With the support of service organizations in the production areas, Cargills developed an out growers programme to source its annual requirement of passion fruits. Even though no formal agreements were signed, farmers were assured a competitive market price for their produce, with a minimum guaranteed price of 120% of the cost of production. Cargills provided free seeds and technical advice (from land preparation to harvesting) through its own agriculture extension staff. Collaboration with research institutes, agriculture departments and other service organizations helped Cargills provide the farmers with assistance to improve their skills and knowledge. Farmers were exposed to new technologies and know-how, resulting in reduced post-harvest losses through proper plant husbandry and timely harvesting.
Figure 2 shows the supply chain for fruits and vegetables under the Cargills model. As can be seen the farmer receives a higher farm-gate price, and as fewer intermediaries are involved in the chain, farmers receive better prices, while enabling Cargills to lower retail price, thereby improving competitiveness.