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Abid Hussain, MSc, Horticulture, abid.tnau@gmail.

com

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
Abid Hussain, MSc, Horticulture, abid.tnau@gmail.com

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
Abid Hussain, MSc, Horticulture, abid.tnau@gmail.com

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:
Abid Hussain, MSc, Horticulture, abid.tnau@gmail.com

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.
Abid Hussain, MSc, Horticulture, abid.tnau@gmail.com

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
Abid Hussain, MSc, Horticulture, abid.tnau@gmail.com

addressing these issues through various forums on a concerted basis


given its mandate to promote floriculture exports from India.
Abid Hussain