Every procurement system creates value.

The real question is who gets to keep it.

This question is rarely asked openly.

Instead, it is answered silently — through classification, timing, opacity, and power.

Value capture is not an accident.

It is the outcome of design.

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Value is not created at one point. It shifts.

Consider a simple vegetable chain.

A farmer grows a crop.

The buyer aggregates it.

The processor sorts it.

The brand sells it.

At each step, value can:

• increase,

• shift,

• or disappear.

The conflict begins when value shifts without acknowledgement.

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The invisible moment of value transfer

It’s February near Sambhar.

A lot of capsicum is accepted at a moderate price.

Later, at the warehouse, it is sorted.

• Top-grade goes to premium retail.

• Mid-grade goes to institutional buyers.

• Lower-grade is sent for processing.

All three generate revenue.

But the farmer was paid for an average.

No cheating occurred.

No rule was broken.

Yet value moved — quietly — from the farm to the system.

Governance asks one uncomfortable question:

Was this value shift declared, designed, and agreed — or merely convenient?

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Classification decides value — not effort

Farmers often believe effort determines value.

It doesn’t.

Classification does.

A crooked carrot grown with the same care as a straight one

can be valued at half — or rejected entirely.

This is not inherently unfair.

But it becomes unfair when:

• classification logic is hidden,

• downstream use is undisclosed,

• and price signals are flattened.

Effort without visibility becomes exploitation.

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Aggregation is where value quietly concentrates

Aggregation is powerful.

When small lots become large lots:

• negotiating power increases,

• options expand,

• and margins widen.

Who controls aggregation controls value capture.

If aggregation benefits only one side,

trust erodes even when prices look “market-aligned.”

Governance insists that aggregation advantages be shared or explained.

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Milk cooperatives understood this early

Milk systems learned hard lessons decades ago.

They realised:

• fat testing redistributes value,

• pooling smooths risk,

• and transparent pricing stabilises loyalty.

That is why:

• bonuses exist,

• penalties are graded,

• and rates are publicly discussed.

Vegetable and animal systems often ignore these lessons — and repeat the same mistakes.

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The silent bias of channel preference

Not all channels are equal.

Retail prefers aesthetics.

Processing prefers consistency.

Export prefers uniformity.

Local markets prefer immediacy.

When buyers optimise for one channel silently:

• farmers unknowingly subsidise that choice.

Rejecting produce because your chosen channel can’t absorb it

is not a quality issue — it’s a strategy issue.

Governance separates channel strategy from farmer accountability.

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Value loss is as important as value capture

Sometimes, value isn’t captured by anyone.

It is lost.

• over-ripening,

• spoilage,

• stress mortality,

• delayed chilling,

• missed windows.

When systems push risk upstream,

losses land downstream — on farmers.

A fair system absorbs some loss itself.

That’s not charity.

That’s partnership.

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Live animals make value capture visible

Live animal procurement exposes value dynamics brutally.

A goat bought underweight and fattened later

creates visible value addition.

If the farmer was never informed of this potential,

resentment is inevitable when prices are compared later.

Markets accept this reality openly.

Direct procurement often pretends it doesn’t exist.

Pretence is what breaks trust.

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Transparency doesn’t mean equal sharing — it means honest sharing

Governance does not require:

• equal margins,

• or identical outcomes.

It requires:

• visibility,

• explanation,

• and predictability.

Farmers don’t demand all the value.

They demand not being surprised by where it went.

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A simple value governance test

Ask this question honestly:

“If the farmer knew exactly how this produce was finally used and priced, would they feel cheated?”

If the answer is yes —

value capture is happening quietly, not fairly.

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Why this chapter matters

Most procurement relationships don’t collapse loudly.

They fade.

Farmers stop calling.

Volumes shrink.

Trust disappears.

When asked why, people say:

“Rates weren’t good.”

But the real reason is often simpler:

Value moved — and no one spoke about it.

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What comes next

So far, we’ve talked about:

• decisions,

• timing,

• price,

• rejection,

• quality,

• and value.

Now we enter a more sensitive territory — food ethics and contamination.

Because once produce leaves the farm,

risk multiplies — and responsibility shifts.