1 Introduction1 Overview of Global ... - KERALA …keralaagriculture.gov.in/htmle/aez/Aez...

AEZ Kerala Cebeco India Private Limited Your Partner in Agri-business

TABLE OF CONTENTS

1 Introduction............................................................................................. 1

1.1 Background ........................................................................................ 1 1.2 The objectives of the study.................................................................... 1 1.3 Approach and Methodology ................................................................ 2 1.4 Structure of the study ........................................................................... 4

2 Overview of Global Production and Trade of Horticulture Produce........... 5

2.1 Global production of Fruits.................................................................... 5 2.2 Global trade of Fruits............................................................................ 7 2.3 Global production of Vegetables .......................................................... 9 2.4 Global trade of Vegetables ................................................................ 10 2.5 Global production of Floriculture products............................................ 11 2.6 Global trade of Floriculture products.................................................... 13

3 Overview of India’s production of horticulture produce ......................... 17

3.1 Fruits................................................................................................. 17 3.2 Vegetables ....................................................................................... 18 3.3 India’s Exports ................................................................................... 19 3.4 Flowers............................................................................................. 21

4 Agriculture in Kerala.............................................................................. 23

4.1 Agro-soil Zones of Kerala..................................................................... 23 4.2 Land use Pattern ............................................................................... 25 4.3 Role of State Government in Development of Horticulture ...................... 26 4.4 Kerala Horticulture Development Programme (KHDP)............................. 27

4.4.1 Features ..................................................................................................................................................27 4.4.2 Activities .................................................................................................................................................27 4.4.3 Project outlay and financing pattern......................................................................................28 4.4.4 Self Help Groups.................................................................................................................................28 4.4.5 Seed processing.................................................................................................................................29 4.4.6 Technology development through farmer participation..............................................29 4.4.7 Credit facilities.....................................................................................................................................29 4.4.8 Training....................................................................................................................................................30 4.4.9 Marketing arrangement for vegetables and fruits............................................................30 4.4.10 Market information centre............................................................................................................30 4.4.11 Farmers field centres ........................................................................................................................30 4.4.12 Fruit processing...................................................................................................................................31

4.5 Kerala State Horticulture products Development Corporation Ltd. (HORTICORP).............................................................................................. 31

4.5.1 A brief History.......................................................................................................................................31 4.5.2 Functional Areas ................................................................................................................................32 4.5.3 Achievements .....................................................................................................................................33 4.5.4 Products..................................................................................................................................................33 4.5.5 Future activities proposed.............................................................................................................33 4.5.6 Assistance from government .......................................................................................................34

4.6 State Agriculture Department.............................................................. 34 4.7 Kerala Agro Industries Corporation Ltd. ................................................. 34 4.8 Other Agencies ................................................................................. 35 4.9 Kerala Agricultural Markets Project (KAMP) ........................................... 35


4.9.1 Physical progress................................................................................................................................35 4.9.2 Operational progress .......................................................................................................................36

4.10 Other infrastructural facilities ............................................................ 36 4.11 Credit availability in the state ........................................................... 36

5 Kerala’s Production and Exports of Horticultural Crops........................... 38

5.1 Production of fruits............................................................................. 38 5.2 Vegetables production in Kerala ......................................................... 39 5.3 Causes of low yield in the state............................................................ 40 5.4 Floriculture in Kerala ........................................................................... 42 5.5 Marketing of horticulture produce in Kerala .......................................... 43 5.6 Supply Chain..................................................................................... 44

5.6.1 Farmers....................................................................................................................................................45 5.6.2 Self Help Group / Sangams / Cooperatives.........................................................................45 5.6.3 Pre-harvest contractors ..................................................................................................................46 5.6.4 Village merchants.............................................................................................................................46 5.6.5 Commission agents...........................................................................................................................46 5.6.6 Wholesale merchants......................................................................................................................46 5.6.7 Exporters .................................................................................................................................................46 5.6.8 Retail traders / hawkers ..................................................................................................................47 5.6.9 Co-operative societies....................................................................................................................47 5.6.10 Public sector organizations ...........................................................................................................47

5.7 Pattern of arrival and price of fruits and vegetables ............................... 47 5.8 Current status and prospects of exports of horticultural products from Kerala 51 5.9 Export of Floricultural Products............................................................. 53 5.10 Present constraints and potential for growth....................................... 53 5.11 New Product and Markets................................................................ 57

5.11.1 Cut foliage............................................................................................................................................57 5.11.2 Banana wafers....................................................................................................................................57 5.11.3 Okra..........................................................................................................................................................58

6 SWOT Analysis....................................................................................... 59

6.1 Strengths .......................................................................................... 59 6.2 Weaknesses ...................................................................................... 59 6.3 Opportunities .................................................................................... 59 6.4 Threats............................................................................................. 59

7 Agri Export Zone in Kerala ..................................................................... 60

7.1 Agri Export Zone Scheme.................................................................... 60 7.1.1 The Concept of Agri Export Zone ..............................................................................................60

7.2 Measures envisaged for promoting exports from such Zone .................... 60 7.2.1 Financial Assistance..........................................................................................................................60 7.2.2 Fiscal Incentives..................................................................................................................................61 7.2.3 Monetary Incentives.........................................................................................................................61

7.3 Operation of the Concept .................................................................. 61 7.4 Need for AEZ..................................................................................... 62 7.5 Selection of products ......................................................................... 63 7.6 Project area ...................................................................................... 64 7.7 Identification of Export Markets............................................................ 65 7.8 Export targets for the state.................................................................. 66


8 Interventions, Investments and Sources of funds .................................... 67

8.1 Approach to accelerate growth of Exports........................................... 67 8.1.1 Area expansion under exportable horticultural crops ....................................................67 8.1.2 Productivity and quality enhancement measures ...........................................................69 8.1.3 Development of appropriate post-harvest technology................................................72 8.1.4 Export Promotion................................................................................................................................74 8.1.5 Research and Development (R&D) .........................................................................................75 8.1.6 Other support measures.................................................................................................................75

8.2 Funding Mechanism........................................................................... 76

9 Concept of Agri Export Zone in Kerala ................................................... 80

9.1 Plan of Action, Deadlines and Administrative Structure........................... 81 9.2 Agencies involved in state level........................................................... 87

9.2.1 Department of agriculture............................................................................................................87 9.2.2 VFPCK......................................................................................................................................................88 9.2.3 Kerala Agro Industries Corporation...........................................................................................89 9.2.4 Kerala State Electricity Board......................................................................................................89 9.2.5 Department of Sales Tax................................................................................................................89 9.2.6 Kerala Agricultural University........................................................................................................89 9.2.7 State level Financial Institutions and Banks ...........................................................................89 9.2.8 Central Tuber Crops Research Institute..................................................................................90 9.2.9 Pineapple Research Centre.........................................................................................................90 9.2.10 Banana Research Station..............................................................................................................90 9.2.11 R&D on post harvest management of pineapple ............................................................91

9.3 Agencies involved - Central Government ............................................. 91 9.3.1 Agricultural and Processed Food Products Development Authority (APEDA)....91 9.3.2 Department of Food Processing Industries (DFPI)..............................................................91 9.3.3 National Horticulture Board..........................................................................................................92 9.3.4 Ministry of Commerce.....................................................................................................................92 9.3.5 NCDC.......................................................................................................................................................92 9.3.6 Indian Institute of Packaging.......................................................................................................92

10 Socio-Economic Benefits....................................................................... 93

10.1 Increased exports and benefits to exporters....................................... 93 10.2 Profits to farmers from production enhancements............................... 93 10.3 Reduction in handling losses............................................................. 93 10.4 Creation of employment ................................................................. 94 10.5 Income from EEC markets................................................................ 94 10.6 The proposed soil & leaf analysis centre ............................................. 94 10.7 Export of value added products ....................................................... 94 10.8 Benefits from ‘Commercial Horticulture farms’ .................................... 94 10.9 Cost Benefit of the project ............................................................... 94

LIST OF TABLES

TABLE 1 M AJOR FRUIT PRODUCING COUNTRIES OF THE WORLD ( IN 000’MT) .................................................................5 TABLE 2 C OUNTRY-WISE PERCENT SHARE OF FRUITS PRODUCTION (2001)........................................................................5 TABLE 3 P RODUCTION, AREA AND PRODUCTIVITY OF MAJOR BANANA PRODUCING COUNTRIES OF THE WORLD IN

2001.................................................................................................................................................................................6 TABLE 4 M AJOR PINEAPPLE PRODUCING COUNTRIES OF THE WORLD...............................................................................6 TABLE 5 M AJOR FRESH FRUIT IMPORTING COUNTRIES OF THE WORLD IN YEAR 2000 ( VALUE IN 000’US$)..................7 TABLE 6 M AJOR FRESH FRUIT EXPORTING COUNTRIES OF THE WORLD IN YEAR 2000 ( VALUE IN 000’US$)..................7


TABLE 7 B ANANA EXPORTS ......................................................................................................................................................8 TABLE 8 B ANANA IMPORTS ......................................................................................................................................................8 TABLE 9 P INEAPPLE EXPORTS ...................................................................................................................................................8 TABLE 10 P INEAPPLE IMPORTS.................................................................................................................................................9 TABLE 11 MAJOR VEGETABLE PRODUCING COUNTRIES OF THE WORLD ( IN 000’ MT) ...................................................9 TABLE 12 COUNTRY-WISE PERCENT SHARE OF VEGETABLE PRODUCTION (1999-00)................................................... 10 TABLE 13 MAJOR CASSAVA PRODUCI NG COUNTRIES ..................................................................................................... 10 TABLE 14 MAJOR FRESH VEGETABLE IMPORTING COUNTRIES OF WORLD IN 2000 (VALUE IN 000’US$).................. 11 TABLE 15 MAJOR FRESH VEGETABLE EXPORTING COUNTRIES OF WORLD IN 2000 (VALUE IN 000’US$).................. 11 TABLE 16 MAJOR SUPPLIERS OF FLORICULTURE PRODUCE ................................................................................................ 12 TABLE 17 MAJOR CONSUMER OF FLORICULTURE PRODUCE............................................................................................. 12 TABLE 18 W ORLD TRADE IN FLORICULTURE (1999)........................................................................................................... 13 TABLE 19 GROWTH RATE OF INTERNATIONAL TRADE I N CUT FOLIAGE FROM T HE YEAR 1992 TO 1999( IN 000’US$)13 TABLE 20 MAJOR EXPORTERS OF CUT FLOWERS .................................................................................................................14 TABLE 21 MAJOR IMPORTERS OF CUT FLOWERS .................................................................................................................15 TABLE 22 EXPORT DESTINATIONS FOR FLORICULTURE PRODUCTS (FROM THE NETHERLANDS INCLUDING RE-EXPORT ) -

YEAR 1999................................................................................................................................................................... 15 TABLE 23 S HARE OF DIFFERENT FL OWERS IN THE EUROPEAN MARKET ............................................................................... 15 TABLE 24 THE TURNOVER OF TOP 10 CUT FLOWERS AT DUTCH AUCTION (VBA, 1999)............................................. 16 TABLE 25 ALL INDIA AREA , PRODUCTION AND PRODUCTIVITY OF FRUITS ...................................................................... 17 TABLE 26 ALL INDIA AREA , PRODUCTION AND PRODUCTIVITY OF BANANA................................................................. 17 TABLE 27 ALL INDIA AREA , PRODUCTION AND PRODUCTIVITY OF PINEAPPLE.............................................................. 17 TABLE 28 S TATE WISE AREA, PRODUCTION AND PRODU CTIVITY OF BANANA................................................................. 18 TABLE 29 S TATE WISE AREA, PRODUCTION AND PRODU CTIVITY OF PINEAPPLE............................................................... 18 TABLE 30 ALL INDIA AREA , PRODUCTION AND PRODUCTIVITY OF VEGETABLES........................................................... 19 TABLE 31 ALL INDIA AREA , PRODUCTION AND PRODUCTIVITY OF TAPIOCA ................................................................ 19 TABLE 32 S TATE WISE AREA, PRODUCTION AND PRODU CTIVITY OF TAPIOCA................................................................. 19 TABLE 33 EXPORTS OF FRESH FRUITS AND VEGETABLES FR OM INDIA (2000-2001) .......................................................20 TABLE 34 DESTINATION OF INDIA’S EXPORTS OF FRESH VEGETABLES............................................................................... 20 TABLE 35 ALL INDIA AREA , PRODUCTION AND PRODUCTIVITY OF FLOWERS................................................................. 21 TABLE 36 EXPORT OF FLORICULTURE PRODUCTS FROM INDIA (1999-2000)................................................................. 21 TABLE 37 EXPORT OF CUT FOLIAGE FROM INDIA (V ALUE IN 000’ R S)............................................................................ 22 TABLE 38 CLASSIFICATION BASED ON THE PHYSIOGRAPHICAL FEATURES OF THE STATE.................................................23 TABLE 39 AGRO-SOIL ZONES OF KERALA........................................................................................................................... 24 TABLE 40 L AND USE PATTERN IN KERALA (AREA IN HA) ....................................................................................................25 TABLE 41 D ISTRIBUTION OF OPERATIONAL LAND HOLDINGS IN KERALA..........................................................................26 TABLE 42FINANCING PATTERN ............................................................................................................................................. 28 TABLE 43 NEW MARKETS.......................................................................................................................................................36 TABLE 44 AREA UNDER FRESH FRUIT PRODUCTION (2000-01) ........................................................................................ 38 TABLE 45 QUANTITY OF FRESH FRU IT PRODUCTION (2000-01) (IN MTS) ....................................................................... 39 TABLE 46AREA UNDER VEGETABLE PRODUCTION (2000-01) (A REA IN HECTARES)..................................................... 39 TABLE 47 QUANTITY OF VEGETABLE PRODUCTION (IN MT).............................................................................................. 40 TABLE 48 PRODUCTIVITY OF KEY CROPS IN KERALA VIS-À-VIS BEST IN INDIA AND WORLD (MT / HA).......................41 TABLE 49 ESTIMATED DISPATCHES OF PINEAPPLE FROM KERALA...................................................................................... 44 T ABLE 50 M ONTHLY PRICE AND ARRIVAL OF SOME FRUITS & VEGETABLES IN T HIRUVANTHAPURAM WHOLESALE

MARKET , YEAR 2001................................................................................................................................................... 48 T ABLE 51 COMPARISON OF PRICES OF SOME F RUITS AND VEGETABLES BETWEEN THIRUVANATHAPURAM AND

CHENNAI MARKET (YEAR 2000) ................................................................................................................................ 49 TABLE 52 M ONTHLY AVERAGE PRICE S OF PINEAPPLE ( RIPE) FOR THE LAST THREE YEARS IN VAZHAKULAM MARKET OF

