NEW INDIA ROSES

NEW

INDIA ROSES

A VIBRANT BRAND WHICH WILL EVOLVE INDIA

FROM MASS FLORICULTURE TO CLASS FLORICULTURE

Today a glance at most Indian streets would show gleaming cars and shining showrooms, malls neatly stacked with premium products. Not all of them are high priced, but the presentation of the same has become more sophisticated and comparable with the best worldwide. You would also find the middle class comfortably shopping in these five star looking malls which are offering whopping discounts and competing with the traditional grocery stores. One would wonder for a moment whether you are in US or Europe. This new face of the Indian Economy is in stark contrast to the two car brand Indian Economy, just over a decade back.

As compared to this revolution in the Indian Automobile and Consumer sector, our Indian floriculture economy has not kept a matching pace. One of the reasons is the unique variety profile which comprises an overwhelming 75% old and some outdated varieties. These more commonly referred to affectionately as traditional varieties are finding difficulty in acquiring a suitable international market. How can then we in a luxury product business like floriculture be marketable when we have old and outdated products ? The answer to this big question best lies in the question itself ! And this question today is the biggest question facing the Indian Floriculture Industry ?

How do we make our flowers more marketable ? or How do we improve our marketing potential in the International markets? This today is the Great Challenge facing Indian Floriculture! Rather than be the judge and issue judgments as to what is Right or and what is Wrong, the solutions would be to conduct a deeper and detailed analysis in order to derive meaningful conclusions. This would then help in laying down a practical action plan for Indian floriculture marketing

Following is a detailed analysis of these many popular myths and popular mantras affecting the marketing of Indian floriculture

(A) Current Positioning of Indian Floriculture

Global floriculture production areas have been broadly classified into 4 levels based on their standard of flower produce. It basically conveys the level of a country’s maturity in international floriculture industry.

Level 1- Mass Producers

This comprises mostly entry level players who produce rose varieties which are commonly grown. Most of these countries have old varieties whose marketability is on the decline. Plantations are done based on availability of local planting material rather than what is demanded in the international market. Post harvest in these producing nations is also not of critical importance. Quantity is given more consideration than quality. These producers do well in markets which are not highly quality conscious. It is important for these exporting nations to graduate to the next level as early as possible.

Level 2 – Mostly Mass and a Few Class Producers

Nations which realize the importance of new and marketable varieties and better post harvest practice come under this level as a strategy for increasing sales realizations. These nations are basically mass producing nations but luckily have a few pioneers who have introduced world class varieties. But due various constraints and most important myths are not able to breakthrough and leap into the higher level immediately. These are nations like India which are in an overdue process of evolution.

Level 3 –Some Mass and Some Class Producers

This is the ideal level that India should aim for. India is a huge country of a billion people. Therefore we will always require mass and class producers to cater to its diverse requirements. In the current market scenario, it is very important for a country like India to break into this league of exporting nations as early as possible

Level 4 - Class producers and Hardly Any Mass Producers

This would be the ideal situation. But at the current state of our economy it would take us many decades for us to come into this stage. This level signifies a very mature economy

Today India is rapidly moving into level 2. There is a critical urgently for it to leap to level 3. The progression to the next level is an evolution and not a revolution as it also depends on the state of economy. With our national growth rate at 7%, which is high by international standards, the best time is now.

(B) Flowers - Dual Brand: Primary Brand and Secondary Brand

Each flower is identified with two brands. The first one is of the country it comes from , which is the called the primary brand. The second one is of the company it comes from, which is called the secondary brand.

The primary brand i.e. the national brand attains value only when it reaches level 3. At this level the farm or company brand can get further value and aspire to become a high end brand. However with the Indian Brand of Roses currently positioned at level 1, the companies from India cannot position themselves to be high end brands. Hence the most important target for all farms in India is band together and push our primary brand to level 3. At this stage they would be in a position to do brand building for their farms/companies.

The lower price fetched by Indian Roses in the Japanese markets as compared to the African Roses justify the fact of the national brand and primary brand theory. African Roses sometimes get as much as twice the rates of Indian produce. But a look at the quality of some of the best Indian farms vis a vis the African Roses doesn’t justify the huge price disparity. This difference in prices is due to the different positioning of Indian and African which has a tremendous effect of their price realizations.

Hence the reasons the efforts of a few farms inspite of their good quality are not getting due justice in terms of price realizations in the Japanese market. The solution lies in right positioning ourselves i.e. push our national brand to the premium level 3 and then work on start working on secondary brand building i.e. farms brands. We could then have even 10 brands or more.

Most farms talk of average price of India roses vis a vis average price of Kenya or Ethiopian roses. But when we do some more product analysis, we observe that, more than 75% of the Indian varieties are between the ages of even upto 8-10 years. Compare this with the African countries Where the average age of the rose varieties is less than 3.! That is where the profit is! Hence the importance of national positioning..

A simple example of power of a national brand is - Which would you prefer a Japanese camera or a Chinese camera ? The answer is obvious ! That is the power of a national brand ! Not that the Chinese camera is inferior in terms of quality. But it carries a lower reputation. Thus the real competition in floriculture is between two regions – specifically two countries. Just like in say the tourism Industry - Two hotels in Ooty are not competitors to each other. Rather Ooty and Kodaikanal are competitors to each other for getting tourists.

One of the most powerful tools in creating a national brand is through supplying top quality roses and by honoring intellectual property rights of the breeder by paying royalty. The nation would then stand tall among the global suppliers. We would then attract the premium buyers and not the grade two buyers.

(C ). Flowers – A Luxury product and an Agriculture product .

Flowers carry a unique combination as regards its positioning. It’s a fresh agriculture product and unlike any other fresh agriculture products it’s a luxury product. The only common link with agriculture is that it also comes from the ground and is hardly a product of necessity. The process of flower production is agriculture while the product is of a luxury nature. This unique qualification puts a tremendous pressure on the growers who find it difficult to practice this to success.

