shall be open to auditing and verification.

Manakuragayalu Project shall submit an audited accounts statement duly certified by Audit Authorities / Charted Accountant. The Audited statement of Accounts and Certified utilization certificates shall be submitted to Director of Agricultural Marketing by the Manakuragayalu Project office.

DISPUTES RESOLUTION MECHANISM:

For dispute settlement Department shall institute appropriate Mechanism. Being a Nodal Agency shall have Redressal at Head office.

The Parties shall endeavour to resolve amicably any dispute arising with regard to the terms of the MoU through mutual discussions and consultations. In case the dispute remains unresolved within a period of 14 days from the date of receipt of notice of the dispute, then matter shall be referred to the Director of Marketing.

All the disputes will be initially resolved by the General Manager, Manakuragayalu Project. If any Party is aggrieved by the decision or order passed by the General Manager they may prefer appeal before the First Level Appellate Authority i.e.,

Director of Agricultural Marketing, Govt. of Telangana, Hyderabad; and

If any party is aggrieved by the decision or order passed by the Director of Agricultural Marketing, Govt. of Telangana, Hyderabad he may prefer appeal before the Second / Final Appellate Authority i.e., The Principal Secretary, Agricultural and Co-operation Department Government of Telangana.

Time limits for filing appeals: –

  Appellate Authority Time Limit
1 Before The First Appellate authority: The Director of Agricultural Marketing

(DAM)

Within 30 Days from the date of communication of the Order passed by the General Manager, Manakuragayalu Project.
2 Before The Second Appellate authority:

Government of  Telangana

Within 30 Days from the date of communication of the Order passed by the Director of Agricutlural Marketing, Government of Telangana, Hyderabad

FINANCIAL ASPECTS:

Following sources of funding will be provided to promote Manakuragayalu Project in Telangana State.

Existing Funds from RKVY for the infrastructure.

HMA Charges and Packing material charges of Rs. 4/- per Kg. will be reimburse for the 1st year by Department of Agricultural Marketing and there after                  reimburse will be phased out at Rs. 1/- per Year and included in the pricing from 3rd year onwards.

(Department of Agriculture Marketing will reimburse HMA charges and packing cost material at Rs. 3/- per Kg. for the  2nd year, 3rd Year  @ Rs. 2 per Kg and 4th Year @ 1 per Kg)

A Special Fund would be created by the Government of Telangana State.

To create the Fund for Manakuragayalu Project and to save farmers from the distress sale of their produce with an amount of Rs. 20.00 crores as one time grant by the State Government and 2% of regular contribution from all AMCs of its income derived.

The Maintenance and operation of the Fund shall be by the Agricultural Marketing Department, Government of Telangana, Hyderabad.

The Fund shall be utilized only for the purpose and not for any other purpose.

Every Year the Central Government shall be requested to contribute funds to the revolving fund under the Market Intervention Scheme.


About Pavan

Advocate, Journalist and Founder of Telangana Navanirmana Sena From Mahabubnagar,Telangana State, India Email Me -- pavan@tgnns.com

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