ERNAKULAM DISTRICT (PRICE - RS . / KG) .................................................................................................................51 TABLE 53 WHOLESALE PRICE (RS./KG) OF TAPIOCA IN THRISSUR MARKET (JAN. 1999- SEPT . 2002)..................... 51 TABLE 54 EXPORTS OF FRESH FRUITS & VEGETABLES FROM THIRUVANATHAPURAM AIRPORT........................................ 52 TABLE 55 ESTIMATES OF INDIAN MIGRANTS IN THE GULF REGION, 1975-1999........................................................... 54 TABLE 56 PERCENTAGE OF NRIS IN THE TOTAL POPULATION OF MAIN ARAB COUNTRIES IN YEAR 2000................... 54 TABLE 57 L ANDED PRICES OF BANANA IN MAJOR MIDDLE EAST COUNTRIES FROM VARIOUS COUNTRIES OF ORIGIN55 TABLE 58 A IRFREIGHT CHARGES FROM THIRUVANTHAPURAM AIRPORT TO MAJOR EXPORT DESTINATIONS................ 56


TABLE 59 EXPORTS T O GULF COUNTRIES (QUANTITY IN MT, VALUE IN LACS RS.) ........................................................ 65 TABLE 60 KERALA EXPORT PROJECTIONS ........................................................................................................................... 66 TABLE 61 COVERAGE OF AREA AND FARMERS UNDER THE PROPOSED PROJECT .......................................................... 67 TABLE 62 PROJECT COST AND SOURCES OF FUNDS........................................................................................................... 77 TABLE 63 S UMMARY OF SOURCE WIS E FUNDS REQUIREMENT ............................................................................................ 79 TABLE 64 ESTIMATED PHASING OF FUNDS (RS . IN LACS )................................................................................................... 79 TABLE 65 INCREASE IN EXPORTS & BENEFITS TO EXPORTER S (RS . IN CRORES )................................................................. 93 TABLE 66S UMMARY OF VARIOUS ECONOMIC BENEFITS OF THE PROJECT ........................................................................ 95

LIST OF PERT CHARTS PERT CHART 1 P ROJECT IMPLEMENTATION .......................................................................................................................... 83 PERT CHART 2 D EVELOPMENT OF ORGANISATION AND S YSTEMS................................................................................... 85 ANNEXURES ANNEXURE- I CONTACT L IST …………………..……………..………………………………………….…,,…..… I ANNEXURE- II CROP PRODUCTION PRACTICES AND PLANT PROTECTION MEASU RES .........……..…………..…..… IV ANNEXURE- III DETAILED WORKING OF ECONOMIC INDICATORS (RS . IN LACS) ……………..………….………. XXII

AEZ Kerala 1 Cebeco India Private Limited Your Partner in Agri-business

1 INTRODUCTION

1.1 Background

The Government of India, as a part of the E xim policy announced on 1st April, 2001,

has proposed a bold new initiative for development of Agri Export Zones (AEZs) for

boosting exports of agricultural products in different states. The concept envisages

that the State Government would identify resource specific Agri Export Zones for

end-to-end development for export of specific products from a geographically

contiguous area.

Agri Export Zones (AEZs) are based on a comprehensive ‘product to export market’

approach which encompasses a market driven method of resource identification,

location selection, strengthening of the production function (pre & post-harvest

treatment), infrastructure & logistics, processing and packaging. This concept will

not only result into the ultimate goal of increasing the export earnings, but would

have several benefits like, improvement of agricultural output, productivity, quality,

reduction in post-harvest losses, up-gradation of technology, farmers’ skills and

income. This concept will also result into development of a internationally

competitive production base, increased private investments leading to increased

employment and overall economic development.

In order to take advantage of the above policy, the Secretary (Agriculture)

Department of Agriculture, Government of Kerala commissioned Cebeco India to

conduct a comprehensive study on feasibility of setting-up AEZ in Kerala for

vegetables, fruits and flowers.

Cebeco India is a leading consultancy company in the area of Agri -business in

India and has been associated with APEDA and the Ministry of Commerce to

prepare the ‘Pilot Projects’ for Agri Export Zones and has done several such

assignments for various other states.

1.2 The objectives of the study

In the state of Kerala a variety of horticultural products viz. fruits, vegetables and

flowers are grown. The broad objective of the study is to prepare a detailed report

on setting-up of Agri Export Zones for the selected fruits, vegetables and flowers in

Kerala. The specific issues to be covered are:


§ World market overview (world trade, existing and potential markets, distribution

channels, requirements of quality, import regulations)

§ Indian market and industry overview (technology evaluation, installed capacity,

capacity utilization, cost structure, viability issues)

§ Backward linkages (availability of raw materials, pre-harvest practices, R&D

requirements for the sector, feasibility of intermediate processing at farm level,

treatment of raw material before processing, packaging etc)

§ Infrastructure and logistics - strengths and weaknesses

§ Constraints and support required.

The scope of work for this study is detailed hereinafter:

1.3 Approach and Methodology

The overall approach used was to document all the relevant information, diagnose

and develop the project. The study of this kind having a vast scope of work requires

collection of lot of information primary as well as secondary; a contact list was

generated for collection of primary information. The following categories were

contacted.

§ Farmers

§ Fruits and vegetables markets – Urban, Rural and New EU funded

§ Exporters’ Associations and Individual Exporters

§ Processors

§ Commission Agents/Traders

§ Government officials

§ State Government Sponsored Projects associated with promoting horticulture in

Kerala i.e. VFPCK (KHDP), HORTICORP

§ Central Agencies – APEDA, NHB, MFPI, MOC

§ Organizations associated with consultancy & financing like AFC, NABARD

§ Relevant academic and R&D Institutions – KAU, CTCRI, Pineapple Research

Institute, The list of field contacts is given in Annex 1. Information was collected using a

checklist designed for collection of specific information for each contact.

For the collection of secondary information extensive desk research was done using

internet, several books, journals, magazines and published materials was scanned.


From Department of Agriculture in Kerala, a lot of published information was

collected.

The list of documents / reports made available by Department of Agriculture and

other agencies in Kerala is given below:

§ Status of Agriculture in Kerala – 1998

§ Project preparation and monitoring all Department of Agriculture

§ Data book on Agriculture 2000 by State Planning Board

§ Farm Guide 2002 – Farm Information Bureau

§ Economic Review 2001 by State Planning Board

§ A study of vegetables and fruits marketing in Kerala by Agricultural Finance

Corporation Ltd.

§ Report on cost of cultivation of important crops in Kerala 1997-98 by Department

of Economics and Statistics

§ Agricultural Statistics 2000-2001

§ Department of Economics & Statistics

§ Assessment of the scope for floriculture development in Kerala by Agricultural

Finance Corporation Ltd.

§ Package of practices for crops by Kerala Agricultural University

§ Proceeding of the Seminar on Kerala Floriculture 2020 by College of Horticulture,

Kerala Agri University.

§ Poten tial linked credit plan 2002-2007 for all the districts of Kerala by National

Bank for Agriculture and Rural Development. Besides use of above mentioned reports and documents, Cebeco India’s in-house

database was used for supplementing the information collected from field and

secondary sources. Wherever, information gaps were observed; the information

was sourced from Cebeco India’s associates in India and abroad.

The information, thus collected was analyzed and a multidisciplinary team

deployed for this study discussed key findings, which form the basis of

recommendations in this report. The draft report was sent to Department of

Agriculture, Government of Kerala for comments and a presentation was also

made to the Honorable Minister for Agriculture and coir and concern senior officers

of Government of Kerala. While finalizing the report the comments and suggestions

received have been taken into consideration.


The detailed framework of AEZs has been recommended keeping in view

interventions required for setting-up of AEZs in Kerala. The cost estimates have been

arrived at keeping in view local conditions, Cebeco India’s experience in similar

studies and budgetary quotes from the suppliers & contractors.

1.4 Structure of the study This study report incorporates findings from the field investigations and studies

undertaken for the purpose of evolving an integrated approach for “product to

export markets for the selected products”. The study focuses on a market driven

method of resource identification, location selection, strengthening of the

production function (pre and post harvest treatment), infrastructure and logistics,

processing and packaging by setting up of Agri Export Zone. The main focus in this

study is to exclusively explore some products in Kerala under Agri export concept

and integrate various activities. Thus, report essentially deals with different major

components, which constitute different sections of the report.

Firstly, for trend analysis, the current status of production and trade of horticulture

produce in world have been incorporated. Likewise an in-depth analysis of Indian

scenario has also been undertaken. With a view to identify the constraints/weak

links in the chain, the two subsequent sections are added regarding state of Kerala

viz . present agriculture scenario and exports. A qualitative analysis is carried out

under the SWOT analysis section. An analysis of competitiveness of selected

products from AEZ has been carried out, leading to recommendations of steps

required to achieve export promotion targets, covering all aspects of growing (pre

& post harvest), processing, packaging, storage and transportation etc. in line with

the requirements of international markets. A clear picture of fund inflow has been

described under the section intervention, investment and sources of funds. Role of

different government and non -government bodies has been defined clearly for

proper implement of AEZ scheme under the implementation plan. And lastly, the

Socio -economic benefits associated with the project have also been evaluated,

and a cost benefit analysis of the project has also been presented.


2 OVERVIEW OF GLOBAL PRODUCTION AND TRADE OF HORTICULTURE PRODUCE

The world production of horticulture produce is continuously increasing due to the

increa se in its global demand. Since the trade of the horticulture produce is

becoming more and more organized, so the trend is shifting towards market-

oriented production in developing countries also In this chapter, important statistics

related to global production and trade of fruits, vegetables and floriculture is

presented:

2.1 Global production of Fruits

The global production of fruits has shown very little growth during last four years. The

present level of world fruit production is 466.3 lac MT. China is the largest producer

of fruits in world, producing 67.7 lac MT followed by India which accounts for 48.5

lac MT. The major list of fruit producing countries in the world along with total

production of fruits is given in table 1.

Table 1 Major fruit producing countries of the world (In 000’MT) Country 1997 1998 1999 2000 2001

World 442,459 433,764 457,797 466,414 466,340

China 53,325 56,686 64,825 64,613 67,766

India 40,912 41,607 45,758 48,570 48,570

Brazil 36,778 34,190 37,0 9 3 33,118 31,731

USA 32,335 31,506 28,064 32,600 29,862

Italy 15,633 17,046 18,426 17,880 18,377

Spain 15,425 14,024 15,421 16,166 14,834

Mexico 12,594 11,730 12,513 13,290 13,236

France 11,019 10,340 11,700 11,155 11,169

Turkey 9,950 10,479 10,624 10,539 10,659

Philippines 9,791 9,156 10,302 10,597 11,053

Others 204,693 196,995 203,065 207,881 209,077

Source: NHB database 2000 and 2001

Table 2 Country-wise percent share of fruits production (2001)

Country % share

China 15 India 10 Brazil 7 USA 6 Italy 4 Spain 3 Mexico 3 France 2 Turkey 2 Philippines 2 Others 46

Source: NHB database 2000 and 2001

Major Fruit producing countries of world

Mexico 3%

Turkey 2%

Philippines 2%

France 2%

Italy 4% Spain

3%

USA6%Brazil

7%

China 15%

India 10%

others46%


It can be seen from the table 2 that India is a major producer of fruits accounting

for 10% of global production and ranks second after China.

Table 3 Production, Area and productivity of Major Banana producing countries of the world in 2001

Area in 000 HA Production in 000 MT Productivity in MT/HA Destination

1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001

World 3900 3873 4020 4144 4202 60529 58211 64422 67545 68651 15.52 15.03 16.03 16.30 16.34

India 447 446 464 490 490 12642 12425 15100 16000 16000 28.28 27.86 32.54 32.65 32.65

Ecuador 211 207 194 194 229 7494 5463 6392 6477 7561 35.48 26.40 33.02 33.34 33.02

Brazil 533 518 521 521 514 5412 5322 5528 6079 5744 10.16 10.27 10.61 11.66 11.18

China 189 187 212 258 259 3097 3734 4407 5140 5393 16.38 19.94 20.82 19.90 20.82

Philippines 338 328 372 383 400 3774 3493 4571 4930 5061 11.16 10.66 12.28 12.86 12.65

Indonesia 264 258 270 285 285 3057 3177 3376 3747 3600 11.59 12.29 12.51 13.15 12.63

Costa Rica 4 9 4 7 4 9 4 8 5 0 2300 2500 2420 2250 2270 46.76 53.23 49.56 46.80 45.40

Mexico 6 8 6 6 7 5 7 2 7 5 1714 1526 1738 1863 1977 25.29 22.97 23.06 25.90 26.37

Thailand 130 134 134 134 134 1700 1720 1720 1720 1720 13.08 12.84 12.84 12.84 12.84

Burundi 295 295 295 295 300 1543 1399 1511 1514 1549 5.23 4.74 5.12 5.13 5.16

Source: www.fao.org

Amongst fruits, banana is a major crop globally. Interestingly, India has emerged as

a top banana producing country accounting for about 24% of global production

and in terms of productivity too it ranks quite high. Therefore, Banana holds a lot of

potential to be tapped by Indian entrepreneurs in the global market.

Table 4 Major Pineapple producing countries of the world


1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001

World 676 692 719 752 766 1244812150 136051344913739 18.4017.56 18.92 17.87 17.93

Thailand 8 5 8 2 9 7 9 7 9 7 2083 1786 2372 2287 2300 24.6021.82 24.43 23.51 23.64

Philippines 4 0 3 8 3 7 4 3 4 5 163 8 1489 1530 1525 1572 40.5039.47 40.88 35.09 34.93

Brazil 5 4 5 5 5 7 5 6 5 9 1073 1113 1477 1293 1442 20.0420.24 25.95 23.19 24.31

China 3 7 3 7 4 7 5 3 5 8 828 961 1231 1214 1284 22.5625.83 26.03 23.12 22.25

India 8 2 8 2 7 4 8 0 8 0 1250 1280 1006 1100 1100 15.2 4 15.61 13.56 13.75 13.75

Nigeria 110 115 115 115 115 830 857 881 881 881 7.55 7.45 7.66 7.66 7.66

Mexico 9 1 2 1 2 1 2 1 3 391 481 504 522 535 43.0041.78 43.65 43.35 42.80

Costa Rica 9 9 1 0 1 3 1 2 355 400 445 475 475 38.7143.01 43.84 38.00 39.58

Colombia 5 5 9 8 9 313 116 388 338 360 58.1020.12 41.31 39.98 40.00

Viet Nam 2 5 2 8 3 6 3 7 37, 199 243 255 291 312 7.72 8.46 7.06 7.98 8.33

Source: www.fao.org


In case of pineapple India ranks fifth in terms of production, the major producing

countries are Thailand, Philippines and Brazil. It can be seen from the table 4 that the

productivity of pineapple is very low in India as compared to countries like Mexico

and Philippines.