All agriculture products are items of necessity and hence all what is produced is sold.. Thus in fresh food like vegetables and fruits, the price variation among different varieties and qualities is not as wide as compared to flower. The reason is due to different consumer profile. Unlike food products, flowers are meeting fancies of high end customers. In case of flowers if the flower quality is not good, one hardly get any decent revenues.

The focus in flowers unlike conventional agriculture is on quality and variety rather than on any quantity. Thus growers who are excellent producers would not be able to earn well enough unless their product is in tune with the market trends. They have to use the best of inputs, chemicals and fertilizers in order to produce the best quality. Growers need to upgrade the mindset from mass production to class production. With an agriculture mindset it is not as easy as the focus is many times is on cutting costs.

Inspite of all the above, surprisingly the performance of small farmers in floriculture have been very encouraging !

(D) Post Harvest

Many growers feel that their responsibility is over once the flowers leave their farm gate. However the prices are realized as per the quality on arrival at the customer’s premises not as per quality on departure. In an exporting nation we need to focus on post harvest more than anything else. Use of better and specific post harvest chemicals are the need of the times. In general agriculture produce, a significant part is lost due to poor post harvest facilities. This is one of the main reasons why small farmers are not able to make it to the global floriculture stage.

Factors such as vase life and transportability are gaining more importance as a criteria for rose variety selection.. Fortunately today the younger generation, want to be exporters and global players and are not anymore interested and attracted by the fixed prices offered by exporters. Progressive growers have started using better post harvest like Florissant as well and a few are sending the flowers in sleeves. Floriculture truly belongs to this generation of risk takers. This changing attitude of Indian growers is very encouraging

There are many popular myths and opinions among the various players of Indian floriculture. Rather than be a judge and say what is Right or Wrong it would be prudent to conduct an unbiased analysis with reference to the various levels of flower producers and then derive practical conclusion which could help in laying down a practical action plan for floriculture development

1. Myth - Salesmanship and Floriculture

The popular opinion has been that marketing of flowers is the subject matter of marketing experts and all growers may not participate in the same. Rather the growers should focus on growing and leave the marketing aspects to experts who know the job better.

Analysis

In any of the global markets today, flowers are paid for the price and quality as on that day. What can be a better example than that of the flower growers who supply to the Dutch auctions and receive different prices every day. Thus the very nature of the floriculture industry limits the skills of sales professionals. This is particularly true for a country like India which is still in Level 1.

However these same sales professionals would be of great importance if the country is in a mature Level 3, when it has a good quality product. Then in such a situation the sales professionals can sell the flowers down the marketing chain as close as possible to the retailers and develop a client base. This will help in getter higher sales realizations.

But India is in early stages of Level 2. Hence it’s a bit early for sales professionals to exercise their skills. It is now more of the Technical Professionals job to push India to Level 3. Then we should leave the stage to the Sales professionals to demonstrate their skills.

This is unlike in the case of consumer products wherein even with an average quality product, one can with the help of marketing gimmicks still manage good sales. In contrast, with flowers one cannot indulge in such gimmicks with long term success.

Marketing gimmicks are more successfully executed for selling soft drinks, soaps or washing powders. Marketing gimmicks are like cheerleaders in cricket – they give a temporary boost to the game. However the real game would get a boost if the cricketers are good. Thus in international floriculture marketing we need to develop long term marketing strategies

2. Myth - Get a good buyer

A Popular mantra is get a good buyer,and then all the market problems are solved

Analysis

All of us spend a lot of time in looking for a good buyer ! Where is he ? Who is he? What is a good buyer ?

A good buyer is one who offers the highest price for the produce and one who really pays the same in time. A good buyer will require a good producer. And when one finally meets the good buyer he will tell you that he is looking for a good producer. So there lies the answer.

It reminds me of the famous story of the man struggling to find an ideal women to be his wife and when he finally meets an ideal woman – she says that she is looking for an ideal man to be her husband.

So the conclusion is - be a quality producer of varieties demanded in the international markets and you would be more visible to good buyers,

3. Myth - Be the only exclusive grower for a rose variety in India and you will make money

Analysis

This is based on the popular myth that one should plant

• A rose variety that no other grower in India has
• Yet suitable to Indian conditions
• Getting high prices in the international markets
• Is such a thing rationally possible ?

Exclusivity hardly makes any business sense unless it is at the global level. Being the only grower from your country of 2% global floriculture hardly means anything when 98% of the world has it. The real competition is from Africa.

True Exclusivity has only meaning if you are the only grower in the world and when the variety is grown on say 5 hectares and not 2000 sq mts. The exclusivity should be for a minimum period of 3 years. Examples of global exclusivity are the famous Red Rose Varieties viz. Taj Mahal and Kohinoor with Tan Flora and Ace Agro respectively.

4. Myth - Assured market or better buyback guarantee

Analysis

This is one of the bigger myths.. The answer is as simple or complex as “Tell me how much money I can earn in the next 10 years ?

If there was a perfect answer to this all the banks would have set up their own floriculture projects ! Its all demand and supply economics ! Its all about entrepreneurship ! We are all smaller than the market !

5. Myth - Bypass the Middle man

Analysis

By pass the middleman and you will pocket that much more margin. Seems intelligent strategy but its easier said that done. We need a deeper analysis as to the various middleman and their functions. Some middlemen do add value some others do not. We need to identify the few value adders and delete the others.

6. Myths - African reference rose varieties

Analysis

Today we have a large network of Indian professionals working in Kenya and Ethiopia. As African floriculture economy is more mature than India’s, a number of growers get information on the rose varieties performance from Indian managers situated there and base their plantation decisions on such opinions.. But varieties which grow well in Africa may not be suitable to India conditions.

Hence India has to find its own varieties in its own numerous regional demo houses and test market the same. This would involve periodic visits to demo houses and selecting a variety on its ground strength rather than on opinions of people.

