Changes in the Agricultural Produce Distribution System Brought by Organized Retailing

Submitted to: Ms. Tahmina Khanam Course Instructor: Supply Chain Management Department of Management Studies Faculty of Business

Submitted by:

Md. Mosabber Hossain Marzia Haider Nabiba Ahmed Nadera Afrin Farzana Yasmine Nipa

ID No: 03-09-17-015 ID No: 03-09-17-042 ID No: 03-09-17-056 ID No: 03-10-18-065 ID N0: 03-10-19-033

Date of Submission: 26th October 2011

Retailing, in general sense, means the sale of commodities from a fixed location, in small units for direct consumption by the purchaser. Usually it is noticed that a retailer buys products in large quantities from producer, either directly or indirectly through a broker, and then sells smaller quantities to the consumers. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Most of the retailers apply a pricing technique that includes an additional amount to the retailers cost, which is either decided by the retailer himself or recommended by the manufacturer. Retailing can be classified into a number of categories, a few of which are stated below: Department stores, which are very large stores offering variety of categories and has broad assortment at average price. Discount stores, which tend to offer a wide array of products and services, at affordable acnd cut-rate prices. Supermarkets, which sell mostly food items; Warehouse stores, which offer superior quality goods at low-cost, Specialty stores, which gives attention to a particular category and provides high level of service to the customers. General stores, which is a rural store that supplies the main needs for the local community; Convenience stores, which is essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases. Supermarkets, which is a self service store consisting mainly of grocery and limited products on non food items. Malls, which has a range of retail shops at a single outlet. They endow with products, food and entertainment under a roof. The above mentioned ones are categories of retailing, which plays prominent role in the supply chain management of any sort of product. However, it is more important in case of agricultural

products, because as these goods are easily perishable, much attention is needed as the products pass through the entire supply chain, starting from harvesting to consumption. Although the supply chain for agricultural products in India face some traditional obstacles like lack of storage facilities, improper transportation etc; but organized retailing has originated significant changes in the agricultural produce distribution system, which are discussed hereby :

The number of intermediaries diminishes as a result of the introduction of organized retailing in the distribution system. The existence of these mediators created a hindrance in the establishment of an ideal association between the farmers and the consumers.

Carrying costs for the produces decline because of reasons like the presence of a regulated transportation system and the need for lesser packaging. Reduction of wastages are also noticed at various stages of the distribution system, for example: transportation, storage, handling activities etc. Increase in supply, which takes place because of the organized retailing, leads to decrease in the price that needs to be paid by consumer. Maintaining a reliable and steady information channel facilitates the task of farmers to meet up the exact demand of consumers, instead of being misguided by the consolidators and wholesalers.

Involvement of specialized organizations assures the stable flow of superior products from the farmers, which in turn results in their affluence. Farmers are being offered with agro-based education, which focuses on two major issues; increasing productivity and accomplishing consumer needs.

The responses that the distribution channels make towards the changes that have been taking place in the respective system are mentioned below :

The income of farmers increase as well as reduction occurs in the price that is to be paid by the end consumers, due to constructive changes in the distribution channels.

Creation of opportunities for employment is an impact to be mentioned, which occurs as a consequence of the changes in the distribution channels. The optimistic changes in the distribution channel also assemble the way of proper utilization of the natural resources available. Lastly, improvement in the standard of living of farmers is attained as a response to these changes, which simultaneously convey benefits to the consumers as well, as they get to pay a comparatively low price.

Thus it might be concluded that, the introduction of a planned and structured retailing system indeed brings some constructive changes in the agricultural produce distribution system of a country.