2.2 Global trade of Fruits Table 5 Major fresh fruit importing countries of the world in year 2000 (value in 000’US$) Countries Import Countries Import

World 649,451 Canada 24,588 China, Macao SAR 119,499 Italy 18,264 France 78,070 Japan 15,590 United States of America 49,021 United Kingdom 14,755 Germany 42,790 Indonesia 13,746 Netherlands 30,575 United Arab Emirates 13,400 Russian Federation 29,507 India 197 Namibia 25,000

Source: FAO, 2000 Source: FAO, 2000 Table 6 Major fresh fruit exporting countries of the world in year 2000 (value in 000’US$) Countries Export

World 495,960 Thailand 109,516 Spain 78,930 China 72,587 Tajikistan 32,700 France 21,771 Netherlands 20,221 United States of America 18,454 China 17,705 Vie tnam 12,400 Colombia 11,160 India 8,280 Belgium 7,297 Pakistan 7,135 Source: FAO, 2000 The volume of international trade of fruits is substantial. The major exporting countries

are Thailand, Spain and China. India’s share in the trade is only about 2.5% and it

ranks twelfth. Even though India is top producer of banana it doesn’t find place

among the top ten Banana exporting countries as export volumes are negligible.

Same is case with pineapple. The details are given in tables 7 to table 10:


Table 7 Banana Exports

Qty. in MT Value (1000 $) Destination 1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 World 13,910,315 14,514,06413,909,31914,060,99014,222,881 4,844,9925,051,4134,893,2134,675,3194,306,265Ecuador 3,8 66,079 4,462,099 3,889,2173,966,126 3,993,968 964,119 1,311,6391,058,729 945,560 809,364

Costa Rica 2,102,830 2,025,549 2,288,4972,259,126 2,096,465 631,853 588,029 684,707 641,625 553,202

Colombia 1,476,523 1,586,029 1,508,4871,584,000 1,710,949 459 ,159 503,196 476,102 478,000 480,620

Philippines 1,252,196 1,143,336 1,149,5521,319,632 1,599,920 236,267 216,556 217,040 240,703 291,651

Guatemala 611,183 659,392 794,240 623,583 801,514 155,189 151,064 191,372 135,351 167,451

Panama 631,953 608,208 462,415 593,364 489,284 184,031 179,841 138,748 182,253 148,328

USA 408,741 418,823 416,520 418,813 400,188 195,167 189,237 177,013 161,106 157,410

Côte d’Ivoire 194,235 200,616 206,060 241,580 243,032 87,435 68,633 68,966 76,723 68,470

France 149,842 2 49,325 250,205 250,024 241,679 108,626 139,553 174,377 144,484 117,861Source: www.fao.org

Table 8 Banana Imports

Qty. in MT Value (1000 $) Destination

1996 1997 1998 1999 2000 1996 1997 1998 1999 2000

World 13,602,42213,567,95513,261,263 14,066,38314,268,5627,062,6526,615,3526,596,7556,573,679 6,052,707

USA 3,776,992 3,772,694 3,913,314 4,295,2914,030,6361,368,4291,388,8531,387,1941,389,355 1,317,485

Germany 1,197,779 1,113,889 9 8 7,354 994,3321,114,505 897,479 742,716 686,452 689,414 621,557

Japan 818,712 885,140 864,854 983,2041,078,655 433,219 435,754 469,913 547,846 551,287

U K 672,413 634,285 755,098 730,478 742,933 502,881 484,041 577,874 534,273 483,086

Italy 543,213 515 ,345 524,852 601,980 604,774 384,682 369,439 376,793 346,032 315,580

China 512,859 547,042 539,133 431,737 593,533 140,907 145,771 163,151 140,506 169,296

Russian Fed. 308,616 660,681 477,114 377,888 502,952 118,605 153,624 150,257 151,248 175,054

Canad a 408,209 417,597 416,436 419,474 398,616 174,597 168,096 161,246 149,196 142,269

France 604,912 334,268 310,228 333,387 340,676 339,435 231,785 223,259 200,823 164,265

Source: www.fao.org Table 9 Pineapple Exports


1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 World 839,152 901,585 860,4721,054,320 1,039,209346,072 369,308 377,037 438,355 414,995Costa Rica 179,451 250,100 271,272 304,418 322,453 6 8,932 102,848 114,968 128,234 121,550Côte d’Ivoire 170,406 175,064 149,356 201,787 187,836 57,063 49,547 37,250 54,549 47,083Philippines 143,994 144,802 117,436 127,682 135,484 24,514 27,189 20,841 22,814 24,794France 77,181 85,445 75,560 108,172 77,3 7 1 55,467 59,753 55,494 63,926 53,737Belgium 0 0 0 0 64,419 0 0 0 0 44,210Honduras 30,636 22,949 43,100 43,500 41,511 8,744 5,645 18,500 19,200 15,774USA 17,792 23,788 25,063 31,521 40,064 10,936 15,585 18,202 22,128 28,017Ghana 26,750 25,402 21,300 21,849 26,173 9,051 9,998 11,676 11,593 11,514Mexico 10,198 18,337 19,827 19,612 24,409 3,362 4,596 5,961 7,032 8,297Netherlands 24,202 20,082 14,447 23,456 19,171 23,278 19,524 14,701 19,349 15,889Source: www.fao.org


Table 10 Pineapple Imports


1996 1997 1998 1999 2000 1996 1997 1998 1999 2000

World 776,776 867,596 860,739 1,031,474 1,044,333480,130 524,530 504,601 585,293 623,043

USA 135,255 2 03,993 252,848 283,090 318,837 64,029 102,248 103,259 145,206 157,591

France 142,250 142,833 131,940 168,211 148,239 94,777 95,146 89,693 89,588 93,524

Japan 96,618 96,088 84,710 89,866 100,092 44,710 45,667 37,964 44,007 49,557

Belgium 0 0 0 0 81,686 0 0 0 0 57,934

Italy 47,820 50,755 47,396 74,366 67,677 35,185 37,469 37,567 49,327 51,822

Germany 46,264 40,424 38,417 60,931 57,354 36,856 33,657 35,979 45,409 43,925

Canada 17,669 24,120 25,568 32,507 41,000 9,885 14,512 17,291 21,149 25,914

Spain 29,011 29,422 24,984 39,440 31,170 21,087 21,353 19,073 25,916 27,460

United Kingdom 25,279 31,253 30,582 30,903 29,309 23,476 25,137 20,777 20,241 19,912

Korea, Republic 18,216 20,229 11,659 19,469 21,790 9,807 11,400 6,727 10,038 10,961

Source: www.fao.org

2.3 Global production of Vegetables This section is related to second category i.e. vegetable, which is a main

component of daily diet in all the countries. Like fruits, in vegetables also China

occupied the leadership position producing 107 million MT vegetables. India holds

a distant second rank with production of 25 million MT of vegetables.

Table 11 Major vegetable producing countries of the world (in 000’ MT) Country 1997 1998 1999 2000 2001

World 174,480 180,339 184,212 193,626 196,083

China 93,545 95,998 97,580 104,988 107,510

India 20,000 22,000 24,000 25,000 25,000

Viet Nam 4,250 4,300 4,300 4,350 4,350

Philippines 3,700 3,900 4,020 4,100 4,200

Nigeria 3,657 3,815 3,868 3,868 3,868

Korea 3,338 3,492 3,346 3,700 3,800

Russian Fed. 3,210 3,114 3,379 3,500 3,300

Japan 3,136 2,973 3,022 2,900 2,900

Myanmar 2,500 2,700 2,800 2,800 2,800

Korea, D P Rep 2,000 2,200 2,200 2,400 2,400

Brazil 2,150 2,200 2,200 2,200 2,200

Others 32,994 33,647 33,497 33,820 33,755

Source: www.fao.org


Table 12 Country-wise percent share of vegetable production (1999-00)

Country % share

China 5 6

India 1 3

Vietnam 2

Philippines 2

Nigeria 2

Korea 2

Russian Fed. 2

Japan 1

Myanmar 1

Korea, D P Rep 1

Brazil 1

Others 1 7

Source:www.fao.org Table 13 Major cassava producing Countries


1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001

World 1597316545166411703217020161950 163613171918 176784 178868 10.14 9.89 10.33 10.38 10.51

Nigeria 2697 3043 3072 3135 3135 32050 32695 32697 33854 3385411.88 10.75 10.64 10.80 10.80

Brazil 1552 1579 1571 1722 1741 19896 19503 20864 23336 2408812.82 12.35 13.28 13.55 13.84

Thailand 1230 1044 1065 1131 1150 18084 15591 16507 19064 1828314.70 14.93 15.49 16.86 15.90

Indonesia 1243 1205 1350 1284 1280 15134 14696 16438 16089 1615812.17 12.19 12.18 12.53 12.62

Congo 2021 2103 2034 1967 1902 16402 17060 16500 15959 15436 8.11 8.11 8.11 8.11 8.11

Ghana 589 630 640 600 600 7000 7227 7845 8107 8512 11.88 11.48 12.25 13.51 14.19

India 256 264 26 8 270 270 5663 6682 6700 7000 7000 22.11 25.28 25.00 25.93 25.93

Tanzania, 564 693 656 848 761 5700 6128 7182 5758 5650 10.11 8.84 10.95 6.79 7.42

Mozambiq

ue 992 1015 958 926 926 5337 5639 5353 5362 5362 5.38 5.56 5.59 5.79 5.79

Uganda 342 356 375 401 390 2291 3204 4875 4966 5265 6.70 9.00 13.00 12.38 13.50

Source: www.fao.org Cassava is a vegetable, which is important for Kerala. Although it is not among the

widely produced vegetable but its production is increasing appreciably all over the

world. Nigeria has the leadership position, in terms of total production, whereas

India is having the highest productivity viz. of 25MT/HA.

2.4 Global trade of Vegetables

The global trade of vegetable is of 920 million US$. UK is the major importer of

vegetable in the world followed by Germany, whereas the biggest exporter is USA.

China and India, who are the largest producer of vegetables in the world occupy

the third and tenth rank respectively in vegetable exports.

Major Vegetable producing countries

Myanmar1%

Korea2%

China56%

Russian Fed.2% Japan

1%Nigeria

2%

Viet Nam2%

Philippines2%

India13%

Korea, D P Rep1%

Brazil1%

Others17%


Table 14 Major fresh vegetable importing countries of world in 2000 (Value in 000’US$) Countries Imports

World 920,953

United Kingdom 122,684 Germany 91,548 France 77,755

Canada 77,304 Japan 76,363 China, Hong Kong SAR 74,787 United State s of America 65,591 Belgium 33,387

Singapore 26,184

Switzerland 20,178 India 2 1 Source: FAO, 2000 Table 15 Major fresh vegetable exporting countries of world in 2000 (Value in 000’US$) Countries Export

World 920,543 United States of America 155,979 Italy 106,888 China 84,588 France 82,563 Netherlands 70,446 Kenya 63,827 Spain 36,761 Israel 33,523 Thailand 20,991 Belgium 18,066 India 15,901 Source: FAO, 2000

2.5 Global production of Floriculture products

The three leading production countries in floriculture are Japan, the Netherlands

and the United States. Traditionally, countries like China, India, Japan & USA have

been major growers of flowers. However, these countries have been producing

floriculture products mainly for domestic consumption and have not been major

suppliers of flowers internationally. The Netherlands is the largest producer of cut

flowers in the world for international supply. Colombia and Italy follow the

Netherlands. There are nearly 80 countries, which are active in world floriculture

trade, while total area under floriculture both under protection as well as for open

cultivation is around 223 thousand hectares. The production area in different parts of


the world under open field cultivation is about 60 % and 40 % is under protected

cultivation. China has maximum area under floriculture i.e. 59 ha (26%), followed by

India (15%) and Japan (9%).

According to the statistics available from the Flower Council of Holland, Switzerland,

Norway, Austria and Germany, in that order, are the countries with highest per

Capita consumption of floriculture products. The details of World consumption, per

Capita consumption of flowers, market size and world trade is furnished in table 16

and 17:

Table 16 Major suppliers of floriculture produce Countries %

Netherlands 60 Colombia 9 Italy 6 Israel 4 Kenya 1 Others 20 Source: NHB database 2001

Table 17 Major consumer of floriculture produce Countries %

Germany 27 Belgium-Luxembourg 3 France 10 Austria 3 Italy 4 Japan 10 Sweden 3 Switzerland 5 Spain 1 UK 8 Denmark 2 Netherlands 8 Norway 1 US 12 Canada 2 Others 1 Source: NHB database 2001

The emergence of new production centres in Asia, Latin America and Africa has

made the floriculture market quite competitive. The countries of these regions

derive their competitiveness from low cost to high level of investment and rapid

innovation. These countries produce highly quality floriculture products at a low

cost price, which is finding a favorable place in the markets of Western America

and Japan.

Major Suppliers of flowers

Colombia9%

Italy6%

Isarel4%

Kenya1%

Others20%

Netherlands60%

Major Consumer of floriculture produce

Germany27%

Others1%

Belgium-Luxembourg

3%

France10%

Austria3%

US12%

Norway1%

Netherland8%

Denmark2%

UK8%

Spain1%

Italy4%

Japan10%

Switzerland5%

Sweden3%

Canada2%


2.6 Global trade of Floriculture products

The world trade in floriculture and plants is estimated to be more than US $ 40 billion.

Consumption of flowers has increased manifold in the last 2 decades. The global

consumption of floriculture products is estimated to be above USD 50 Billion. The

world trade measured in terms of imports into the main markets is to the tune of USD

7.9 Billion. The rate of increase in world trade has been around 10 percent in recent

years. The share of developing countries in total trade has been around 20 percent

in the last few years. Cut flowers constitute a major portion of the world trade in

floriculture products. In the total global import of floriculture products of 7.9 billion

USD during 1999, flowers accounted for USD 3.76 billion, followed by plants, USD 2.78

billion. The trade figures of major markets during 1999 are provided in Table 18.