7. Myth -The time is not right now!

Analysis

One of the most intelligent suggestions typically given by accountants is that “The time is not right now. And so -

• Lets not change the plants this year even to any better variety.
• Lets plant whatever is available locally at a cheap rate
• Lets replant again for what we have paid Royalty
• This years we will earn as much as money as possible.
• Most important lets keep costs low.
• We will have a close look at the market this year and then we will make our plan on the performance on 31^st March.
• May be (taking a big risk) we will plant 1000 sq. mts of one new rose variety and see what happens out of it “

Luckily all the rice and wheat producing farmers do not think this way otherwise we would have landed up in a real food crisis. Lets salute the Indian farmer for he is the most daring man in this country !

It’s a pity we are not looking at the opportunity costs. Whatever is produced is perishables and is sold !– The big question is ! - At what price ?– Is it economically viable ?

Thus the right time to make changes in plants and other improvements was yesterday ! After a second thought maybe Day Before Yesterday would have been better!

8. Myth -Tell me where is the market for Indian Roses ?

Analysis

Tell me where the market is and we will produce roses for it ? This question is commonly asked by accountants and bankers. It appears to be a very intelligent question. It’s fashionable as well and reflects the American way of thinking which is based on market research. If there was an easy answer, anybody would have started floriculture projects.

In reality floriculture markets are not officially created. Entrepreneurs create markets. Pioneers leads the way. At the end of world war II Japan and Korea were at the same level as India was then. What was different was their progressive thinking and entrepreneurial zeal. They looked at what they were good at and started producing it to world class standards. Products soon found export markets. That became their new culture.

Japan became a famous electronic nation and soon many more entrepreneurs started joining it. The country progressed to become a dominant electronic nation. It so became as it looked internally at what it could do better. There was no market for their products. The Japanese and Korean believe that if they can produce a product to global quality standards then they can market it. This they not only did in their domestic market but also in the international market with great success. We need to pick up lessons from them .

9. Myth -Select varieties based on high prices at the big Dutch/Japanese Auctions

Analysis

Prices are fetched as per the specific quality of rose variety from a particular country. When the same rose variety is grown in a different country under different climatic conditions, the quality with respect to the bud size, stem length and color may change, thus realizing a different price for the same variety.

Thus one should look at the sales price of different rose varieties from a broad point of view rather than with a speculative approach of a stock broker who monitors the share prices on his computer screen daily. Thus auction price indicate the acceptability of particular variety and the prices in the market.

In some cases little known rose varieties do better in India than in Holland and Africa. Therefore there is no big reflection of the same on the Auctions. Thus we need to look internally at our regional demo houses and create markets for what grows well to international standards and create a market for it. Sales professionals can play an important role in the same.

10. Myth – Safe to sell to Market Hubs

Analysis

A lot of flowers especially during the high seasons of valentine go through Auctions or through marketing companies. Majority of it is resold to various customers in western Europe situated in countries like Germany, UK, Italy etc.

Auctions are basically cooperative of local growers and hence would offer higher prices to locals growers. The big difference in price realized by local and foreign growers justifies the same. This is further affected by the high cost of auctions especially to foreign growers.

A prudent strategy would be to sell to direct markets especially in high season when the sales realization are higher. Hubs are best suited the home country and its neighbors not countries 8000 kms away.

Conclusion

Thus the critical need of the hour is to upgrade the Indian Rose Brand to New India Roses with national pride. As perishables are national brands we need to think as Indians first and then as growers.

The conclusions are obvious. The fact is that these various myths or popular mantras have stunted the growth of the Indian floriculture Industry.

The earlier we clear the same – the earlier we clear the runway for a smooth takeoff into the highly competitive global floriculture arena.

VEGETABLE SEED INDUSTRY

“VEGETABLE SEED INDUSTRY” – prospect and retrospect

The Indian Seed Industry at present is worth Rs. 500 crores of which around 200 crores is the export market. Private sector is contributing 60% by value and 40 % by volume in organized seed sector. If we see the opportunities, the Indian seed market can cross more than 10,000 crores worth of business in coming 10 years. Considering the huge area in each crop, the potential for quality seed supply is very high. The average yield is much lower in India in most of the crops even compared to the neighbouring countries. The variation in production and plateauing in yield is a major concern for the agricultural policy makers.

Quality seeds of improved varieties are the most strategic resources for higher and better vegetable yields. Good genetic composition and assured quality seed can only guarantee its response to fertilizers and other inputs in the expected manner. The advancement in genetic improvement and production technology of vegetables is directly related to the development of seed industry in the country.

The vegetable seed industry in India had a very modest beginning during the sixties and seventies of the 20^th century with handful of companies which were mostly selling imported seeds. An important landmark in the development of Indian seed Industry was the production of hybrid seeds of vegetables for commercial growing. On the lines of the recommendation made by NCA, 1971 the NSP, 1988 allowed that import seeds and germplasm for research purposes. The purpose was to promote developments that would maximize yields and increase farmers income. Presently, by volume of turnover, ratio between the private and public sectors is 60:40.

Traditionally, the seed industry was dominated by the public sector, largely due to protectionist attitude of Government. Private sector players were deterred from entering the industry. The industry was characterized by low margins and heavy subsidization. Presently there are about 200-225 private seed companies in India. However there are only a few exclusive vegetable seed companies. Public sector has its strength in improving germplasm by maintaining specific local races and developing high yielding varieties and hybrids in some of the crops. To carry out this desirable research deliverable to the farmers in an area where public sector has certain weakness and private sector can certainly hold hand and deliver these research in a much efficient way.

Both public and private sector organizations have a definite contribution each to promote in the development of vegetable seed industry and production of vegetables. The role of public sector is mainly catalytic in initiating seed production, quality control, seed certification, notification and registration of varieties and other regulatory systems. The private sector with their corporate management skill and scientific and technological expertise has been able to provide the Indian seed industry a strong base to fulfill the challenging task of meeting requirements of quality seeds. Synergism in research between public and private sectors has yielded useful results in many developing countries.

