Supermarket chain wants to buy Rs. 1m worth of fruits, vegetables from Mahaweli areas monthly

By Paneetha Ameresekere

The Mahaweli Authority of Sri Lanka (MASL) is facilitating a forward contract agreement between identified Mahaweli farmer organisations and a leading local supermarket chain for the supply of fruits and vegetables from the Mahaweli areas, informed sources said.

This chain of supermarkets, operating 21 outlets islandwide, wants to enter into a forward contract agreement with Mahaweli farmer organisations for the supply of nearly Rs. one million worth of fruits and vegetables on a monthly basis, to be purchased at current market rates.

They said that the MASL has identified three farmer organisations at Uda Walawe, Maduru Oya (System B) and in the Anuradhapura area (System H) respectively, as possible contenders to meet the requirements of this private sector organisation. The Mahaweli has a total of 760 farmer organisations.

"We want to initially facilitate a forward contract agreement with this supermarket chain for the forthcoming Yala season, and depending on its success, continue or extend this arrangement with the buyer beyond Yala," they said.

The agreement is expected to be signed next month. The sources further said that the prospective buyer is equipped with reefer trucks to ensure that the fruits and vegetables won’t perish while being transported.

"The farmer is saved of the responsibility of transporting the produce to the buyer’s go downs if this agreement comes through," they added. Further, the buyer has plans to open-up buying centre at Embilipitiya which is close to the production site at Uda Walawe," they said.

"We want the buyers to go into the production site," the sources said. The contract, if it materialises, would be entered into between the supermarket chain and the farmer organisations, while the role of the MASL would be that of a facilitator.

The sources also said that they wanted the Mahaweli farmers, which constitute 70% of the population in those areas, to look into the possibility of cultivating financially remunerative agriculture crops other than rice, which is increasingly becoming uneconomical and unviable due to rice imports from countries such as Burma being cheaper than the locally produced rice.

The quantities that they wish to purchase on a monthly basis are 500 kilos each of honey dew (a type of a water melon where the edible portion of the fruit is red in colour), baby corn and green chillies.

1,000 kilos each of water melon, cantaloupe (another type of a water melon), gherkins and okra (a smaller variety of ladies fingers), 1,500 kg of tomatoes, 2,000 kg each of ambul plantains and sweet corn, 10,000 kg of onions and 10,000 numbers each of anamalu and kolikuttu plantains.

Asked whether the Mahaweli has the capacity to meet the buyer’s requirements, the sources said that except for anamalu plantations which are essentially a wet zone produce, the Mahaweli farmers have the capacity to meet all the other requirements.

The chain has also shown interest, though not specifying the quantities required, in buying other fruits such as mangoes, divul, beli, avocado, guava, rambuttan, mangosteen and strawberries from the Mahaweli areas.

The sources also said that the price of a kg each of water melon was in the range of Rs. 10, cantaloupe, between Rs. 100 and Rs. 150, honey dew, Rs. 100, the farm gate price for a kg of ambul plantains at Rs. 15, kolikuttu, Rs. 5 a fruit and a kilo each of gherkins at between Rs. 10 and Rs. 15, baby corn, between Rs. 25 to Rs. 30, sweet corn, Rs. 25, onions, Rs. 38 (CWE prices), green chillies, Rs. 60, tomatoes, Rs. 30 and okra Rs. 20.

A forward contract agreement entails certain obligations on the part of both the buyer and the seller, the sources said. On the buyer’s part, he is obliged to purchase a stipulated quantity at a given price, while the seller would have to ensure the supply of the quantities required during the contract period, while ensuring its quality.

"Another inquiry that we have received is from a local exporter who wants monthly quantities of 10,000 kg each of dried red chillies and big onions, they said. Meanwhile, Mahaweli farmers in the Kala Wewa, Anuradhapura, Kurunegala and Matale areas have already entered into a forward contract arrangements with Thriposha and Plenty Soya for the supply of 3,000 tonnes of soya annually to these organisations.

The price of a kg of soya is Rs. 22. This agreement benefits between 10,000 to 12,000 farmer families living in those areas, the sources said. There are a total of 128,000 farmer families settled in the Mahaweli area comprising a population of around 700,000.

The Mahaweli project which was accelerated under the previous regime opened up between 120,000 to 150,000 hectares (ha) of land for irrigation and settlement. "It opened up between 80,000 to 90,000 ha of irrigable land," they added.