Table 18 World trade in floriculture (1999) (FIGURES IN ‘000’ US$)

S.NO. COUNTRY BULBS PLANTS FLOWERS FOLIAGE TOTAL 1 . Germany 69,183 673,730 794,251 141,321 1,678,484 2 . USA 203,280 257,224 734,804 85,759 1,281,103 3 . France 69,852 363,353 414,869 37,208 885,282 4 . U.K. 50,704 264,337 526,637 26,291 867,969 5 . Netherlands 30,989 192,603 366,418 157,028 747,035 6 . Italy 58,840 168,711 146,278 15,539 389,368 7 . Japan 121,523 70,408 153,680 38,219 383,830 8 . Switzerland 29,493 141,008 140,949 32,295 343,745 9 . Belgium 11,156 149,300 108,168 21,775 290,399

10. Austria 11,390 105,673 90,095 17,079 224,237 11. Canada 31,648 95,216 62,808 14,178 203,850 12. Sweden 18,210 93,089 45,657 4,378 161,333 13. Denmark 10,370 72,532 64,414 7,049 154,366 14. Spain 16,940 64,884 38,605 4,815 125,244 15. Finland 6,959 26,553 15,790 3,864 53,165 16. Portugal 4,746 22,859 16,940 1,453 45,121 17. Ireland 778 10,702 28,089 849 40,418 18. Greece 3,677 12,839 21,869 1,294 39,679

Total 7,49,734 27,85,021 37,69,443 6,10,430 79,14,629 Source: www.pathfastpublishing.com

Table 19 Growth rate of International trade in cut foliage from the year 1992 to 1999(in 000’US$)

Country 1998 1999 % growth Austria 18,621 17,079 1 Belgium 12,891 21,775 8.5 Canada 13,761 14,178 1 3 Denmark 6,823 7,049 1 3 Finland 4,379 3,864 -3 France 35,462 37,203 1 5 Germany 155,614 141,321 0 Greece 1,342 1,294 6 Ireland 760 849 2 3 Italy 13,740 15,539 2 4 Japan 34,331 38,219 2 2 Netherlands 163,579 157,028 5 Portugal 1,101 1,453 4 5 Spain 3,915 4815 3 5 Sweden 5,232 4,378 -8 U.K. 29,195 26,291 -1 Switzerland 31,835 32,295 1 1 USA 84,466 85,795 1 1 Total 617,047 610,430 9

Source: www.pathfastpublishing.com


Cut flower production in Africa, particularly in Kenya, Zimbabwe, Ivory Coast,

Morocco, South Africa and Tanzania is highly competitive. Professional companies

owned by foreign investors, hire experts from Europe for the purpose of operating

flower-growing facilities in these countries. These countries have benefited from

developing infrastructure, knowledge, transport facilities and entry to European

market due to trade agreement. Bulk of flowers produced in these countries is

intended for export to the European market, with increasing efforts to catch on the

Asian market as well. Roses are the major cut flowers grown in these countries

owing to them higher income generation capacity from exports. Growers in South

Africa, especially small growers, have focused production for domestic

consumption.

It is quite evident from the data in Table 20, that Netherlands will face stiff

competition from Latin American, African and Asian countries in the near future.

India, which entered commercial floriculture quite late, also seems to have a bright

future.

The key exporting countries are Holland, Colombia, Italy and Israel. The share of

exporting countries is given in table 20:

Table 20 Major exporters of cut flowers

Country Share in export market (%) *

Holland 59 Colombia 10 Italy 6 Israel 4 Spain 2 Kenya 1 Others 18

Source: www.pathfastpublishing.com It is evident from the figure above that 4 leading exporters – Holland, Colombia,

Italy and Israel – constitute about 80 percent of the market. The share of the

developing countries in Africa, Asia and Latin America including Thailand, Ecuador

and India is less than 20 percent. The international trade in cut flowers is growing by

about 11 percent.


Table 21 Major importers of cut flowers

Country Imports (%)

Germany 39 U.S.A 17 France 11 U.K. 10 Netherlands 6 Japan 6 Switzerland 5 Others 6


The consumption in UK, Holland and Germany is growing by 10-15 percent while,

the consumption in Switzerland and France is growing at a faster pace.

Roses are the most preferred flowers in the international market. Carnations and

chrysanthemums are other flowers, which also have a major share in the

international market. The demand for roses has been growing at a higher rate

compared with other flowers, resulting in a logical decision for Indian flower growers

to invest in the production of roses. The table 22 serves as an indicator of the final

destinations in West Europe.

Table 22 Export destinations for Floriculture Products (from the Netherlands including re-export) - Year 1999

S.NO. COUNTRY MILLION NLG

1. Germany 3,236 2. France 1,170 3. United Kingdom 1,044 4. Italy 446 5. Belgium 309 6. Switzerland 261 7. Austria 251 8. Spain 230 9. Denmark 205 10. Sweden 175

Source : www.pathfastpublishing.com

Table 23 Share of different flowers in the European market

Flower Share (%)

Roses 51

Carnations 19

Chrysanthemums 10

Gladioli and orchids 15

Other species 5



The top ten cut flowers and pot plants traded at Dutch Auctions, which is an

indicator of the world trade, are given in Table 24.

Table 24 The turnover of top 10 cut flowers at Dutch Auction (VBA, 1999)

SL. No.

CUT FLOWERS MILLION NLG

1. Rose 1672 2 Tulip 569 3 Chrysanthemum 421 4 Gerberas 272 5 Carnation 178 6 Lily 143 7 Freesia 141 8 Alstroemeria 139 9 Iris 103 10 Gypsophila 87

Source: www.bbh.nl

The trade in exotic flowers like Anthurium and Orchids is growing and is dominated

by a few niche players and these flowers command a high price.


3 OVERVIEW OF INDIA’S PRODUCTION OF HORTICULTURE PRODUCE

India’s diversity in climate and soil provides tremendous scope for growing a wide

variety of horticultural produce. Currently, India is the second largest producer of

fruits and vegetables in the world.

3.1 Fruits

The area under the fruit production 3.8 million lacs ha which has increased 13% from

the year 1995-96 whereas the increase in production is only 9%. So overall

productivity has declined in due course of time by 0.4 MT/HA but in case of Banana

India is enjoying the leadership position in terms of Area, production and

productivity. The production has increased substantially by 28%. In case of

Pineapple although there is increase in area but the production and productivity

has declined, marginally from the peak levels in 95-96.

Table 25 All India Area, Production and Productivity of fruits

Year Area (in 000’HA)

Production (in 000’MT)

Productivity (in MT/HA)

1995-96 3357.0 41507 12.4 1996-97 3580.0 40458 11.3 1997-98 3702.0 43263 11.7 1998-99 3727.0 44042 11.8 1999-00 3796.8 45496 12.0

Source: NHB database 2001 Table 26 All India Area, Production and Productivity of Banana


% of total fruit area


% of total fruit production


1995-96 433.1 12.9 13095.1 31.5 30.2 1996-97 424.6 11.9 12439.6 30.7 29.3 1997-98 449.1 12.1 13339.5 30.8 29.7 1998-99 464.3 12.5 15072.7 34.2 32.5 1999-00 490.7 12.9 16813.5 37.0 34.3

Source: NHB database 2001 Table 27 All India Area, Production and Productivity of pineapple


% of total fruit area


% of total fruit production


1995-9 6 71.2 2.1 1071.1 2.6 15.0 1996-9 7 68.7 1.9 924.6 2.3 13.5 1997-9 8 69.3 1.9 937.1 2.2 13.5 1998-9 9 74.2 2.0 1006.4 2.3 13.6 1999-0 0 75.5 1.9 1025.4 2.2 13.6

Source: NHB database 2001


Maharashtra has the highest productivity and of banana in the country. But

production is highest of Tamil Nadu. Although Kerala has very low productivity due

to absence of modern technologies but since the varieties found in the region are

having high demand in GCC countries where a significant number of Keralites are

staying. So low productivity is giving a opportunity to increase the export by

increasing productivity through introduction of hi technology. It is true in case of

pineapple.

Table 28 State wise area, production and productivity of banana

Area (in 000’HA)



States

1997-98 1998-99 1999-00 1997-98 1998-99 1999-00 1997-98 1998-99 1999-00 Andhra Pradesh

45.3 36.9 48.5 1131.9 922.1 1212.5 25.0 25.0 25.0

Assam 41.4 41.9 41.9 575.2 581.9 583.4 13.9 13.9 13.9 Bihar 27.6 28.3 29.2 551 .7 566.4 583.9 20.0 20.0 20.0 Gujarat 31.2 32.7 34.2 1113.8 1097.3 1109.1 35.7 33.6 32.4 Karnataka 60.9 60.9 61.0 2010.4 2010.4 2015 33.0 33.0 33.0 Kerala 24.7 29.1 27.9 351.5 415.1 393.7 14.2 14.3 14.1 Maharashtra 53.2 59.0 72.2 3130 3455.6 4330.5 58.8 58.6 60.0 Orrisa 23.9 24.7 16.4 257.4 276.8 193.5 10.8 11.2 11.8 Tamil Nadu 82.3 88.1 92.2 3144.4 4405.5 4856.4 38.2 50.0 52.7 West Bangal 16.2 18.7 18.8 210.1 301.2 331.4 13.0 16.1 17.6 Others 42.4 4 4 49.5 863.1 1040.4 1203.1 20.3 23.6 24.3

S ource: NHB database 2000 and 2001 Table 29 State wise area, production and productivity of pineapple

Area (in 000’HA)



States

1997-98 1998-99 1999-00 1997-98 1998-99 1999-00 1997-98 1998-99 1999-00 Arunachal Pradesh

7.2 7.3 7.3 29.4 30.2 32.0 4.1 4.1 4.4

Assam 14.1 13.6 13.8 217.3 209 207.8 15.4 15.4 15.1 Bihar 3.3 3.7 3.9 88.0 92.1 97.0 26.7 24.9 24.9 Kerala 5.0 8.6 9.0 46.7 57.3 73.7 9.3 6.7 8.2 Manipur 9.4 10.0 1 0 66.0 69.8 69.0 7.0 7.0 6.9 Meghalaya 9.3 9.3 9.4 80.4 80.4 82.5 8.6 8.6 8.8 Nagaland 2.3 1.8 2.5 63.7 60.0 71.1 27.7 33.3 28.4 West Bangal 9.2 9.6 10.3 246.8 283.9 280.2 26.8 29.6 27.2 Others 9.5 10.3 9.3 98.8 123.7 112.1 10.4 12.0 12.0

Source: NHB database 20 00 and 2001 As per the NHB, the productivity of Banana is 14 MT/HA but there is a contradiction

in the information given by state Govt. according to which the productivity is 8

MT/HA.

3.2 Vegetables The area under vegetable production is increasing every year substantially. There is

a 10% of increase in area in last seven years and the increase in production is very

encouraging i.e. 21% due to introduction of modern technologies in cultivation.


Although tapioca does not find a place in the main vegetable basket of the

country but its demand from NRIs in Gulf makes it a regular feature of exports from

India. A positive growth rate is also observed in its area production and

productivity. Kerala has highest area under this vegetable but it is second in

production and productivity, having lost top position to Tamil Nadu in recent years.

Table 30 All India Area, Production and Productivity of vegetables




1995-96 5335 71594 13.4 1996-97 5515 75074 13.6 1997-98 5607 72683 13.0 1998-99 5866 87536 14.9 1999-00 5993 90831 15.2

Source: NHB database 2001 Table 31 All India Area, Production and Productivity of Tapioca


Production(in 000’MT)


1995-96 228.2 5443.2 23.9 1996-97 256.1 5662.8 22.1 1997-98 264.3 6681.9 25.3 1998-99 243.4 5830.0 24.0 1999-00 234.8 6181.1 26.3

Source: NHB database 2001 Table 32 State wise area, production and productivity of tapioca

Area (in 000’HA)



States

1998-99 1999-00 1998-99 1999-00 1998-99 1999-00

Andhra Pradesh 22.0 18.1 132.0 111.5 6.0 6.2 Assam 2.7 2.8 13.4 13.4 5.0 4.8 Karnataka 1.0 0.8 8.5 6.6 8.5 8.3 Kerala 129.9 109.3 2810.9 2563.5 21.6 23.5 Meghalaya 4.0 4.0 21.3 21.5 5.3 5.4 Mizoram 0.5 0.2 2.5 2.0 5.0 10.0 Nagaland 0.8 0.8 15.8 15.8 19.8 19.8 Rajasthan 0.1 0.1 0.4 0.4 4.0 4.0 Sikkim 0.5 0.5 1.2 1.2 2.4 2.4 Tamil Nadu 80.9 97.2 2804.7 3425.5 34.7 35.2 A&N 0.4 0.4 3.5 3.5 8.8 8.8 Pondicherry 0.6 0.6 16.2 16.2 27.0 27.0

Source: NHB database 2001

3.3 India’s Exports

Out of the total world exports of fresh vegetables, India’s share is hardly 2%. The

product-wise list of exports of fresh, chilled/frozen vegetables is given in table 33:


Table 33 Exports of fresh fruits and vegetables from India (2000 -2001)

Fruits Qty (MT)

Value (Rs.)

Mangoes 37110 6,86,070 Grapes 20647 829,355 Banana 8630 180,030

Pineapple 757 12,859 Apples 2847 41,729 Papaya 11928 161,991

Guava 670 12,784 Dates fresh 1 114 Oranges fresh 2683 273,734 Mandarins 15 264 Lemons 3527 57,487 Grapefruits 220 8,479 Other citrus fruits 79 784 Cherries 5 176 Pomegranates 4456 99,156 Tamarind fresh 2289 34,118 Sitafal 181 2,466 Sapota 911 16,185 Pear & quince 4 64 Custard apple 640 11,767 Figs 0.5 9 Mangosteens 989 22,012 Strawberries 40 3,917 Bore 154 1,633 lichi 167 15,184 Other fresh fruits 15619 191,314 Total of fresh fruits 119000 138,153,390

Source: APEDA Export Statistics It is quite evident that out of this list, barring onion and potato no other vegetables

having significant export volumes.

Table 34 Destination of India’s exports of Fresh Vegetables

1996 1997 1998 1999 Qty (Mt)

Val (1000$)

Qty (Mt)

Val (1000$)

Qty (Mt)

Val (1000$)

Qty (Mt)

Val (1000$)

16,862 4,315 48,799 14,395 39,010 15,297 39,010 15,297

Kuwait, Nepal, Bahrain Sri Lanka, Spain, UAE

UAE, Saudi Arabia, Germany

UAE, Maldives, Saudi Arabia

Source: APEDA Exports statistic

Further, India’s fresh vegetable exports are not consistent to any particular country,

indicating that no concerted effort has been made to develop the market and

exports have been on short term basis.

Vegetables Qty (MT.) Value (Rs.)

Fresh onion 343254 2,762,191 Potaotes fresh 22637 116,009 Tomatoes 1134 10,520

Kohrbi 26 618 Other lettuce 56 1,527 Radishes 0.07 0.3 Salad Beet Root 1 18 Other legumes 24 634 Shallots 10 125 Garlic 4443 51,636 Globe artichokes fresh 12 325 Asparagus 0.2 24 Mushrooms fresh 7597 391,952 Spinach 2 21 Olive fresh 55 659 Pumpkins 273 9,200 Other vegetables fresh/chilled 28934 352,942 Cabbage lettuce 65 3,565 Cauliflowers 2 33 Cucumber & gerkin 7445 123,370 Peas 723 15,157 Beans 47 3,745 Egg Plants 8 73 Green chilly 3212 59,482 Other chilly 367 8,206 Plantain(curry Banana) 22 855 Mixed vegetables 26193 354,443 Total vegetable 477245700 4,670,685


3.4 Flowers

India is endowed with varied agro climatic conditions suitable for growing a

number of flowers. India is known for growing the traditional flowers such as

jasmine, marigold, chrysanthemum, tuberose, etc. though growing of cut flowers is

of recent origin. Tamil Nadu, Karnataka, Maharashtra, West Bengal, Jammu and

Kashmir, Sikkim and Andhra Pradesh are major flower growing states. The total area

under flower crops is 89 thousand hectare, with a total production of 509 thousand

MT of loose flowers and 681 million cut flowers. The volume of trade in the domestic

market was around Rs. 200 crores in the beginning of the nineties, which has now

grown in more than Rs. 500 crores. The trade figures have increased manifold due

to significant increase in floriculture production during this period.