The Indian Seed Industry is undergoing wide ranging transformations, which include and increasing role of private seed companies, joint ventures of Indian companies with multinational seed companies with focus on biotechnology, and wide ranging changes in regulatory frameworks, which would affect seed research, marketing and trade in coming years. Joint ventures, partnerships, mergers and acquisition are proliferating in numerous areas of the seed industry between the private and public sectors as well as between national and international companies. The activities targeted in such joint ventures include R&D, production and marketing of hybrid seed. While the reform process initiated in the India seed sector continues to evolve, the private seed companies keenly await further initiatives and relaxations in the Government regulations in seed market.

But ahead along with these green patches some grey areas also exists viz. Intellectual property Rights, Farmers and Breeders Rights, lack of skilled and technical personals, open markets marred with mergers and acquisitions.

A rich blend of research activities of private and public enterprises is prevailing in India. Import of hybrids and OPV in cole crops exemplifies the successful/proper functioning of International seed trade. Seed associations are ready to take up the cause of the industry, to support effective and efficient seed trade with other countries for imports. The hybrids of vegetables are not only higher yielding than OP varieties but also many of them are early maturing, disease resistant and superior quality.

India has a unique opportunity in terms of breeding a range of vegetable crops. Competent breeders capable of developing superior hybrids, backed by strong production capabilities can galvanize the industry towards development of hybrids not only for the Indian subcontinent but also for other Asian and middle-eastern countries. India has a vibrant vegetable seed industry and appears to be on the right track for the bright future.

Abid Hussain

Say It with FLOWER...

Floriculture becomes the blooming sector of India

India has an ancient heritage when it comes to floriculture. Floriculture has emerged as an economically viable diversification option in the Indian agribusiness and has captured the interests of many new entrepreneurs into agricultural sector in recent times. With perception on floriculture business potential rapidly changing, the corporates have increasingly forayed into the sector. Indian roses, carnations, orchids, gladioli and anthurium are being well received in Japan, Netherlands, USA, Germany and France. Besides flowers, India also exports seeds, bulbs, dried flowers, ferns, leaves and grass. Floricultural crops like roses, gerberas, carnetions etc. are grown in green houses. The open field crops are chrysanthemum, roses, gaillardia, lily, mary gold, aster, tube rose etc.

The floricultural production has doubled during the last ten years and production of cut flowers and loose flowers have been growing at 15 to 20 per cent every year. The area under floriculture increased from 53,000 ha in the year 1993-94 to 1, 61,000 ha during 2007-08, which is more than 300% increase in the span of 15 years. There is tremendous increase in loose flower as well as in cut flower production. Similarly, the floricultural exports have taken a quantum jump in the last decade from 14.45 crores in 1991-92, it has been increased to Rs. 652.69 crores in 2006-07. The industry is mostly characterized by sale of mostly loose flowers (rose, chrysanthemum, jasmine, marigold, crossandra, tuberose etc.) and cut flowers (rose, carnation, chrysanthemum, gladiolus, gerbera, orchids, anthuriums, liliums, alstroemeria, tulip etc.). India is secomd in loose flowers production after China. About 1,26,000 ha area is under floriculture, producing 6,94,000 MT of loose flowers annually. The production of cut flowers increased over the years to touch a production of 2,762 million flowers. Tamil Nadu is the leading producer of loose flowers closely followed by Karnataka. Nearly 77 per cent of area under floricultural crops is mainly concentrated in seven states comprising of Tamil Nadu, Karnataka, Andhra Pradesh, West Bengal, Maharashtra, Haryana, Uttar Pradesh and Delhi.

Currently, flower trade has attracted the largest demand from an estimated 300 million middle-class flower-loving people with consumption in the cities and major towns at 40 per cent per annum. Flower retail shops have mushroomed all over the place from major metros to market shops and flower boutiques. Further the supermarket/hypermarket retail chains have fueled the growth in the consumption. Cashing in on this trend, the Minister of State for Commerce also feels that floriculture is all about creating new employment opportunities in far flung areas - rather than talking about Dollars, the focus should be on a million jobs! Additionally, supermarket chains overseas like TESCO, Sainsbury, Wal-Mart, Asda, Sears, Carrefour, Metro, K-Mart and the likes are looking for large quantities of flowers, latest varieties and a well-defined supply chain. Therefore, floriculture in India is becoming an attractive commercially viable diversification option. Several companies involved in agri business are set to venture into this sunrise industry.

Importantly, owing to favourable policies of the Indian Government, Corporate Houses are encouraged to set up units with global scale and size, so they can meet the volume, consistency and quality demands of the global buyers. For instance, companies like Reliance, ITC, Tata Tea, Bharti Group/Field Fresh and Thapar Group are planning investments in the flower sector.

Various initiatives that are being proposed are: - Owing to the diverse climates available for producing a range of crops, it was proposed that mapping of the country is important to identify specific zones suited for a particular product. Around these zones, common facilities will be built for handling and technology transfer.

- APEDA, the nodal agency has helped set up six Agri Export Zones for floriculture – export-dedicated enclaves. Here units have come up in clusters of large flower farms, with common infrastructure facilities thrown in – all offering much needed benefits of economy of scale.

- Owing to 100% foreign direct investments, contract farming, joint ventures and foreign investments are being planned which have led to smoothening of the investment, thereby foreign investors are welcome to come here, produce floriculture products, perhaps cheaper than they are used to, and then supply them to third countries – a sort of outsourcing hub.

- Some key Indian airports like New Delhi, Mumbai, Hyderabad, Bangalore, Chennai, Thiruvananthapuram and Cochin now have cold storage and cargo handling facilities. More airports will have these facilities in the future.

- Among other things, flower Auction Centres are also coming up in Bangalore, Mumbai, Noida, near Delhi, and Kolkata. These are ready made market facilities for trading and price discovery for a variety of flowers, both for export and domestic markets

- Additionally, outside the country, APEDA is running a Market Facilitation Centre at Aalsmeer, Holland, to support the export efforts by Indian producers in Europe. The agency is happy with the way the things have gone on there. Similar centers may now be on their way for Japan and Middle East markets as well.

