The Institutional Structure in Pune Fruit &Vegetable processing cluster

A Cluster Coordination Committee (CCC) in Pune Fruits & Vegetables processing cluster has been formed incorporating leading stakeholders from the MSMEs, BDS, and leading Public & Private institutions for directional support. This follows a Nucleas approach where such a group defines their problems and service demands, considered as a prototype in the cluster. This apex level support from the CCC is interspersed with BDS workgroup meetings concerning various BDS areas which entails brick-by-brick construction of BDS-MSME market leads after taking into account their feedback on various market reachout issues.

The cluster portal http://www.punebds.com/ will function as a strategic virtual facilitator in this endeavour. Its role is central in the BDS market development within the cluster. It would work as a BDS-MSME exchange platform for leads generation. Business Enquiries and offers have been placed at http://www.punebds.com/BusinessOpportunities.asp in the portal for soliciting various BDS needs of the processing MSME firms and vica verca. Another novel tool that has been activated within the last 10 days on the cluster portal is the concept of E-Groups. Under this link "http://www.punebds.com/postmail.aspx" appearing as "E-Groups", various BDS (Consultants, Service providers) groups will have the opportunity to interact with other players in their domain om issues like market entry, procedures, policy modulation, potential, pricing, reachout etc.. This will have the impact of activating the orientation of the various BDS groups towards the cluster market. At the next stage MSMEs will also be introduced to the E-Group discussions, making it a virtual market interaction space.

In order to induce BDS to effectively function in the fruit & vegetable processing cluster market with a viable market situation, two meso (local) level organisations, viz., NAFARI (National Agriculture & Food Analysis and Research Institute) and GOMUKH Trust have been brought into the project fold via MOAs (Memorandum of Agreement(s)). While NAFARI is a non-profit making laboratory and will function as a facilitating organisation for SMEs in mainly quality and training domains, GOMUKH will act as a facilitator in the backward supply chain. The onus of the BDS linkages within the cluster (with processing firms) will be gradually shifted to these two Meso organisations as the project progresses. The modus operandi of this facilitation will be based on the Lead BDS approach, whereby the lead BDS (Consultanst, Service providers) will be cultivated in each BDS domain to be market makers by virtue of being Knowledge and domain leaders in their respective areas.

The BDS implementation Pune Fruit & Vegetable Processing Cluster - SIDBI Project

Major factors inhibiting the growth of this cluster market are cost and quality competitiveness. Because of this the largely small & micro firms supply in the local or regional markets. The impending FSSA (Food Safety & Standards Act 2006) to be implemented by this year would require a much higher level of quality and packaging, labelling related preparedness in the cluster imminently.

There are critical gaps to be addressed for cost competitiveness in the cold chain - absence of multi-product storage facility/technology, latest cost saving technology ethos, lack of refrigerated transportation, and woefully missing infrastructure in packhouse & pre-cooling activities. There is also multiplicity of tiers in backward supply chain suppliers/consolidators and their poor storage, loading/unloading practice leading to wastages and cost escalation. Raw material costs in the cluster is about 35-40% of the total value added as against 20% in most internationally competitive clusters. Packaging costs about 35% of the total value addition.

The BDS (Business Development Services) strategy for the cluster address the critical success factors in the value chain - vital to the market viability of the cluster units. The implementation involves service demand assesment of the MSMEs and awareness creation on existing services, understanding constraints and distortions in the supply of services and bridging information gaps between local, regional, and national stakeholders. The latter will address service provision and on entrepreneurial, institutional, and legal constraints in building business development opportunities. Often in weaker markets, demand orientation has to be combined with some supply oriented pilot activities for demonstration effects. So, our BDS implementation strategy involves pilots in various critical market areas.

While the value chain approach would enable us to identify concrete demand for services, it also builds the foundation for Local Economic Development (LED) and EE (Enabling Environment) objectivity in the project process, through economic rationality. It also enables the use of embedded services towards business and institutional linkages between suppliers, buyers, BMOs, and providers.