Table 35 All India Area, Production and Productivity of flowers



Loose

Production (in lacs no’s)

Cut 1995-96 82 334 5370 1996-97 71 367 6152 1997-98 74 366 6222 1998-99 74 419 6428 1999-00 89 509 6806

Source: NHB database 2001 Most important cut flower under protected cultivation is rose and large headed

Hybrid-T roses are cultivated in plastic houses. Initially imported technology was

used for cultivation, but farmers have now modified techniques more suitable to

Indian conditions.

Table 36 Export of floriculture products from India (1999-2000)

West Europe Volume (MT)

Value (000’ Rs.)

Germany 410 45376 UK 460 30702 France 96 8480 Belgium 116 9014 Italy 169 16590 Netherlands 381 30073 Switzerland 14 1145 Spain 134 14084 Sweden 11 1545 Denmark 120 17122 Total 1911 174131 SEA & Pacific Australia 26 1999



Value (000’ Rs.)

Japan 66 6412 Sri Lanka 135 4763 Singapore 0.02 2 Hong Kong 20 716 Total 246 138906 USA 1995 8591 Gulf UAE 27 21700 Grand Total 4179 323798


Table 37 Export of cut foliage from India (Value in 000’ Rs)

Country 1999-2000 2000-2001 Italy - 1269 Kenya 250 - Srilanka - 305 Netherlands - 757 Singapore 2 - U.A.E. 142 - USA - 579 Total - 2911


The exports of floriculture products from India are mainly directed to Europe, Gulf

and Middle East. Exports are suppose to increase in coming years in all the

horticulture produce through India due to the air freight subsidy provided by

APEDA, which was the main constraint earlier in the exports of horticulture produce.


4 AGRICULTURE IN KERALA

Kerala state is situated in the Southwest corner of Indian Peninsula between 8” 18’

and 12” 84’ North latitude and 74” 52’ and 77” 22’ East longitude. The state is

bounded by Western Ghats in the east; the Arabian Sea in the west, Tamil Nadu in

the South and Karnataka in the North. Total land area is 38,864 sq. m. with length of

coastal line 590 km (North to South direction) and width 30-130 km between the

Western Ghats and the Arabian Sea (East -West direction). Kerala is a land with

highly diversified physical features and agro-ecological conditions. The undulating

topography of the land ranges from below the sea level to 2,494 mtrs above the

seal level. The state can be divided into four zones based on the physiographical feature.

Table 38 Classification based on the physiographical features of the state

Regions Specialties Crops grown

High ranges Mountains land with elevation ranging from 750-2500 as above MSL along with high ranges. Most area is reserve forest. (1.94 lac ha)

Tea, Coffee, Rubber Cardamom

High land Elevation ranging from 75-1500 m above MSL, (16.71 lac ha), located of the foot with of Western Ghats. Contains high content of organic matter.

Tea, Coffee Rubber Pepper, Cardamom

Mid land Ranges from 7.5-75.0 m above MSL covering 16.23 lac ha. Undulating terrain with rivers, small hills and valleys. Annual and perennial crops.

Rice, Coconut, Tapioca, Banana, Sugarcane, Pepper, Ginger, Arecanut, Cashew and Rubber

Low land Strips of land running along the coast bordering the Arabian Sea with a coat line of 590km with an elevation less then 7.5m above sea level. Characterized by backwaters. Land is subjected to salinity intrusion.

Rice, Coconut

Source: Department of Agriculture, GOK

4.1 Agro-soil Zones of Kerala

In the state of Kerala, super imposing six moisture availability regimes over seven soil

groups identifies twenty agro-soil zones.


Table 39 Agro-soil Zones of Kerala

S. No.

Zones Location Crops grown

1 Dry Forest Loam In and around Chinnar Plantation crops other than spices, coconut and tapioca

2 Semi Dry Red Loam

Isolated pockets in Thiruvanthapuram and Neyyattinkara Taluks

Coconut, tapioca, paddy and fruits plants like cashew & mango

3 Semi Dry Laterite Parts of Quilon, Chirayinkil, Thiruvanthapuram, Neyyattinkara & Nedumangad taluk

Paddy, coconut and fruit crops like mango and cashew

4 Semi Dry-Alluvium River beds and coastal areas of Quilon, Chirayinkil, Thiruvanthapuram Neyyattinkara, Ottappalam Talappillly, Palakkad and Alathur Taluks

Paddy, coconut, tapioca, mango and cashew

5 Semi Dry-Black soil Eastern most parts of Chittur and Palakkad taluks

Paddy cotton and Coconut

6 Semi Dry-Forest Loam

Kumily and parts of Peerumedu taluk Tapioca, tea, coffee and rubber

7 Sub humid -Red Loam

Kasaragod and Kannur. Parts of Kasaragod, Hosdurg and Taliparamba taluks

Coconut, cashew, paddy, rubber, pepper and arecanut

8 Sub humid – Laterite

Parts of Kannur, Tirur, Choughat, Parur, Kasaragod, Hosdurg, Taliparamba, Tellichery, badagara, Talappily, Trichur, Mukundapuram, Alwaye, Kanayannur, Alathur, Chittur, Ernad, Mannarghat, Palghat, Kunnathur, Kottarakkara, Pathanapuram, Neyyattinkara and Nedumangad taluks

Paddy, coconut, rubber, cashew, pepper, arecanut, tapioca and mango

9 Sub humid – Alluvium

Coastal areas and river beds in the regions under item 8

Paddy, coconut, Mango, cashew, rubber, Pepper, arecnut and Tapioca

10 Sub humid – Saline

Pokkali lands in the coastal parts of Parur, Kanayannur and Cochin taluks

Paddy and Coconut

11 Sub humid Forest loam

Parts of Ernad, Mannarghat, Devikulam and Pathanapuram Taluks

Pepper, tea, cardamom, tapioca and paddy

12 Humid laterite Parts of Kasaragod, Taliparamba, Tellicherry, Qualiandy, Kozhikode, Badagara, Kunnathun ad, Meenachil, Kanjirappaly, Pathanamthitta, Chengannur, Mavelikkara and Nedumanagad taluk

Vegetables, nutmeg, cashew, folder grass and pineapple

13 Humid – Alluvium River beds of taluk areas described under item 12, western part of Chengannur and Mavelikkara taluks, coastal areas of Shertali, Ambalapuzha and Karunagapaly

Paddy, coconut, cocoa, tapioca, arecanut, mango and banana

14 Humid – Greyish Onattukara

Onattukara – parts of Mavelikkara, Karunagappally and Karthikappally taluk

Paddy, coconut, Seasamum and tapioca

15 Humid Saline Around Vembanad lake (areas with acid saline soils)

Paddy and coconut


S. No.

Zones Location Crops grown

16 Humid Forest Loam Parts of Ernad, south Wynad and North Wynad, Kasaragod, Hosdurg, Taliparamba taluks; Tellicherry, Pathanamthitta, Pathanapuram, Neyyattinkara, Devikulam and Peerumedu taluks

Coffee, tea, pepper, cardamom, rubber, ginger, paddy, mango and jack

17 Per Humid Laterite Parts of S. Wynad, Quilandy, Ernad, Kunnathunad, Devikulam, Todupuzha, Kothamangalam, Meenachil and Kanjirappally taluks

Paddy, coconut, tapioca, rubber, pepper, Arecanut, cocoa, mango, jack, cashew, ginger and banana

18 Per Humid Forest Loan

A small pocket in and around Vythiri, parts of Devikulam, Thodupuzha and Peerumedu taluk

Paddy, coconut, coffee, Tapioca, pepper, tea, cocoa and cardamom

19 Wet Laterite Parts of South Wynad, Ernad, Mukundapuram, Devikulam, Meerumedu, Pathanamthitta Taluk

Cardamom, Tea, Coffee, Rubber, Pepper, Tapioca, Ginger and Paddy

20 Wet Forest Loam Parts of Neriamangalam, Devikulam, Thodupuzha, Kanjirappally, Meenachil and Peerumedu Taluk


4.2 Land use Pattern

The table 40 indicates the details of land use pattern in 1995-96 and 2000-01.

Table 40 Land use pattern in Kerala (Area in ha)

1995-96 2000-01 S. No

Classification of Land Actual % Actual %

1 Geographical Area 3885497 - 3885497 - 2 Forest 1081509 27.83 1081509 21.83 3 Land put to non -agricultural uses 313131 8.06 381873 9.8 4 Barren and uncultivated land 43154 1.11 29318 0.8 5 Permanent pastures & Grazing land 1170 0.03 164 - 6 Land under miscellaneous tree crops not

included in net area sown 26852 0.69 15409 0.4

7 Cultivable waste 74382 1.91 59277 1.5 8 Fallow other than Current fallow 29143 0.75 33988 0.87 9 Current fallow 51314 1.32 77853 2.0

10 Net area sown 2268420 58.29 2206126 56.8 11 Area sown more than once 802383 20.65 815556 21.0 12 Total cropped area 3067225 78.94 3021692 77.8 13 Cropping intensities 135.43 - 137 - 14 Area under horticultural crops 466000 15.00 524000 17.30


It can be seen from the table 40 that area under current fallow has increased

during last 5 years, which needs to be investigated, as availability of cultivable land

is already limited. The net sown area has also marginally declined. The cropping

intensity is 137.0, which has marginally improved during last 5 years. However,

keeping in view prolonged monsoon this needs to be increased. The area under

horticultural crops was only 4.66 lac hectares, in the year 1995-96, which has


improved to 5.24 lac hectares % in 2000-01, which shows gradual shift towards

horticultural crops.

Another important feature of agriculture in Kerala is extremely small land holdings.

More than 92% of farmers fall into the category of marginal farmers having a land

holding of 0.18 hectares. The details can be seen from the 41:

Table 41 Distribution of operational land holdings in Kerala

No. of Holding Area Operated S. No.

Particulars

(in ‘000 ha) % (in ‘000 ha) %

Average Operation Holding

1. Marginal Farmers 5016 92.5 879 48.8 0.18 2. Small Farmers 281 5.2 381 21.1 1.36 3. Medium Farmers 119 2.2 367 20.4 3.08 4. Large Farmers 3 0.1 174 9.6 58.0 Total 5419 100 1802 100 0.33

Source: Centre for monitoring Indian Agriculture

The important features of agriculture in Kerala are:

§ The shift in area from subsistence seasonal or annual food crops has been

continuing. Food crops are becoming increasingly difficult to sustain.

§ The productivity of crops still remains lower as compared to other states.

§ Regional imbalances in agricultural growth.

§ Movement of cultivators and agricultural labour away from the farm front. Acute

shortage of labour for field operations during peak seasons in the midst of

unemployment.

§ Wage rates very high (Rs. 140 – 160 per day).

§ High proportion of part-time farmers

§ Drift towards less labour absorbing systems of land use.

§ Trends towards mixed cropping pattern, which helps in reducing risks due to fall-

in prices of a particular commodity.

§ NRI/owners of small plots lease out land for cultivation.

§ No Agri Produce Marketing Act in Kerala and no regulated markets.

§ Existence of Kerala land use act, which prohibits shift of land under paddy

cultivation to any other crop.

4.3 Role of State Government in Development of Horticulture

The stagnant production of fruits and vegetables in 1990s and state’s increasing

dependence on supplies of fruits and vegetables from the neighbouring state;

seized the attention of Government of Kerala and a number of projects related to


production enhancement of fruits and vegetables and creation of Agri-

Infrastructure were initiated. The important on going projects in the state are

detailed in the following paragraphs

4.4 Kerala Horticulture Development Programme (KHDP)

Kerala Horticulture Development Programme (KHDP) is a joint venture of the

European Union and the Government of Kerala. The programme, which has an

outlay of Rs. 131.45 crores, envisages the overall development of the cultivation and

production of vegetables and fruits in the state of Kerala and also an increase in the

level of income earned by the small-scale horticultural farmers of the state. It also

aims at building up of development models in the horticultural sector for the benefit

of developed and developing countries.

4.4.1 Features

§ Establishment of a unique system of organizing the farmers into self-help groups

for attaining self-sufficiency.

§ Empowerment of Self Help Group (SHG) for taking up and maintaining activities

for commercial production based on advanced technology.

§ Activities pertaining to the vegetables and fruit sector, stressing at all stages

thereof, right from the development of technology to value addition and trading

of the products.

§ Technology development with farmers’ active participation.

§ Better income to farmers through planning of production, marketing and credit.

§ Equipping farmers as leaders & thereby making the knowledge dissemination

process effective.

§ Imparting training to master Farmers to equip them as trainers.

§ Unique concept of transfer of technology through Master Farmers as trainers.

4.4.2 Activities Establishment of self -help groups (SHGs) of farmers as focal points of implementing

the promotional schemes. Technical packages on scientific basis for improving

productivity are being delivered to these groups through a team of trained

extension staff and Master farmers, specially trained for the purpose. The major

activities are:


§ Imparting training to extension personnel and Master Farmer, in all aspect of

vegetable and fruit production, credit, marketing and farmer training.

§ Providing quality seeds and planting materials to farmers. A modern seed

processing plant had been established at Alathur as part of the Programme with

the objective of providing quality seeds to vegetables to the farmers.

§ Undertaking contractual R&D Programmes with the assistance of Kerala

Agricultural University.

§ Participatory Technology Development (PTD) with active involvement of farmers.

§ A unique need based Credit System with the participation of selected

commercial banks, wherein beneficiary farmers in SHGs are given access to

credit from branches of these banks. The credit package is farmer friendly with

innovative features.

§ Setting up of Krishaka Vipanis (Farmer Markets) at major production center,

which are managed by the farmers under the support from Programme Staff.

§ Market Intelligence network for compiling / publishing data on the latest market

information of fruits and vegetables, in order to improve the bargaining ability of

farmers.

4.4.3 Project outlay and financing pattern

The total outlay of the project is 36.76 million Euro, which is equivalent to about

Rs.131.45 crores. This is financed as follow:

Table 42Financing Pattern

Donors Percentage Rs. (In crore) European Union 78.0% 102.53 Government of Kerala 21.5% 28.26 Others 0.5% 0.66 Total 100% 131.45

Source: KHDP progress Report

4.4.4 Self Help Groups

The activities of the Programme are being implemented through self-help groups,

each consisting of 15 to 20 vegetable and fruit farmers in the neighborhood. This

new method of organizing farmers aims empowering them to attain self-sufficiency

in production and marketing of vegetable & fruits. As on 31st Dec, 2001, there were

1,886 SHGs formed with the participation of a total of 40,958 farmers in

Thiruvanthapuram, Kottayam, Ernakulam, Thrissur, Palakkad, Malappuram,

Kozhikode.


4.4.5 Seed processing

The seed processing Plant set up at Alathur near Paighat is an important component

of the Programme. This plant with a capacity of processing 1.5 MT of seeds/hour is

capable of processing paddy, oil seeds and pulses, besides vegetable seeds. The

Programme also provides expert training to farmers in seed production, processing

and quality inspection. This seed processing factory can provide seeds of high

quality to the farmers as per requirements and hence obviate several major

problems faced by them including scarcity of seeds and difficulty for procurement

and processing during bad weather conditions. A Seed Growers Association has

been formed, which is registered.105 MT of seeds were processed in the Seed

Processing Plant.