- Thanks to the variety of agro climatic zones within, India today is in a unique position to grow a large number of flowers, including temperate flowers in high altitude states. In India, we can now cultivate a wider variety on a commercial basis – an impressive range — of carnation, gerbera, lilium, orchids, anthurium and many others. Interestingly, we have genetically designed flowers – ones with unique shape, petal size, pleasing colours with longer shelf life and of course pleasant fragrance – a rose, for instance, that will be equally attractive to the humans and the bees.

Hence the growth in floriculture cultivation has been phenomenal in the last decade or so and the area under flower cultivation has doubled from 53,000 hectares (1993-94) to 103,000 hectares (2001-02).

Six Agri Export Zones have been set up in the states of Sikkim, Tamil Nadu, Uttaranchal, Karanataka and Maharashtra. APEDA has also taken number of measures to facilitate floriculture exports. Besides setting up cold storage and cargo handling facilities at the key airports of New Delhi, Mumbai, Hyderabad, Bangalore, Chennai, Trivandrum and Cochin. Proposals are under consideration for setting up of such facilities at Goa, Calicut and Coimbatore Airport.

Roadblocks:

Today the industry faces many issues (apart from the primary infrastructural issues), which have constrained its growth potential. Recognizing the importance of the sector’s contribution to national agricultural economy, the Government of India has introduced many developmental programmes mainly through the schemes of Ministry of Commerce (APEDA) and Ministry of Agriculture (National Horticulture Board, etc.). Most of the state governments have also initiated their own programmes providing technical and financial assistance to the millions of small and large producers. Prominent schemes of APEDA to promote this sector are the Transport Assistance Scheme and other schemes to promote floriculture exports, infrastructure development/upgradation assistance (including special schemes for the North East States), promotion of Agri Export Zones for floriculture, etc. Separately, NHB/Ministry of Agriculture has various schemes to promote this sector including a subsidy scheme for encouraging growth of new floriculture units.

The Indian floriculture industry is worried about the present state of affairs. In addition to the usual domestic infrastructure and marketing-related problems, the price realization this year for Indian flowers touched a new low, hit by some unusual international conditions. Off take is much lower than usual and competition is fierce. The severe winter in the consuming countries resulted in fewer people going out on the streets to buy flowers, according to industry sources. A general feeling of depression runs through the industry. The units have still to contend with various infrastructure and marketing problems. The air freight charges, already high, have been hiked again. Most of the carriers do not maintain the cold chain, which is absolutely essential if the flowers are to remain fresh until they reach their destination.

The industry has listed the kind of support required from the Government creating adequate infrastructure, rescheduling the re-payment schedules to financial institutions, increasing the soft loan assistance of the National Horticultural Board, providing insurance cover for perishables, among others. National Bank for Agriculture and Rural Development (NABARD), the Indian apex bank for agriculture development and finance, in its Strategic Action Plan addressing the State and Union Governments, highlights the problems faced by entrepreneurs in these non-traditional farming sectors. It makes out a special case for setting up an international airport in Bangalore, besides the proposed horticulture and floriculture board. It has identified over 20 problem areas to be reviewed, some through suitable policy decisions.

The recommendations include duty and freight relief, timely flight connections, infrastructure facilities, research support, and also the setting up of a body to review and support the growing sector. At the state government level, it has suggested that the projects be exempted from power cuts, tariff variations, purchase and sales tax.

Along with this, the Central Government has been urged to take up the heavy 15 per cent import duty that the European Community imposes only on flowers from India, while those from Israel, Colombia and African nations are exempt. The airlines should operate sufficient morning flights to Mumbai, from where the commodities are flown out, to meet the schedules for the perishable goods, it has recommended.

The floriculture industry's fear that airline companies, which carry flowers to Holland, are operating in a cartel has been reinforced by the ongoing battle between Air France and Bangalore-based companies. The silver lining in the entire affair is that all the companies have joined together. The individual companies in the fledgling industry are too small to be of consequence and ever since the formation of the SIFA, they have been working together to transport cargo and even market flowers abroad.

Four breeders of roses - De Ruitar, Tan Tau, Meilland and Kordes - hold the patents for most of the existing rose varieties in India. Some growers have been propagating well known varieties from these breeders without paying royalty on the mother plants. The raids had been deliberately planned in the period around Valentine's Day - when prices are almost ten times those of ordinary times - so that the losses would be felt more keenly by the offenders.

The news of fake Grand Gala variety found in an export consignment from Bangalore has shocked the floriculture industry here. Government organisations such as the FIEO and APEDA have not accorded the matter much importance, however.

The general feeling is that it is only a small case and is unlikely to affect the industry as a whole. It is only a temporary phenomenon and those who are not violators have nothing to worry about, said an industry source.

The Way Ahead:

In the global floriculture industry, competitive advantages can be created and retained only by achieving a critical mass of production and our country has natural advantages that can be harnessed to create such competitive advantages in the production and exports of cut flowers. The international trade in floriculture is large and estimated to grow to USD 16 billion by the year 2010 from the present level of USD 11 billion. Although, the value of exports of floriculture products from India has shown very significant growth, from Rs.18.83 crores (1993-94) to over Rs.305 crores (2005-06), India is still a marginal player in the world floriculture trade indicating the strong potential that can be exploited in the sector.s

If India has to achieve the ambitious export target of Rs.1,000 crores per annum over the next 5 years, a paradigm shift is required. The key issues that need to be addressed in the Indian context are - Economies of scale, Product range/ Latest varieties, Year round exports, Quality control and Certification, Cold chain management. APEDA has been addressing these issues through various forums on a concerted basis given its mandate to promote floriculture exports from India.

Abid Hussain

SEZ’s tryst with agriculture

India has seen a manifold increase in the number of Special Economic Zones during the last few years. The various incentives given to the Special Economic Zones in India are that the units within the SEZ are exempted from paying 100% income tax on the export income for a period of 5 years and after that they have an exemption of 50% income tax for a period of 5 years. Further the various incentives that are given to the Special Economic Zones in India are that the local procurement of goods that are used for the operation, maintenance, and development of the units of SEZ are duty free and exempt from sales tax, mandi tax, turnover tax, and electricity cess.

