Though initially aimed only at the export market, the domestic floriculture industry is growing in leaps and bounds with a little help from the government and NGOs, writes Agnibesh Das
Back in the early nineties, the government of India began to look at floriculture as a possible export option for the country. Floriculture had a lot of potential as it did not have a lot of constraints that is faced by agriculture in the country. For one, small land holdings, the biggest bane to efficient produce that India faces, does not affect this industry. Two to three acres of fields would be good enough to profitably enter the industry. It was capital intensive, but if sufficient numbers of entrepreneurs could be involved, it could be a big export. Several state bodies, like the Bengal National Chamber of Commerce, started outreach programmes to further give a boost to the industry.
It seemed to be working for a while as well, with a boost in both growth and exports in 2006, but that quickly fizzled out. The hurdles were many. Freight costs were extremely high and that made it difficult for the small and medium investors to operate. More importantly, the export industry works on very stringent standards of quality. Even a single specimen in an entire shipment could result in the rejection of the entire shipment. With a commodity as delicate and with as little shelf life as flowers, this posed a huge problem indeed.
While the exercise was not a success in the strict sense of the word, it did open up another possibility. There is a huge internal demand in the country as well. With greater exposure to the world, this demand is growing, not only in size but also in sophistication and variety. Given the large domestic market, it would be a viable option to take up floriculture in a big way for domestic consumption. Not only is there a huge domestic demand, the country is actually importing a good deal of flowers now.
A common north Indian spends more than a lakh on floral decorations during a marriage ceremony. The market, as is evident, is huge. The industry has grown in leaps and bounds in the past few years. “Approximately 2.4 lakh hectares are under floriculture cultivation in the country at present, with a turnover of more than Rs 1 lakh crores. You see, the return of investment is pretty high here. In even a half acre area, the farmer can turn a profit of four to five lakhs,” says Dr SC Pawar of the Union Ministry of Agriculture.
Here, too, there are hurdles. Problems exist on several levels. For one, there was no organised and controlled market. Most of the mandis were illegal affairs run majorly by local toughs. Says S Jafar Naqvi, president, Indian Flowers and Ornamental Plants Welfare Association (iFlora), “It was complete chaos. These people would go to the farmers and promise to buy their entire produce. They would make deals and for the first few times, make good on their promises. Then, as the trust grew, they would take a huge advance and then disappear. Since the shops were mostly illegal, the farmers could not track these people down. They actually went from state to state with this scam.”
Since there was no regulation or control, they also muscled in on the prices that were being paid. So, on the one hand, the consumers, especially the large scale consumers like hotel chains and decorators, were having to pay through their noses while on the other hand, the farmer received a pittance, most of the profit eaten up by the middlemen.
The other problem was supply of the infrastructure. When it came to hybrid varieties of seeds, plastic sheets for green houses or other equipment, huge number of counterfeit companies were operating under the brand-names of international giants. As a result, a farmer would pay through the nose yet not get the desired quality. They would pay for seeds of plants guaranteed to produce flowers of a certain size and quality and get something quite different. Sheets that were supposed to last at least three years would not even last a season. It was only when they took the matters up with the companies that the counterfeit was realised.
Another major problem is the post harvest losses. In India, almost 40 per cent of the harvest is wasted every year due to lack of proper storage, transportation and a smooth procurement process. This amounts to a total loss of almost Rs 23,000 crores every year. The government is trying to bridge this gap by providing large amount of subsidies in infrastructure development. It is also a matter of bringing the farmer in contact with international brands that provide post-harvest solutions. Most of the floriculture farmers are able to afford the infrastructure, just that they are not aware of the available technology.
However, things began to change from 2005, with the government stepping in to regularise the industry. For one, the New Delhi mandi at Connaught Place has been completely legalised. Most of the vendors who originally used to sell flowers here were offered permanent stalls for a fee. Since these are shops that have been paid for, chances of the dealers evaporating into thin air are few.
To give the industry a boost, the government has also set up the Directorate of Floriculture Research under the Indian Agricultural Research Institute in 2010. Though it is, as of now housed in the AIRI complex, the processes to acquire and provide it its own campus is already in the pipelines. In all probability, it will be set up in Pune in the near future.
Another big factor has been contributions from the NGO iFlora. Every year, the organisation hosts the International Flora Expo in association with the Media Today Group, with the sponsorship and support of the Ministry of Agriculture, Agricultural and Processed Food Products Export Development Authority and several other state government bodies. This annual trade fair, the biggest in the industry has been a huge platform for both the farmers as well as companies that provide the raw materials and infrastructure.
“I was exposed to the exploitation of the farmers when I used to go to the New Delhi mandi for reporting. I realised that I had to do something for the farmers, had to eliminate the middle men. That was how iFlora was started. We held the first expo in 2005 in Bangalore. It was a huge success. We would see one farmer saying a particular dealer had been good to him while five others would start shouting that it was the same person who had ripped them off. The scam was laid bare and exposed. When we saw the positive response, we decided to shift the expo to Delhi,” says Naqvi, a founder member of iFlora, who also runs the Floriculture Today magazine.