4.4.6 Technology development through farmer participation

The concept that farmer’s participation is inevitable for minimizing the drawbacks of

the modem technology and making the same applicable in the field. Scientists and

technical personnel facilitate participatory approach and this in turn helps in

refinement of technologies. KHDP has already started Participatory Technology

Development (PTD) activities with objectives viz.

§ Development of superior technology, which could be made operational

§ Empowerment of farmers for development and use of appropriate technology.

The PTD farmers are involved in the problem analysis process at all stages and are

more likely to adopt the recommendations. The approach is to utilize to the

maximum the traditionally acquired knowledge along with modem technology. The

farmers experimenting in their own fields, enabling reduction in the cost of

production, adoption of improved methods of plant protection, availability of higher

yield of crops with superior quality and also ensuring quality of the end products.

4.4.7 Credit facilities

On the basis of the Memorandum of Understanding executed by KHDP with State

Bank of India, State Bank of Travancore, Union Bank of India, Canara Bank and

South Malabar Gramin Bank, credit facilities are being extended by these banks to

the vegetable and fruit farmers organized on SHG basis. Lease land cultivators can

also access credit through this package.


4.4.8 Training

KHDP implemented training programmes for Master Farmers who were in turn to

train their fellow farmers in modem techniques including production, value addition

and marketing. The farmers are given comprehensive training covering all the

aspects of vegetable & fruit cultivation. In all the project areas, well -equipped

training centres are functioning. Project staff members are also trained regularly to

enhance their capabilities. The multidisciplinary knowledge base of the personnel is

updated in a timely & sequential manner. As on 31st Dec the project organized 258

batches project staff training programs.

4.4.9 Marketing arrangement for vegetables and fruits The activities being implemented under this scheme are:

§ Providing the latest information pertaining to the market and the price levels, to

the producer.

§ Organizing wholesale markets of several fruits & vegetables, with infrastructural

facilities for procurement grading and trading of products.

§ Imparting expert training to farmers in marketing their produce.

4.4.10 Market information centre The Market Information Centre (MIC) of KHDP centered at Ernakulam, collects data

of prices from 12 main markets, 6 urban retail markets of Kerala and 5 outside state

markets for vegetables and fruits. It compiles and a nalyses the same for publication

in the mass media for the use of the farmers and consumer. Short-term forecasts

regarding prices of vegetable and fruits also are provided to the farmers. Market

trend is also provided on a weekly basis to farmers’ market.

4.4.11 Farmers field centres

As on 31st December 2001, 79 Farmers Field Centres & 18 Bulking Centres have been

established, to equip farmers themselves to handle the marketing activities directly

like assessing the arrival of produce finding suitable traders, fixing reasonable price,

maintaining accounts, regular auditing & employ adequate staff etc. Training has

been provided to about 51892 farmers in produce, handling, grading & marketing

techniques.


4.4.12 Fruit processing A Fruit Processing Factory has been set up at Avoly, near Muvattupuzha, for

processing fruits like pineapple, mango etc. with the capacity to process 3.5 t of

pineapple/hour and provides concentrated juice up to 290 Kg/hour. Mango also

can be processed similarly. The major product is RTS (Ready to Serve) directly based

on Pineapple, Mango and mixes for retail in 250ml Tetra Pack cartons. Fruit Candies

from pineapple, papaya, mango, ginger & banana also can be made here. This

factory has spun off as a public limited company named Nadukkara Agro-

processing Company Limited in which farmers will have major (70%) equity share

holding. The Government of Kerala will hold the balance 30% shares.

4.5 Kerala State Horticulture products Development Corporation Ltd. (HORTICORP)

4.5.1 A brief History Kerala State Horticultural Products Development Corporation Limited (HORTICROP) is

a fully owned Government Company incorporated in the year 1989. The main

objective of the formation of the company was to achieve multifaceted

developments in the field of Procurement Processing and Marketing of vegetables

and fruits in the State of Kerala. In the formative years the Corporation activities

were of restricted nature such as Participation in Fairs and Exhibitions,

Implementation of Schemes of Government of Kerala and Government of India and

limited distribution of vegetables, fruits, planting materials etc. The Government in the year 1996-97 so as to make it more useful to the public and

the farmers alike revived the Corporation after years of low key functioning. Thus a

revival package “Cold Chain Scheme” was proposed by the Corporation to

streamline the operations of the Company in a more scientific and productive way

so as to deliver maximum benefit to the customers and ensure fair prices to the

producers.

The main objects of HORTICORP as envisaged in Cold Chain Scheme are:

§ The operation of a chain of retail outlets throughout the State, through scientific

procurement, storage and distribution of quality vegetables and fruits to the

consumer at reasonable rates.


§ Procurement of quality vegetables and fruits from the farmers. Haritha Sangams

and ‘Swasrcya Karshaka Vipani’ of the VFPCK at reasonable rates thus

eliminating the exploitation by middlemen.

§ Maintaining the open market prices of vegetables at reasonable levels by

effectively intervening in the markets and eliminates shortage in the supply of

vegetables in the State.

§ Attract more and more farmers to the field of Horticulture by providing them with

adequate marketing support and collection centres and thereby reducing the

dependency for vegetables on other states.

4.5.2 Functional Areas § Procurement of vegetables and fruits

HORTICORP through its chain of 7 Regional offices procures vegetables and fruits

from both within the State and from the neighbouring States at reasonable rates

on a daily basis from the farmers, farmers’ societies and directly from the major

wholesale markets. The vegetables brought to the Regional centres are graded

and distributed through the retail outlets.

§ Marketing of vegetables and fruits through retail outlets of HORTICORP.

HORTICORP has established a chain of more than 450 retail outlets throughout

the State for the marketing of the vegetables and fruits. The outlets are located

in the vicinity of the areas with high density of population and thus ensure

accessibility to the public. Also, as the prices are maintained at uniform rates in

each district it ensures fair prices to the consumers.

§ Scientific storage facility

HORTICORP has commissioned two State-of-the-art cold storages at Munnar,

Idukki district and Eruthiampathy, Palakkad District. These storages are aimed at

providing storage facilitates to the farmers for storing their vegetable without

damage during surplus production months and getting a fair price in times of

shortages.


§ Distribution of seeds and planting materials

HORTICORP distributes good quality seeds and planting materials through the

Krishibhavans and some retail outlets, to the farmers.

§ Participation in state and National Agricultural exhibitions and organising fairs

during festival seasons.

§ Implementation of Central Sector Scheme on “Beekeeping for improving crop

productivity” in the State of Kerala

4.5.3 Achievements

§ General Achievements

- Making available to the Customers commodities at low rates compared

those in the open market prices.

- Ensure availability of all varieties of quality vegetables throughout the year.

- Provide employment opportunities both direct and indirect to the public.

- Provide scientific procurement and storage facility for agricultural produces.

- Save farmers fr om exploitation of middlemen.

- Providing a secure marketing infrastructure for produces of farmers.

4.5.4 Products

§ Vegetables

§ Fruits

§ Coconut

§ Essential Commodities

§ Honey and Honey based products like HONEY COLA

§ Planting Materials and Seeds

4.5.5 Future activities proposed

§ Increase the number of retail outlets thus generate employment opportunities.

§ Establish cool rooms in all Regional Production Centres to minimize losses.

§ Maintain quality of vegetables through introduction of Refrigerated trucks.

§ Organise seminars and meeting of agriculturists in order to make them aware of

the modem hi-tech practices in agriculture like Poly house, Drip Irrigation, Group

Farming etc.


§ Diversification of activities

- Introducing value added products like pickles, jams, frozen foods and

vegetables, processed foods etc. in the market.

- Export of vegetables, fruits and processed food products.

- Introduce Commercial Floriculture in the State through production and

marketing of varieties of commercially valuable flowers.

- Intensify distribution of quality vegetable seeds and planting materials to

farmers.

4.5.6 Assistance from government HORTICORP is a unique organisation as it is engaged in the retail marketing of highly

perishable, commodities. It has been effectively controlling the open market prices

even with minimal assistance from the Government. HORTICORP faces stiff

competition from the private wholesalers who dump vegetables from the outside

markets. Our market intervention efforts have helped in maintaining the open

market prices at reasonable levels and within control.

4.6 State Agriculture Department The DOA has made direct interventions too in order to increase the production of

vegetables in the state.

Since 1997-98 the DOA implemented Intensive Vegetable Development

Programme (IVDP) in the state, under which ‘Haritha Sangamas’ are being

organised. In the 152 blocks of Kerala, one procurement-cum-sales outlet (block

outlet) in each block is proposed to be organized. An amount of Rs. 20,000 is

proposed to be provided for each such block outlets for putting up stall and

purchase of platform balance, plastic crates etc. Under the project there is

provision for subsidies for the spray pump, vegetable seed kits, pushcarts for

transporting vegetables and digging-up of well.

Under IVDP, schemes were also introduced for development of vegetable gardens

in the educational institutes.

4.7 Kerala Agro Industries Corporation Ltd.

The broad functions of KAIC include mechanization of agriculture in the state and

development of Agri based industry in the state. KAIC has network of branches in


the state for sale of tractors and other agricultural implements. It also undertakes

role on the basis of hire and machinery purchase or installments basis.

KAIC had put-up a fruits processing unit with an annual capacity of 300 MT at

Punalur. Pineapple and mango were being processed and sold under the brand

name of ‘Kisan Jyoti’. The unit is not operational at present.

4.8 Other Agencies

Some other organisations of Kerala having agricultural land also participated in the

Intensive Vegetable Development Programme. These organisations were State

Farming Corporation, Plantation Corporation, Kerala Agriculture University and Oil

Palm, all of them collectively brought some 200 hectares of land under vegetable

cultivation in the year 1998-99.

4.9 Kerala Agricultural Markets Project (KAMP) KAMP is a European Union (EU) assisted project implemented for the development

of agricultural markets in the State. Under the project 6 Agricultural Wholesale

Markets (AWM) are constructed. Since the three larger markets of the six are

situated in the urban agglomerations of Thiruvanthapuram, Cochin and Kozhicode,

the construction works of the markets were entrusted to the Urban Development

Authorities concerned.

§ Anayara (tvm.) and Nedumangad : TRIDA

§ Maradu (Cochin) and Muvattupuzha : GCDA

§ Vengari (CLT) and S. Bathery : CDA

Original closing date of the project was 31st Mar, 97. This was extended till 31st

Dec’98 for enabling the Sate Govt. to fully utilize the EU share of Rs 3238 lacs. Total

project cost is Rs. 7151 lacs.

4.9.1 Physical progress

Facilities provided in the markets in general are:

§ Separate trading units with modules of 8m x 4m size and loading and unloading

platform on one side and trading space on the other side

§ Ancillary buildings for market administration, Dormitory, Canteen etc.

§ Wide internal roads and parking facilities.


4.9.2 Operational progress According to the Government Order, an executive committee will be constituted

with the District Collector as Chairman and an officer in the cadre of Joint Director

of Agriculture in the case of urban markets. Whereas Deputy Director of Agriculture

in the case of rural markets as Market Secretary (MS) to look after the affairs of the

market. An Assistant Secretary (AS) in the cadre of Assistant Director of Agriculture

will also be provided for each market. The posts of AS have been filled in all the

markets and the post of MS has been filled in the case of Maradu and

Muvattupuzha markets. Table 43 New Markets


Value (000’ Rs.)

West Europe

Anayara 15/12/2000 19/03/2001 AS Application for 23 shops received Nedumangad 05/05/2001 AS Maradu 12/11/1999 25/07/20 AS

18/12/2000 MS EC constituted. Application for 15 stalls received

Muvattupuzha 07/06/1999 14/07/1999 AS 27/03/2000 MS

65 stalls rented out. Muvattupuzha General Marketing Society has started business. The District Collector is examining the possibilities of shifting a portion of existing trade to the market.

Vengeri 05/05/2000 19/04/2000 AS There are 92 stalls in the market. Fifty -one stalls have been leased out on an interest free deposit ranging from Rs. 1,71,000 to Rs.2,60,000 and a monthly rent ranging from Rs.1,500 to Rs.3,500. Thirty-eight stalls have b een allotted to the Kerala State Warehousing Corporation for storing copra procured for NAFED

Source: Department of Agriculture, Govt. of Kerala

4.10 Other infrastructural facilities The state has good infrastructural facilities like roads, power, water etc. The state has

three airports at Thiruvanthapuram, Kochi and Kozhikode. The first two named have

facilities of cold room for handling perishable horticultural produce. The state also

has a well-developed port at Kochi. KINFRA has developed Food Parks, Export

Promotion Zones and Industrial Parks for setting-up of industry.

4.11 Credit availability in the state

The following financial institutions are active in Kerala:

§ Commercial Banks

§ Regional Rural Banks


§ District Cooperative Banks

§ Service Cooperative Banks (PACs)

§ Kerala State Cooperative Agriculture and Rural Development Bank

§ Rural Development Banks

§ Kerala State Cooperative Banks

§ Urban Cooperative Banks

All these financial institutions have good network of branches all over the state and

there is adequate availability of credit. NABARD is also providing refinance for

Farming/Agro Processing/Agri Infrastructure projects at a concessional rate.

The banks provided agricultural credit of about Rs. 1,534 crores in the year 1997-98.


5 KERALA’S PRODUCTION AND EXPORT S OF HORTICULTURAL CROPS

The warm humid tropical climate, with annual rainfall of above 3000mm distributed

over long duration and the topography ranging from 0 to 2000 mtrs. above sea level

makes Kerala conducive for the growth of a variety of tropical horticultural crops

throughout the year with supplementary irrigation. The production of fruits,

vegetables and flowers has been discussed separately in three sub-section of this

chapter.

5.1 Production of fruits

The total area under fruit cultivation in the state of Kerala in the year 2000-01 was 3.2

lacs ha. There has been gradual increase in the area during last decade as in the

year 1992-93; the area was only 2.4 lacs ha. The district-wise area under various fruits

is given in the 44.

Table 44 Area under fresh fruit production (2000-01) (Area in hectares)

S. No. Districts Jack

Mango

Banana

Other

plantain Pineapple

Papaya

Other fresh

fruits Total

1 Thiruvanthapuram 6402 6778 2149 5615 294 839 516 22593

2 Kollam 6877 5972 1743 4293 573 983 332 20773

3 Pathanamthitta 2967 1601 1975 2131 234 550 710 10168 4 Alappuzha 2994 5849 595 2777 107 932 891 14145

5 Kottayam 4885 3179 2885 4193 516 990 743 17391

6 Idukki 5703 2706 1306 3922 1322 594 733 16286

7 Eranakulam 4431 4886 4737 4364 5762 1294 1076 26550

8 Thrissur 5447 7090 2810 5720 334 1288 1708 24397

9 Palakkad 4998 8040 5931 4770 142 1102 1070 26053

1 0 Malappuram 9106 11605 7136 4098 400 1801 1176 35322

1 1 Mozhikode 11228 11313 1839 3375 413 1569 100 5 30742

1 2 Wayanad 11320 5409 8935 2152 6 3 368 817 29064

1 3 Kannnur 14699 13598 2035 4387 440 1230 1107 37496

1 4 Kasaragod 2641 2545 983 2556 9 2 526 687 10030

Total 93698 90571 45059 54353 10692 14066 12571 321010

Source: Department of Economics and S tatistics, GOK

The major fruit in Kerala are banana & plantain, which are used as vegetable, fruit

as well as for processing into chips. Other important fruits grown in the state are

mango, pineapple, papaya and Jackfruit.