IFFCO Kisan SEZ has attracted the International & Indian Investors interest to invest in first high productive agricultural production and processing agro-park. The International Investor’s meet held recently was successfully hosted by IFFCO for its first multi-product agriculture-based Agro- Park, christened ‘IFFCO Kisan SEZ’, coming up in Nellore, Andhra Pradesh. Various companies from Netherland, Israel and Italy participated along with many renowned Indian agri-business counterparts.

Speaking at the event, Mr. Rakesh Kapur, Deputy Managing Director, IFFCO said that IFFCO would be investing in the development of world class infrastructure for the park and was open to new and innovative ways of participation. He added that the co-operative would also evaluate the options of investing in specific joint ventures which when actualized, would have a positive influence on the lives of farmers in the region. Investors have shown interest to tap opportunities in areas such as greenhouses, dairy production and processing, high end processing of poultry products, fruit and vegetable processing, processing of paddy and bio-mass based power generation. A renowned domestic fruit and vegetable retailer has expressed interest in setting up a fruit processing unit and is in the advanced stage of the feasibility study. Like wise, a leading Indian conglomerate has proposed to set up a fully integrated dairy farm and is in dialog with international technology partners. Leading Dutch and Israeli business houses are scouting for Indian partners to venture into green house production and integrated poultry production. Under a hub & spoke model, about 108 Rural Transformation Centers (RTCs) will be developed at the village level to enable direct linkage of the farmers to the demand side of the food chain. These centers would act not only as a collection point for supply of raw materials to the AFP but also serve as vehicles for agri-extension and quality control. It is expected to generate employment avenues for more than 5,000 persons apart from large-scale economic development of the region.

Another SEZ in agriculture is of Fresco Foods Pvt. Ltd, a private manufacturer which will commission a gherkin processing facility located in the SEZ for agro and food processing of the Karnataka Industrial Area Development Board in Hassan. The facility is spread across 8 acres of land and has a built-up area of 50,000 sq. ft. The production will commence in July. Fresco has got into contract farming in Davangere, Tumkur and Hassan. They have identified 1,200 farmers. The company has entered into an agreement with the farmers to buy back the produce at pre-agreed prices. It will tap the North America, Australia, New Zealand, South Africa and Korea markets after consolidating its presence in Europe. SEZs are envisioned as an instrument to promote many objectives, especially the export of particular product by simultaneously creating centres of demand for unskilled labour and for a variety of agricultural products needed by the urban centre produced in the SEZ.

Mr. Hanan Ezekiel, Independent Consultant feels that making the land available to the SEZ at subsidized prices may have been independently justified, but it was certainly not justified to impose the burden of this subsidy on the particular farmers whose land happened to be located in the area selected for the SEZ. “In setting up and promoting the SEZ, the government should have made it clear that it bore the cost of the subsidy by paying full price for the land, but making that land available to the SEZ at a lower price”, he said. “What the country needs is clearer thinking on rural development policies and programmes and their effective implementation. Only in this way will India begin to achieve the rapid rural development it has always needed, and still needs so badly right now”, he added.

Abid Hussain

Mango’s Marketing Ordeal

Mango, the king of fruits and a sure delicacy for many palates, is a native of India and SE Asian countries. Their presence in varied geographical locations has endowed this crop with thousands of varieties – diverse in shape, colour and taste, but only about 20 has been regarded as commercially relevant. Mango occupies roughly one million hectares which is 40 percent of the total area under fruit cultivation. India is the world’s largest producer of mangoes, accounting for more than half of the worldwide production.

Marketing

This seasonal fruit captures the markets, streets, roadsides and homes in India during the summer months of April-July. The fruit after harvest has to pass through several agencies before reaching the consumer. As producers do not generally undertake wholesale distribution, it is a common practice to lease out the orchards to pre-harvest contractors-who take care of watch and ward of the crop till maturity and then dispose the produce as it suits them. There is a wide disparity in the prices of standing crop from place to place and even from year to year in the same area and from one orchard to another. It is mainly due to the irregular bearing habit of mango trees. Income from mango orchards therefore is very uncertain. Usually contractors are financed by commission agents or wholesalers. Thus the contractor is obliged to sell the produce through the leading commission agents. Sometimes they dispose the produce directly to wholesalers or retailers. Commission agents, generally known as arhatiyas or dalals also include the forwarding agents who own the responsibility of proper packaging and transit. They are the most important link in the marketing of mango and about two thirds of the total market is controlled by these agents. hey are located in both the assembling (producing) and consumption centers. At some places, they not only sell fruits on commission basis but also transact wholesale business on their own account. In big cities like Mumbai, Kolkata, Lucknow and Delhi, there are separate commission agents for imported fruits and for local produce. A study conducted at Azadpur Mandi of Delhi revealed that the growers hardly made any profit, especially when fixed costs were taken into account. Commission agents charged 8 percent on the transactions. The profit reaped by the wholesalers and retailers was around 81 percent and 45 percent on their investment respectively, after taking into account the mango losses in transit, which during different periods ranged from 8 to 12.5 percent. The maximum losses were observed during the months of July and August when both the temperature and the humidity contributed to it. For the various processed products of the mango, the profit margins ranged from 23 percent to 137 percent. The study clearly brings out the exploitation of the mango market by various intermediaries at the cost of the growers. Hence, there is an immediate need for corrective measures like cooperative marketing and processing of mangoes.