Back in the early nineties, the government of India began to look at floriculture as a possible export option for the country. Floriculture had a lot of potential as it did not have a lot of constraints that is faced by agriculture in the country. For one, small land holdings, the biggest bane to efficient produce that India faces, does not affect this industry. Two to three acres of fields would be good enough to profitably enter the industry. It was capital intensive, but if sufficient numbers of entrepreneurs could be involved, it could be a big export. Several state bodies, like the Bengal National Chamber of Commerce, started outreach programmes to further give a boost to the industry.
It seemed to be working for a while as well, with a boost in both growth and exports in 2006, but that quickly fizzled out. The hurdles were many. Freight costs were extremely high and that made it difficult for the small and medium investors to operate. More importantly, the export industry works on very stringent standards of quality. Even a single specimen in an entire shipment could result in the rejection of the entire shipment. With a commodity as delicate and with as little shelf life as flowers, this posed a huge problem indeed.
While the exercise was not a success in the strict sense of the word, it did open up another possibility. There is a huge internal demand in the country as well. With greater exposure to the world, this demand is growing, not only in size but also in sophistication and variety. Given the large domestic market, it would be a viable option to take up floriculture in a big way for domestic consumption. Not only is there a huge domestic demand, the country is actually importing a good deal of flowers now.
A common north Indian spends more than a lakh on floral decorations during a marriage ceremony. The market, as is evident, is huge. The industry has grown in leaps and bounds in the past few years. “Approximately 2.4 lakh hectares are under floriculture cultivation in the country at present, with a turnover of more than Rs 1 lakh crores. You see, the return of investment is pretty high here. In even a half acre area, the farmer can turn a profit of four to five lakhs,” says Dr SC Pawar of the Union Ministry of Agriculture.
Here, too, there are hurdles. Problems exist on several levels. For one, there was no organised and controlled market. Most of the mandis were illegal affairs run majorly by local toughs. Says S Jafar Naqvi, president, Indian Flowers and Ornamental Plants Welfare Association (iFlora), “It was complete chaos. These people would go to the farmers and promise to buy their entire produce. They would make deals and for the first few times, make good on their promises. Then, as the trust grew, they would take a huge advance and then disappear. Since the shops were mostly illegal, the farmers could not track these people down. They actually went from state to state with this scam.”
Since there was no regulation or control, they also muscled in on the prices that were being paid. So, on the one hand, the consumers, especially the large scale consumers like hotel chains and decorators, were having to pay through their noses while on the other hand, the farmer received a pittance, most of the profit eaten up by the middlemen.
The other problem was supply of the infrastructure. When it came to hybrid varieties of seeds, plastic sheets for green houses or other equipment, huge number of counterfeit companies were operating under the brand-names of international giants. As a result, a farmer would pay through the nose yet not get the desired quality. They would pay for seeds of plants guaranteed to produce flowers of a certain size and quality and get something quite different. Sheets that were supposed to last at least three years would not even last a season. It was only when they took the matters up with the companies that the counterfeit was realised.
Another major problem is the post harvest losses. In India, almost 40 per cent of the harvest is wasted every year due to lack of proper storage, transportation and a smooth procurement process. This amounts to a total loss of almost Rs 23,000 crores every year. The government is trying to bridge this gap by providing large amount of subsidies in infrastructure development. It is also a matter of bringing the farmer in contact with international brands that provide post-harvest solutions. Most of the floriculture farmers are able to afford the infrastructure, just that they are not aware of the available technology.
However, things began to change from 2005, with the government stepping in to regularise the industry. For one, the New Delhi mandi at Connaught Place has been completely legalised. Most of the vendors who originally used to sell flowers here were offered permanent stalls for a fee. Since these are shops that have been paid for, chances of the dealers evaporating into thin air are few.
To give the industry a boost, the government has also set up the Directorate of Floriculture Research under the Indian Agricultural Research Institute in 2010. Though it is, as of now housed in the AIRI complex, the processes to acquire and provide it its own campus is already in the pipelines. In all probability, it will be set up in Pune in the near future.
Another big factor has been contributions from the NGO iFlora. Every year, the organisation hosts the International Flora Expo in association with the Media Today Group, with the sponsorship and support of the Ministry of Agriculture, Agricultural and Processed Food Products Export Development Authority and several other state government bodies. This annual trade fair, the biggest in the industry has been a huge platform for both the farmers as well as companies that provide the raw materials and infrastructure.
“I was exposed to the exploitation of the farmers when I used to go to the New Delhi mandi for reporting. I realised that I had to do something for the farmers, had to eliminate the middle men. That was how iFlora was started. We held the first expo in 2005 in Bangalore. It was a huge success. We would see one farmer saying a particular dealer had been good to him while five others would start shouting that it was the same person who had ripped them off. The scam was laid bare and exposed. When we saw the positive response, we decided to shift the expo to Delhi,” says Naqvi, a founder member of iFlora, who also runs the Floriculture Today magazine.
For More IIPM Info, Visit below mentioned IIPM articles
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
| BBA Management Education |
No comments:
Post a Comment