The production of major fruits in the state for the year 2000-01 is given in the table 45:


Table 45 Quantity of fresh fruit production (2000-01) (in MTs)

S. No. Districts Jack

(Nos. in million nuts) Mango

Banana

Other

plantain Pineapple

Papaya

Total

1 Thiruvanthapuram 2 5 21630 13668 40817 1886 5525 83526 2 Kollam 2 4 22034 10253 31683 4932 914 69816 3 Pathanamthitta 1 3 10884 13354 19439 1282 3038 47997 4 Alappuzha 7 17130 4134 21992 495 4636 48387 5 Kottayam 1 8 12771 25340 42079 3151 7131 90472 6 Idukki 2 0 11396 12372 41265 13889 1479 80401 7 Eranakulam 1 6 12621 31880 35790 47998 6265 134554 8 Thrissur 1 9 17574 20138 26849 2014 5633 72208 9 Palakkad 1 8 29802 40376 33035 745 7306 111264

1 0 Malappuram 3 1 29962 48464 24447 2558 7779 113210 1 1 Kozhikode 2 5 12846 15500 23140 2451 1020 54957 1 2 Wayanad 3 3 9235 67547 19078 236 2457 98553 1 3 Kannnur 5 0 40174 16436 24756 2098 6588 90052 1 4 Kasaragod 1 4 11576 8493 19325 864 3237 43495

Total 313 259635 327955 403695 84599 63008 1138892 Source: Department of Economics and Statistics, GOK

5.2 Vegetables production in Kerala

A wide variety of vegetables are grown in Kerala. The important vegetables are

tapioca, minor tubers (Amorphophallus, Colocasia, Diascorea and Colus),

drumsticks, bitter gourd, snake gourd, okra, cucumber, pumpkin, ash gourd, green

chillies, brinjal etc. Winter season vegetables like cabbage, carrot, cauliflower etc

are grown in high altitude regions of the state namely Wayanad, Idukki and

Palakkad. The district-wise statistics of area and production of all the above-

mentioned vegetables are not available. However, information available for some

vegetables is presented in table 46:

Table 46Area under vegetable production (2000-01) (Area in hectares)

S. No. Districts Drum-

sticks Tubers

Sweet Potato

Tapioca

Bitter gourd

Snake gourd Okra Brinjal

Amar- anthus

Other veg.

Total

1 Thiruvanthapuram 2226 1703 5 6 27084 6 7 9 3 5 9 1 6 8 8 739 32131

2 Kollam 1558 5640 2 26484 8 6 1 6 165 124 518 641 35234

3 Pat hanamthitta 580 3677 - 7681 127 146 3 4 5 4 7 9 730 13108

4 Alappuzha 834 2192 1 4843 133 7 7 1 1 2 8 157 645 8921

5 Kottayam 898 1489 3 8749 246 215 1 4 4 9 2 9 965 12657

6 Idukki 562 1935 5 7794 286 1 9 1 1 2 0 4225 14848

7 Eranakulam 927 992 1 2 5208 191 130 4 6 6 1 102 994 8663

8 Thrissur 1289 802 3 1637 110 3 3 4 0 1 7 7 5 741 4747

9 Palakkad 1658 2553 369 6646 212 109 415 299 101 8559 20921

1 0 Malappuram 2474 2433 260 7508 125 4 0 7 6 4 2 6 0 2286 15304

1 1 Kozhikode 3297 1822 5 4037 2 7 1 2 - 1 5 539 9745

1 2 Wayanad 890 1727 1 2 1620 100 2 3 3 3 716 5076

1 3 Kannnur 1798 1094 2 2 3945 8 1 8 2 9 2 2 6 7 1032 8098

1 4 Kasaragod 641 390 6 6 1373 2 6 - 3 0 9 2 8 997 3560Total 19632 28449 816 114609 1817 871 933 735 1342 23809193013

Source: Department of Economics and Statistic s, GOK


It can be seen from the table that tapioca in the most popular vegetable

occupying about 60% of area under cultivation. Minor tubers and drumstick follow

this. Area under other vegetables is very little, bitter gourd account for only 1% and

others even less than 1%.

In mid 90s, the area under cultivation of vegetables was around 70,000 ha only and

imports from neighbouring states were increasing. Kerala Government noticed this

trend and started various developmental projects. The year 1997-98 was declared

as a “Harita Year” and organizing farmers into “Harita Sanghams” started massive

programs for commercial cultivation of vegetables in selected areas. The good

achievements under the project every year has resulted in present level of area

under vegetable cultivation, which has more than doubled during last 5 years.

The production of major vegetables in the state is given in the table 47:

Table 47 Quantity of vegetable production (in MT)

S. No.

Districts

Drumsticks

Tapioca

Sweet Potato

Total

1 Thiruvanthapuram 3590 468213 635 472438

2 Kollam 2849 566274 2 2 569145

3 Pathanamthitta 596 167849 - 168445

4 Alappuzha 930 81313 1 2 82255

5 Kottayam 493 256831 2 4 257348

6 Idukki 738 267112 5 7 267907

7 Eranakulam 726 15455 9 135 155420

8 Thrissur 1749 41524 3 2 43305

9 Palakkad 2205 136341 3403 141949

1 0 Malappuram 2588 185143 2992 190723

1 1 Kozhikode 1313 88366 5 7 89736

1 2 Wayanad 718 54917 140 55775

1 3 Kannnur 1371 90706 250 92327

1 4 Kasaragod 959 27755 1204 29918

Total 20825 2586903 8963 2616691

Source: Department of Economics and Statistics, GOK

5.3 Causes of low yield in the state

The productivity of the major fruits and vegetables cultivated in Kerala is extremely

poor when compared with the leading states in India and countries in the world. The

summary is given in the table 48:


Table 48 Productivity of key crops in Kerala vis-à-vis best in India and world (MT / ha)

S. No.

Particulars Kerala Best in India

Best in world

1. Banana 8 60 – Maharashtra 45 – Costa Rica 2. Pineapple 8 28 – West Bengal 45 – Mexico 3. Tapioca 22 41 – Tamil Nadu 25 – India

Source: Cebeco field survey

It can be seen from the table 48 that in case of pineapple and banana the

productivity in Kerala is extremely poor. The reasons for the same are many. Firstly, in

Kerala system of mixed cropping is practiced, crop like pineapple is grown in the

plantations of rubber or cocoa, which do not permit full sunlight to the former. This

pattern is followed randomly in the state, without knowing the complimentary or

antagonistic effects of crops on each other, which results in lower yield. The reasons

of lower yield are the antagonistic effect of one on the other crop.

Specific nutrient requirement of each crop, which can’t be fulfilled when, planted

under this system.

Adverse effect of Shade

Crop specific agronomic practices like irrigation, hoeing etc can not be

undertaken. These problems can easily be overcome by the scientific crop selection, which will

be complimentary to each other. Mono cropping can also be more remunerative.

Further, mixed cropping makes use of crop specific agronomical practices difficult.

In Kerala farmers still grow ethnic varieties of Banana like Nendran, Palayankodan,

Poovan etc., which are having low productivity as compared to exotic varieties.

Even though high yielding tissue cultured plants can be used for these varieties too

the usage in very little. In case of pineapple, low yielding ‘Mauritius’ is preferred over

‘Kew’, which can give almost double yield. In case of Tapioca, the state of Tamil

Nadu is much ahead of Kerala even though cultivation in Tamil Nadu started on

large scale only in the nineties. In fact, farmers in Kerala are in a vicious cycle, low investment in planting material

and other inputs, poor crop management that leads to poor productivity.


For crops like banana and tapioca, India is world leader (India’s productivity almost

equal to Columbia and Ecuador in case of banana therefore, it should not be

difficult for Kerala to improve its production technology. With use of scientific

cultivation technology states like Maharashtra and Tamil Nadu have achieved very

high productivity in banana. The scientific production practices and plant

protection measures of these crops are given in Annex 2.

5.4 Floriculture in Kerala

Even though Kerala based well known companies like “AV Thomas” and “Beena

Nursery” started export of live young plants, ornamental plants, cut flowers etc.

several years back, at present state does not find a place in the horticulture map of

India. In the matter of flower production, Karnataka leads with 34% of the total

production in the country followed by Tamil Nadu with 25%, Andhra Pradesh,

Maharashtra and West Bengal also have significant presence. Kerala is not a

producer of traditional flowers like Jasmine, Marigold, Nerium and cut flowers like

rose, gladioli, tuberose, aster, golden rod etc. Nearly 95% of the demand in Kerala

for the traditional flowers is met by neighbouring states of Karnataka and Tamil

Nadu. Small quantity of local supplies in form of Jasmine from Alappuzha and

Palakkad are prevalent.

However, the state has a significant presence in the production of modern flowers

like orchids, anthurium ornamental foliages and cut foliages.

The reason for Kerala’s insignificant role in floriculture is high rainfall, high humidity

and the undulating topography of the garden and dry lands with its covering of tree

crops, hinders quality and duration of sunlight falling on ground. Neighbouring states

like Karnataka and Tamil Nadu have large stretches of plain lands with bright

sunlight throughout the day supplemented by low humidity and ideal temperature

for floriculture.

The production of floricultural products is largely in the hands of small farmers who

undertake this for supplementing their income. For promotion of such activities there

are several societies in the state like Federation of Indian florists at

Thiruvanthapuram, Kerala cut flowers producers’ society, Thiruvanthapuram,

Farming Tr ust of India Palakkad, the Vanitha Pookrishi Sahakarana Sangham. Even

AVT group had also started cultivation of orchids through women’s group and


projects was known as AVT-Vanitha but the operations had to be closed as AVT

found it difficult to market the flowers. There are a few other small floriculture

projects in the state namely Kerali Orchids at Ernakulam, Sterling Orchids at

Palakkadd, Carnation Orchids at Ernakulam Team Flowers, an anthurium project at

Palakkad. A few others are Hafi Orchids at Kolamseri, Toyo Floriculture at Quillon,

Palakkad District Cut Flower Growers Association at Palakkad.

The floriculture units set-up in the state are not doing well and are catering to

domestic market only for high value flowers like anthurium. Very small quantities are

being exported. Even in domestic market, the units started having marketing

problem after large projects like Natural Synergy in Karnataka started production.

Kerala has a climatic edge in the rearing of orchids and anthurium. In other states,

these flowers are grown in protected environment and cost of production is high. In

Kerala, these are grown under shade of coconut tree. But as farmers don’t follow

the proper fertilizer application schedule, the growth of flower is poor and there is

lack of standardization because of which flower is not exports worthy.

The export of flowers to gulf and western countries from Thiruvanthapuram airport for

the year 2000-01 was about Rs. 11 lacs, which had increased from export of Rs. 2.4

lacs in 1998-99.

5.5 Marketing of horticulture produce in Kerala With the increase in incomes and awareness regarding nutritive value and

importance of fruits and vegetables in diet the demand for the same has increased

in recent years and it will continue to do so in near future as the present

consumption levels are quite low.

The total arrivals of fruits and vegetables in markets of Kerala are estimated at about

14 lacs MT annually. Eranakulam district tops the list by handling 2.35 tons of these

commodities each year. Thiruvanthapuram, Thrissur and Palakkad districts receive

over 1.4 lacs tons per annum. Eranakulam Corporation market handles the

maximum with 1.65 lac tonnes of annual arrivals. The urban market at Palakkad,

Thiruvanthapuram and Thrissur handle over one lac ton individually in a year. The

commodity group-wise annual trading in the state is estimated as follows:


Vegetables : 7.13 lacs MT

Banana : 5.26 lacs MT

Other Fruits : 1.65 lacs MT -------------------

Total 14.04 lacs MT

Of the 7.13 lacs tons vegetables (excluding tapioca & other tubers) traded in the

state about 5 lacs tons (68%) comes from the neighbouring states viz. Tamil Nadu

and Karnataka. In case of fruits, out of total arrivals of 1.66 lacs tons on 0.4 lacs tons

(25%) are reportedly procured from within the state. However, only in case of

pineapple, jackfruit and mango, the state has marketable surplus. Pineapple in

particular is sold to all parts of India regularly. According to leading traders of

pineapple at Vazhakulam market, the major market of pineapple in Kerala; about

11,750 Lorries of pineapple are sent out of Kerala every year, the break-up for

various states/cities is given in table 49:

Table 49 Estimated dispatches of pineapple from Kerala

S. No.

State/City No. of Lorries/Year

1. Bangalore 1,200 2. Mumbai & Pune 6,000 3. Gujarat 700 4. Delhi 350 5. Andhra Pradesh 2,000 6. Chennai 1,000 7. Madhya Pradesh 350 8. Rajasthan 150

Total

11,750


Considering the weight of each lorry as 9 MT, the dispatches of pineapple to other

states aggregate to about 1 lac ton. In case of Banana, out of arrivals of 5.28 lacs

tons annually in Kerala, only about 3 lacs tons per year that comes to the market of

Kerala is sourced from within the state. From the above, it is clear that there is overall

acute shortage of fruits and vegetables in the state.

It has been also informed that producers of fruits and vegetables retain about 10%

of some major products for the domestic consumption and remaining is sold in the

market.

5.6 Supply Chain

There is long supply chain of producers, consolidators, sub-agents, agents,

transporters, merchant exporters, wholesalers, retailers etc. before the commodity


reaches end users. The various functionaries involved in the production, collection,

exports distribution/marketing of fruits and vegetables are:

§ Farmers

§ Self help groups / Growers’ societies

§ Pre-harvest contractors

§ Village merchants

§ Commission agents

§ Wholesale merchants (urban & rural)

§ Exporters

§ Retail traders / hawkers

§ Public Sector Organizations – VFPCK, KHDP, HORTICORP, Maveli (Civil supplies

corporation)

§ Processing units

A brief description of various functionaries and their role is given in the following

paragraphs.

5.6.1 Farmers

The farmers growing fruits & vegetables are starting point of the chain. Most of the

farmers are small; some have own land whereas others cultivate leased lands.

There are different ways by which farmers sell their produce. The small farmers sell

their produce to local retailer or nearby wholesaler. Sometimes, there are agents in

the village who consolidate their produce and sell to agents in urban centers. In

some villages, there are self-help group of farmers where the produce is

consolidated and taken to market. Some agents/ traders also buy the produce from

farm.