But a very few co-operative societies exist in mango-producing areas. In Uttar Pradesh, the premier mango-producing state, there is no such society. There are a few societies in Andhra Pradesh, Gujarat and Maharashtra, which purchase the farmers’ produce and transport it to distant markets to the commission agents. The marketing of mango in Bulsar district of Gujarat is mostly done by co-operative societies, of which all the growers and commission agents are members. These societies advance about 50% of the cost to the grower and the balance is cleared immediately after his produce is sold. The mango sale societies at Vengurla, Malva and Deogarh in Ratnagiri district of Maharashtra are also functioning well. They collect the produce of their members and send it for sale to the commission agents at Mumbai. The Government of Uttar Pradesh has proposed to create Fruit Growers’ Associations in all the districts under their Horticultural Development Scheme. In Tamil Nadu and Andhra Pradesh, there are 10 co-operative societies for marketing of mangoes, whereas Bihar hase only 2 fruit growers associations. Karnataka also is quite behind in numbers with only the Mysore Horticulture Society to help the marketing of fruits. The retail distribution is done by growers, contractors, commission agents and wholesalers, stallholders, shop-keepers and hawkers in varying degrees. A fairly large proportion of the profit is taken away by the intermediaries. To ensure better returns to the growers, and fruits at cheaper rates to the consumers, formation of fruit grower’s co-operative sale societies deserves encouragement.

Main Distribution and Marketing Centres

Mangoes grown in different parts of the country are transported to the big cities for marketing. The fruits produced in Andhra Pradesh and Tamil Nadu find markets in Nagpur, Mumbai, Kolkata and vice versa. The important wholesale mango markets in India are Kolkata, Delhi, Mumbai, Madras, Ahmedabad, Pune and Nagpur. Mangoes for these big markets are usually collected at the central places in all the mango-growing areas, e.g., in Uttar Pradesh, Lucknowand Varanasi; in Gujarat, Gandevi, Gadat and Amalsar talukas of Bulsar district; and inMaharashtra, Ratnagiri and Vengurla. Mango prices vary a great deal from year to year, depending upon each year’s total production and various other factors like prevailing prices, demand, transport and marketing facilities. Wholesale prices of mangoes also vary considerably, depending upon the supply and demand of particular varieties, periods of availability, weather conditions, transport facilities, variety, quality, etc. Daily arrivals have also a direct bearing on the prices. Thus, the fluctuations in prices are consistently irregular in pattern. Ordinarily, however, the prices are higher at the commencement of the season, declining gradually as the supplies increase. Later on, when the arrivals decrease, they tend to recover and reach a high level again before the close of the season.

Exports

There was a ban on exporting Indian mangoes to major importing countries of US and Japan due to pesticide residues and fruit fly presence and very recently been allowed to enter. Now that the ban has been lifted, there are approximately 20 types of “commercially viable” mango varieties that are exported from India to the US and demand for them is considerably high.India’s efforts of developing a market in the US after the lift of the ban the mangoes have taken a short-term hit due to the economic slowdown. The irradiation facility of the Bhabha Atomic Research Centre (BARC) at Lasalgaon is the only such facility for mango exports in the country. In 2008, nearly 350 tonnes of mangoes were exported to the US from this facility. Currently, non-resident Indians (NRIs) are the major consumers of Indian mangoes in the US. But efforts are on to cultivate a taste for the king of Indian fruits among local Americans. Most of the USdemand is for the Alphonso mango. But this is a delicate fruit and has problems of spongy tissue.Maharashtra, a major exporting state of mango, noticed a yield loss to the tune of 35-40% this year, due to changes in climatic conditions since here was hardly any winter this year. Due to the high temperatures prevailing in the winter season, there was considerable flower and fruit drop. Alongside, the APEDA has issued fresh guidelines for mango exporters in the current season to minimize the rejection of fruit consignment by the US on quality grounds by taking appropriate precautionary measures to ensure that mangoes sent for irradiation are free from any kind of contamination or injury. Irradiation has been made mandatory by the US last year to allow the Indian fruit, ensuring the quality of fruit with high standard and no complaints, rejections. What is most interesting about mangoes, however, is that there are hundreds more varieties of mangoes that no one will ever be able to taste, outside India. Most of these mangoes are too far from any shore of the subcontinent to be transported before they ripen and start to rot. In other words, these mangoes are landlocked. Yet they offer one of the most authentic food experiences you can have in the world.

Abid Hussain

“The Luscious Litchi”

The taste of sumptuous litchi lingers on in the palates of the fruit lovers especially East Indians, who relish the freshly tree picked juicy and fleshy succulent fruits, well deserved to be hailed as the Queen of fruits.

India is the second largest producer of litchi after China and accounts for about one-fifth of the global production. Presently, the area under litchi is around 3 lakhs hectare with an annual production of about 18 lakhs tones. Bihar ranks top in production and area under litchi in the country producing 70% of total litchi from nearly 54% of the area under litchi plantation in the country. In Bihar, litchi is mainly cultivated in the districts of Muzaffarpur, Vaishali, Sitamarhi, West & East Chaparan, Darbhanga, Samastipur. Area under litchi in Muzaffarpur district is about 8000 Hectares with a production of about 75000t.

Major litchi producing pockets:

1. Bihar (Muzzafarpur, East Champaran, Samastipur, Vaishali, Bhagalpur)
2. Uttarakhand (Dehradun, Pithauragarh, Nainital, Haridwar)
3. West Bengal (Murshidabad, 24 Paraganas)
4. Assam (Kamrup, Sonitpur, Bongaigaon)
5. Punjab (Gurdaspur, Ropar, Hoshyarpur)
6. Uttar Pradesh (Saharanpur,)
7. Jharkhand & Tripura

Major commercial varieties :

Bihar – Shahi, Rose Scented, China, Kasba, Purbi, Early Bedana, Late Bedana

Uttarakhand– Rose Scented, Dehradun, Calcuttia

West Bengal – Bombay Green, Kalyani Selection

Punjab– Muzaffarpur, Dehradun, Seedless, Late Bedana

Litchi, a highly perishable fruit, is marketed as early as possible. Farmers directly sell their produce to the middlemen. The fruit is sold through a post harvest contractor to the wholesale or commission agent, who undertakes the harvesting and packing, in addition to transporting the produce to the market. More than 65% of the growers prefer sale through post harvest contractor and about 20% undertake self marketing.

