An analytical study on value chain finance to tomato and mango as a component of high value agriculture in the Eastern Uttar Pradesh of India

The study conducted an extensive field survey utilizing pre-tested interview schedules with tomato and mango growers and chain actors. A multi-stage purposive-cum-stratified random sampling method was employed to select sample units. The findings of this study highlight the cost orientation of tomato and mango production, indicating a greater need for consequential credit. The research revealed that growers of both commodities within fragmented value chains had a higher proportionate share in the value addition (price) than growers in integrated chains, primarily due to direct sales of produce to consumers. Additionally, downstream actors such as commission agents, wholesalers, and retailers received a comparatively higher proportionate share in the value additions (price) compared to upward actors, indicating that producers could not effectively compete with increased demand in the marketplace. Observations within the chain indicated that finance for tomato and mango production circulated through a product commitment relationship established between chain participants. Downstream actors provided financing to upstream actors from either their surplus funds or external finance received from financial institutions. The study suggests developing a producer-driven chain financing model as an alternative to the buyer-driven financing model for tomato and mango production. This could be achieved by promoting farmers' organizations as long-term financing strategies for financing institutions.