Rosiness, challenges and benefits of diversification

Horticulture 2020

Dr. Boidurjo Rick Mukhopadhyay International Award-Winning Development and Management Economist, can be reached at boidurjo@gmail.com

Prof Bibhas K Mukhopadhyay Professor of Management and Author of the book 'India's Economy: Under a Tinsel still Tough'

It is both timely and strategic that Nagaland has taken up the programme COVID-19 Horticulture Special Drive as a mission to work and make the state self-sufficient in horticulture crops for nutritional and economic benefits. This touring programme will cover all of the district headquarters and villages by respective district horticulture officers collecting necessary information and database for improvement of the horticulture sector in the state. The main focus of COVID-19 touring team is to create quick database/ mapping of fruit and vegetables growers in the state. In addition, it would create massive level of awareness and motivational programmes through print, electronic and social media on the need to grow more crops, and also aims to impart training to farmers and providing necessary inputs to farmers on time. Another objective of the team is to establish a strong network of market linkages for the surplus produces of farmers for efficient and timely distribution and better price.

As is well a known fact that dragon fruit is famous in Thailand, Vietnam, Israel and Sri Lanka. In India, commercial cultivation of this fruit is picking up and some farmers and fruit lovers in Nagaland have initiated its cultivation. The Dream Dragon Fruit Farm at Shitovi village in Dimapur district is the first farm where the exotic Dragon Fruit is produced and sold.

Exploring the potentialities of horticultural crops could boost the diversity of the production system, which in turn, promotes agricultural and ecological sustainability, while contributing to domestic food production. Still, while the potentialities are now realized and placed at a higher level, the implementation level has been remaining at a palpably low level for several developing economies.

Fact check: India is the second largest producer of vegetables and fruit in the world, with the UAE, the Netherlands, UK, Russia and Saudi Arabia being top destinations for export of fruit. India's horti-output in 2020 looks promising, including tomato, potato and onion, according to the government's first estimate. The output is estimated to go up to 313.35 million tonnes (mt) in 2019-20 from actual output of 310.74 mt last year.

India's Case: Hope soars!

The shipment of fresh fruits has witnessed an increase at a time when India's overall exports have declined. Overall exports have fallen but fruit exports have picked up, when India exported its first consignment of grapes to Canada and pomegranates to the US very recently; it offered a ray of hope for the otherwise dismal exports scenario of the country.

Grape exports had increased due to development of new markets in Canada, Australia and Russia along with a rise in production due to adoption of international certification like the Thompson and Global GAR which are among the key requirements for exporting grapes to European markets.

Demand for Indian mangoes, grapes, bananas and pomegranates have increased. This year India expects to export more to Japan, the US and Europe. Mauritius has also opened its market for Indian mangoes, while grape exports to Europe are up.

Warning: Slipper Road ahead!

Despite the latest trends observing increasing demand pattern in the agriculture sector major problems loom large, A) The lack of a broad raw material base in terms of the kinds and varieties of fruits and vegetables suitable in all respects for processing and their availability in commercial quantities at prices economical to the processing industry, B) The cost of the raw material is high, C) low productivity and poor quality of the produce as compared to the very high levels obtained in the advanced countries affect processing, and none of the processing units work to full capacity utilization.

Additionally, the produce taken up for processing is devoid of the quality attributes or characteristics required for processing. There is a lack of integrated marketing strategy to meet the raw material requirement of processing units, and also ensuring a sustainable export market for the processed products has been keenly experienced.

The feeble infrastructure for handling, transport, marketing and processing, horticulture as an industry has failed to register commendable growth in India. Particularly - transportation, road networks and freight and cargo facilities (the freight rates in India are reported to be higher than those prevalent in some other countries, the very fact that does very little to improve our competitiveness), cold storage facilities, etc coupled with inadequate post-harvest management which affect the produce and products. Poor and inconsistent quality of processed products and inadequate export promotion are also hindering the growth prospects. It is the residual rather than the fresh produce that is often taken up for processing, which has a bearing on quality.

As a matter of empirical fact, fruits and vegetables are generally constrained by poor price support, credit support and delivery system. Inadequate supply of power, water and research and development support exist as no less constraints. The quality of packaging also leaves much to be desired – simply not market-oriented – as importing countries demand specific packaging for each produce and the use of biodegradable materials resulting in high cost of packaging.

The $70-billion Indian food processing industry is dominated by small and medium enterprises, which do not have the capacity to undertake large-scale processing of fruits and vegetables.

During the peak production period, the gap between the demand and supply of cold storage capacity was huge. As per National Centre for Cold Chain Development, "The biggest wastage happens during the transportation of horticulture products from the farm gate to mandis and thereafter. The answer lies in minimizing the wastage that happens during transportation." From a farm gate to a consumer, a horticulture product passes through seven different distribution channels, and in every step, there is a loss of 5-7 per cent. Processing losses also abound.

The Road Ahead

The global market for these products is tremendous and if systematically tapped there lies immense scope ahead, especially for the least developing economies as the latter virtually depend on a handful of agri-commodities to earn foreign exchange. Both the absolute and comparative advantages must be fully reaped [e.g. India produce grapes twice a year – a rare advantage and gift of nature which other leading producers do not have].

Especially, trade in fruit and vegetable products has been among the most dynamic areas of international agricultural trade, stimulated by rising incomes and growing consumer interest in product variety, freshness, convenience, plus year-round availability. Undoubtedly, advances in production, post-harvest handling, processing and logistical technologies — coupled with increased levels of international investment — have played a facilitating role.

These commodity markets, de facto, exhibit a complex political economy – domestically and internationally. Undoubtedly, the arcane nature of many policy interventions in these commodity markets and the many heterogeneous interests exacerbate this complexity. It must be agreed upon that identifying superior policy options is not difficult, but that the feasibility of reform depends on the power of vested interests and the ability of governments to identify tradeoffs and possible linkages that will allow them to pursue multiple goals (food security, income transfers, expansion of domestic value addition etc.) more efficiently and prudently.

Finally, for developing countries, trade in these products has been attractive in the face of highly volatile or declining long-term trends in the prices for many traditional export products. This is also a fact simultaneously that in spite of the fact that many developing country suppliers have entered the field (e.g., Venezuela, Bangladesh in mango market), relatively fewer have achieved significant and sustained success, which, adequately reflects the fact that the industry is fiercely competitive while rapidly changing.