Litchi has a fair share of its problems

“At present the litchi economy in the State is plagued by variety of problems such as lack of good planting material, inadequate processing and marketing facilities etc. Due to perishable nature of the fruit, lack of cold storages and supply chain, unorganized marketing chain and failure to meet the international export standards, the export potential of this fruit has not crossed even 1% of the State’s production,” laments Mr. Ramadhar, Chairman, Bihar State Farmers Commission, Patna.

Litchi farmer Chandan Jha says, “Litchi is plucked at 42°C. It cannot be packed like other fruits. It needs to be transported at 2-4°C or else it will rot within 72 hours”. Jha informed about a long pending demand for a common facility centre with air-conditioned vans, storage and treatment service. “Even if the state Government gives a 50% grant on transportation through a cold chain from Bihar to the metros, the inter-state litchi trade would turn in huge profits for the farmers”.

Pankaj Kumar, a farmer in Muzaffarpur says, “Bihar can figure among the big exporters only if the government encourages us”. Bihar Government officials, however, said it was not possible to provide a cold chain facility from Bihar to Delhi and Mumbai. A senior official in the Agriculture Department said: “The Government has been considering storage centres. It may also take up the matter with the new Railway Minister to provide air-conditioned bogies for litchi export”.

Sizzling heat and absence of rains has hit hard the production of litchis in the district, known for its juicy and seedless variety of the fruit. "Due to no rain in most areas of Uttarakhand, the trees have not borne fruits and the litchi production has decreased by nearly 25%," says horticulture expert Amar Singh. The market price of the fruit has also increased due to a slump in its production. "The low production has incurred huge losses to the producers of the fruit. At present a total of 3,500 hectare area is used for the production of litchi, which has been affected by the change in weather," says Kirti Singh, a producer in Vikasnagar.

After leading the country’s litchi production for decades, climatic setbacks this year have shrunk production, by volume and in quality. Growers have suffered losses and exporters are disinterested after last year’s surplus production and impressive exports. Dr. KK Kumar, Director, NRC on Litchi says, “Litchi production this year had been badly hit by high temperatures, followed immediately by rains. Farmers and exporters have all been hit. Inclement weather conditions and a fall in the water table have affected litchi cultivation. Even many of the farmers went for pre-mature harvesting to lessen the losses.” Exporters too were hit hard. Last year, a record 100t of litchi was exported. This year, this would not come to even half the quantity. The quality of litchi fruit has also suffered. Many have turned sour. The export quality litchis are to be delicious and should have the diameter of 6 cm. Bihar’s lone exporter of litchi, Raj Kumar Kedia, said that 40% of the fruit had been destroyed by the excessive heat in April, followed by the rains. “The fruit has been damaged and its quality is not fit for export,” he said.

Litchi Fresh Fruits Export

Litchi is being exported to many of the Western countries and Gulf. But due to low productivity of orchards, we are unable to meet the export the demand, as of high domestic demands and higher freight cost added with the problem of cool chain infrastructure. Litchi is exported mainly through Nafed to England, France, Netherland, US, Canada, Dubai, Saudi, UAE, Vietnam, Nepal, Bangladesh etc at very competitive prices. Some times, even a very low/ no export is noticed, because of lack of exportable quality Litchi and lower production and natural calamities in the production pockets.

Packaging

After harvesting, fruit should be packed as quickly as possible, as their quality deteriorates markedly, if they are exposed to sun even for a few hours. Litchi fruit cannot be kept for more than a few days after harvest, at room temperature.

India is eyeing a new Israeli technology to increase the life span of the litchi fruit. Israel had an innovative technology to keep perishable fruits like litchi fresh for at least 28 days. Access to this technology will increase earnings manifold. Soon, the Union agriculture ministry is going to sign a MoU with Israel for the transfer of the technology.

Cool chain is essential during the transport of export quality commodity all the way from the farm to the customer. This helps in maintaining the temperature inside the box at the same low level as in the cold storage at the various stages right from the orchards to the point of disposal and consumption.

Processing and Value- addition:

There are also about 5 litchi processing units operating from Muzaffarpur and another 2-3 in the adjoining areas of Hajipur. Few of them are Litchika International, Shyama Agro- Industry, Premier Food Products, Thakur Litchi Industry, Radha Krishna Implex Pvt. Ltd., Amrapali Food & beverages etc. They mainly process the litchi fruits into products like litchi squash, litchi honey, litchi juice and canned litchi. Litchi wine is also expected to hit the market soon.

Processing Units

S. No.	NAME OF UNIT	PRODUCTS
1	Litchika International	Litchi Squash, Litchi Canning & Litchi Honey
2	Shyama Agro-industry	Squash & Canning
3	Premier Food Products	Squash & Canning
4	Thakur Litchi Industry	Squash & Canning
5	Radha Krishna Implex Pvt. Ltd.	Pasturised Litchi Juice

Ways to unlock the litchi potential

To boost production and marketing of litchi, a three-tier system involving growers, processors and exporters may be formed along with export processing zones and marketing boards. Storage, pre-cooling and transport facilities can be developed to help the growers realize better price. Processing units close to production centres, with financial and technical support from various Govt./non-Govt. agencies is also another area that has to intensely developed.

According to Bachcha Prasad Singh, General Secretary, All India Litchi Grower’s Association the state and central government is not much serious about the development of the Litchi farmers and the industry. The farmers have to be provided with some kind of stimulus package to boost the production and exports in the form of schemes, training programmes and exposure to the emerging technologies, which has not well taken care by the exclusive Research centre and University authorities.

Dr. P. K. Ray, Professor, Horticulture, Rajendra Agricultural University, Pusa says, “Growers have to be linked with the market chain and they have to be provided with the incentives to enhance the acreage and adopt the proper valid technologies to the farms, then only we can think of foreign market as we are not even able to meet out our domestic consumption. The post harvest losses are huge in litchi which can be reduced by creating processing hubs in the production pockets.”

Abid Hussain