Abstract:
The fruit and vegetable industry is considered to have the potential to develop
backward linkages towards small farmers and so accelerate crop diversification in
the paddy dominated non-plantation agriculture in Sri Lanka. Therefore, it may be
instrumental to have some understanding of the type of backward linkages used by the
industry to procure raw materials, the associated constraints and the industry’s
perception of small farmers as suppliers. This study utilized data collected from ten
fruit and vegetable processors, seven exporters and one of the largest supermarket
chains in Sri Lanka. Spot markets, contract suppliers and contract farmers were the
three major procurement channels of the fruit and vegetable industry. The industry
considered contract farmers as a reliable source of raw material supply. Moreover,
the industry had a positive perception of small farmers’ ability to be contract-farming
partners to supply industry requirements. However, lack of proper organization
models to organize small farmers was seen as a major constraint resulting in high
cost of establishing and managing linkages with small farmers.