A recent trend noticed is that some of the large-scale producers have direct link

with the commission agents/traders and the produce is directly taken to the

wholesale markets bypassing the intermediaries.

5.6.2 Self Help Group / Sangams / Cooperatives

In Kerala a very successful model developed under EU aided Kerala Horticulture

Development Program where in some 2000 Self Help Group of farmers growing fruits

and vegetables have been organized. The produce of all the members is pooled


together and taken to market/mandi for auction. This eliminates a number of

intermediaries besides farmers get a fair price. The state department of agriculture

has also promoted “Sangams” of vegetables growers. Similarly, there are co-

operative societies of farmers growing/selling horticultural produce.

5.6.3 Pre-harvest contractors

In certain villages, local merchants or traditional money lenders act as pre-harvest

contractors and advance money to the needy farmers and collect produce from

them usually at a lower rate then prevailing market rates. These merchants collect

the produce from different holdings and sell it to the primary wholesalers in urban or

rural markets.

5.6.4 Village merchants

The small village merchants collect the produce either direct from the farm holdings

or from the nearest mandi or primary markets and sell the produce to the wholesale

merchants and retail merchants in the primary markets.

5.6.5 Commission agents

Commission agents act as a lin k between the sellers and buyers. They arrange to

collect and deliver the produce to the wholesalers, exporters or processors. For

commodity like pineapple, tapioca, tubers etc. which are sold to far off markets,

commission agents play a very important role.

5.6.6 Wholesale merchants

They are the most important functionaries in supply of fruits and vegetables. They

bring the produce either from other states through commission agents / wholesalers

or from rural markets. For some commodities they buy through auctions also and

further sell to retailers / hawkers.

5.6.7 Exporters

More than 100 exporters, largely based at Thiruvanthapuram followed by

Eranakulam and Kozhikode are engaged in the export of vegetables and fruits to

foreign countries especially to gulf countrie s. Exporters have collection points of fruits

and vegetables in production centers and their agents operating in these collection

points, purchase and transport produce to the exporter’s premises sufficiently ahead

of the flight departure timings. The produce is graded and packed before exports.


5.6.8 Retail traders / hawkers

Retailers are important link in the chain as consumers generally buy from them.

Retailers have their own shops; some occupy open space in the market yard or

roadside and exhibit the produce in small heaps. Hawkers carry head-load of fruits

and vegetables or used rickshaw / pushcart for reaching to the customers.

Generally, they try to finish their stock at end of the day.

5.6.9 Co-operative societies

Marketing societies also play a role in the marketing of vegetables in the state. They

procure or purchase vegetables and fruits mainly from their grower members and

sell directly to the consumers availing only a small margin for meeting their

operational expenses. There are around 10 societies successfully operating in the

state, the notable ones are Regional Fruit and Vegetable Producers Co-operative

Society. Thaliparamba (Kannur), Kuruppumthara Fruits and Vegetables Marketing

Society (Kottayam), Thrissur Fruits and Vegetables Marketing Society.

5.6.10 Public sector organizations

Due to increasing gap between supply and demand of fruits and vegetables in the

state, the Kerala Government had planned several interventions like the EU aided

Kerala Horticulture Development Programme (KHDP), the Kerala State Horticultural

Products Development Corporation (HORTICORP). For this purpose Kerala State Civil

Supplies Corporation (KSCSC) and women owned sales outlets by Women’s

Development Corporation were also helpful.

Even state agriculture department also organizes sales of vegetables during festivals

by procuring vegetables from “Harita Sangams” promoted by them in the state. The

main defective behind this activity of the department is to check the hike in open

market prices of vegetables and to make available quality fresh vegetables to

consumers at reasonable prices during Onam Season.

5.7 Pattern of arrival and price of fruits and vegetables

The information on arrivals of major fruits & vegetables and price pattern over a year

was studied for state’s major market viz. Thiruvanthapuram. The details are given in

table 50 and the graphs.


Table 50 Monthly price and arrival of some fruits & vegetables in Thiruvanthapuram wholesale market, Year 2001

(Arrival – MT / Month, Price - Rs. / Q) Banana Pineapple Okra Bitter Gourd Month

Arrival Price Arrival Price Arrival Price Arrival Price January 1326 675 166 675 429 756 250 1441 February 1498 586 153 603 441 772 266 1199 March 1837 548 171 754 520 621 364 1059 April 1289 532 149 687 363 700 224 1417 May 1602 651 225 908 490 724 293 1549 June 1623 598 171 923 507 753 284 1590 July 1888 542 220 905 547 574 245 1586 August 1350 708 183 983 603 564 283 1389 September 1302 799 222 887 508 729 246 1546 October 1543 758 240 1032 666 743 354 1433 November 1540 694 295 1064 565 866 428 1339 December 1541 717 388 933 627 571 462 1038

Source: NHB Monthly Reports

Figure 1 Arrival of Major fruits and Vegetables in Thiruvanathapuram

Price pattern of Major fruits and Vegetables in Thiruvanathapuram

0200400600800

100012001400160018002000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Arr

ival

s [

MT

s/M

on

th]

Banana Pineapple Okra Bitter Gourd

0200400600800

10001200140016001800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Pri

ce [

Rs.

/Qn

tl.]

Banana Pineapple Okra Bitter Gourd


It is clear that the availability of banana, pineapple, okra and bitter gourd is round

the year. Only in case of banana the fluctuations can be observed in arrivals – peak

arrivals in February, March and July and low arrivals in the months of January, April,

August and September. As far as prices are concerned, the fluctuations across the

year have been only marginal and prices were more or less stable for most of the

year.

The prices of banana, okra, bitter gourd and green chillies in Thiruvanthapuram

market were compared with those of Chennai Market (the nearest major market) to

see state’s competitiveness for exports. It can be seen from the table 51 and graphs

below that except for okra, the prices of remaining fruits and vegetables, in Chennai

market are 30-40% lower. This is due to the fact that Tamil Nadu is a surplus state for

fruits and vegetable and it is despatched to Kerala in large volumes. Interestingly, in

case of okra, the prices were lower in Thiruvanthapuram market during most of the

months. This may be due to the fact that local consumption of okra is low and it is

largely cultivated for export purposes. It is noteworthy that the prices of okra in

Kerala were found to be very competitive when compared to prices in other major

markets of India. Therefore, okra merits special attention as an export-oriented

vegetable from Kerala.

Table 51 Comparison of prices of some fruits and vegetables between Thiruvanathapuram and Chennai market (Year 2000)

(Prices - Rs. / Q) Thiru. Chennai Thiru Chennai Thiru Chennai Thiru Chennai Fruits/Vege.

Banana Okra Bitter Gourd Green Chillies Jan 693 388 647 1032 1265 949 1027 746 Feb 665 365 619 883 1205 838 955 667 Mar 616 374 674 934 1184 602 908 756 Apr 598 356 565 634 1409 688 897 866

May 616 386 579 551 1587 778 1276 1005 Jun 562 398 641 443 1881 690 1106 707 Jul 564 405 693 699 1685 782 984 840

Aug 744 418 686 807 1360 726 959 1001 Sep 784 439 622 512 1439 606 944 838 Oct 658 417 589 526 1813 718 1044 802 Nov 762 406 761 585 1486 562 942 442 Dec 658 410 754 762 1463 796 936 451



Thiruvanathapuram

Chennai

The prices of pineapple for three years in the major pineapple markets of Kerala are

given in Table 52. It is clear from the price trends that over last three years, the

prices of pineapple have increased. Throughout the year the prices have been

above Rs. 5.50/kg. Due to this reason, the local pineapple-processing unit has not

been able to process the pineapple, as at these prices, it is not commercially

viable. However due to good quality of pineapple there is good demand for it from

all over the country. Like wise the prices of Tapioca in Thrissur Market is also given

in table 53. The prices fluctuate from Rs 3 to 4.50 per kg.

0200400600800

1000

1200

Jan

Feb

Mar

Apr

May Jun

Jul

Aug

Sep Oct

Nov

Dec

Month

Pri

ce

Banana Okra Bitter Gourd Green Chillies

0

500

1000

1500

2000Ja

n

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep Oct

Nov

Dec

Month

Pri

ce

Banana Okra Bitter Gourd Green Chillies


Table 52 Monthly average prices of pineapple (ripe) for the last three years in Vazhakulam market of Ernakulam district (Price - Rs. / kg)

MONTH 1999 2000 2001

Jan

7.19 3.49 5.64

Feb 6.50 5.33 6.10

March 6.26 6.20 5.50

April 7.00 4.67 7.72

May 4.47 6.28 6.54

June 3.25 7.02 6.13

July 5.55 5.46 6.92

Aug 5.54 5.38 8.50

Sept 6.69 4.60 6.55

Oct 4.55 3.82 7.19

Nov 3.26 5.82 8.96

Dec 5.73 4.64 5.47

Source: VFPCK

Table 53 Wholesale price (Rs./Kg) of Tapioca in Thrissur Market (Jan. 1999- Sept. 2002)

Months 1999 2000 2001 2002

Jan 3.27 3.98 4.00 3.06

Feb 3.50 3.92 4.00 -

March 3.50 4.00 3.67 3.50

April 3.50 4.00 3.29 3.50

May 3.5 0 3.85 3.08 3.18

June 3.58 3.90 2.97 3.65

July 3.50 3.76 3.07 4.00

Aug 3.50 3.86 3.22 4.38

Sept 3.72 3.95 3.50 4.50

Oct 3.72 4.00 3.17 -

Nov 3.88 4.08 3.37 -

Dec 4.00 4.00 3.04 -

Source: Vegetable & Fruit Promotion Council Keralam

5.8 Current status a nd prospects of exports of horticultural products from Kerala In this section, the present status of exports of fruits, vegetables and floricultural

products from Kerala and the potential for the same has been discussed.

Pineapple - prices (Rs/kg)

0123456789

10

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

June July

Augu

st

Sept

embe

r

Oct

ober

Nov

embe

r

Dec

embe

r

Months

Rs/

kg

199920002001

Tapioka - Prices (Rs/kg)

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Jan

Feb

Mar

ch

Apr

il

May

June

July

Aug

Sep

t

Oct

Nov Dec

Months

Rs

/Kg

1999200020012002


The current level of exports of fruits and vegetables from Kerala is about 25,000 MT.

About 80% of the volume is exported from Thiruvanathapuram airport, and

Ernakulam airport and Kochi port account for about 10% and remaining (about 2500

MT) is exported from Kozhikode airport. The build-up of the exports volumes of fruits &

vegetables from Thiruvanathapuram airport is given in table 54:

Table 54 Exports of fresh fruits & vegetables from Thiruvanathapuram airport

Year Quantity (MT)

1990-91 6,754 1993-94 10,217 1998-99 17,044 1999-00 21,951 2000-01 18,972 2001-02 20,036

Source: KSIE

The average increase in exports is about 12% per annum. The experts attributed this

to the increase in number of international flights from Thiruvanathapuram. At

present, the available cargo capacity is being fully utilized and with the increase in

number of flights from Thiruvanathapuram, the exports can be further increased. The

dip in the exports from Thiruvanathapuram airport in 1998-99 was due to

cancellation of 6 gulf flights from Thiruvanathapuram airport as the Air-India wanted

to promote Kochi airport and it did result in shifting some exports to the later.

However, exporters prefer Thiruvanathapuram as the exit point, due to availability of

better quality plantation in South Kerala, therefore, some of them started patronizing

foreign airlines. The value of current level of export of fruits and vegetables from

Kerala is about Rs. 50 crores. Fruits & vegetables from Kerala are exported to gulf

countries and other western countries. The important gulf countries importing

vegetables and fruits from Kerala are Dubai, Abu Dhabi, Saudi Arabia, Kuwait,

Bahrain, and Sultanate of Oman & Qatar. Small quantities of specified items are also

exported to Western/European countries like Amsterdam, Australia, London,

Frankfurt, Paris, Toronto etc. Dubai is the major importing country. Winter season

vegetables like cabbage, carrot, cauliflower, beans along with banana and

pineapple are also exported to Maldives. Of the total quantity of fru its and

vegetables exported more than 60% is Banana (both green & ripe). The varieties of

Banana having export demand include Nendran, PalayinKodan, Rasthali and

Poovan. The other fruits exported are pineapple, jackfruits and green Mangoes.


The vegetables include tapioca, bitter gourd, drumstick, cucumber, snake gourd,

okra, green chillies, curry leaves, brinjal etc. bulky items like tapioca,

Amorphophallus and other minor tubers are being exported through ship from Kochi

port. Recently export of drumstic ks to Germany has started from the state and

volumes are expected to increase. The value-added products include wafer of

banana & Jackfruit, pickles etc.

5.9 Export of Floricultural Products In spite of Kerala having tremendous climatic advantage in the rear ing of orchids

and anthurium and variety of ornamental foliage, it has not been able to penetrate

the export market and sales have remained confined to metro cities of India only.

Very small quantities of cut flowers, ornamental foliage, cut foliage etc are exported

to gulf countries. The value of exports from Thiruvanthapuram airport during the

years 1998-99, 1999-00, 2000-01 has been Rs. 2.39 lacs, Rs. 3.00 lacs and Rs. 11.00 lacs

only. Although, the precise information for total exports of floriculture products from

Kerala is not available, considering some exports from other airports too, the value

of exports from Kerala is less than Rs. 25 lacs annually.

5.10 Present constraints and potential for growth

The reason for regular and sizeable exports of fruits and vegetables in gulf is Indian

Diaspora who needs ethnic vegetables & particular varieties of banana. The

population of NRIs in major gulf countries is given in the table 55:


Indian Diaspora in Gulf Countries

Table 55 Estimates of Indian Migrants in the Gulf Region, 1975-1999

Source: Ministry of External Affairs

Table 56 Percentage of NRIs in the total population of main Arab countries in Year 2000

Source: Ministry of External Affairs

According to the estimates of ministry of external affairs about 50% of NRIs are from

Kerala and another 15-20% from southern states like Andhra Pradesh, Tamil Nadu

and Karnataka. Therefore, the demand for certain fruits and vegetables is regular.

The major constraints faced by exporters of fruit and vegetables in Kerala are:

§ High air-freight charges

§ No knowledge of appropriate post -harvest practices

§ Lack of availability of fruits and vegetables in the state

§ High prices


High landed cost of India products

As mentioned earlier the most important destination for the exports of fruits and

vegetables from Kerala is gulf countries viz. countries like UAE, Saudi Arabia, Bahrain,

Kuwait and Qatar. As banana and plantain account for 60% of exports, the

information on prices on the same from various sources of origin was compiled and

is presented in table 57:

Table 57 Landed prices of banana in Major Middle East countries from various countries of origin

(Rs. per kg in 2002)

Market Origin March April May June July August

Bahrain Philippines 26.71 24.17 - 30.53 24.17 27.98 Kuwait Philippines 44.64 37.20 - 38.69 32.74 32.74

Ecuador 34.45 32.50 - - - - Philippines 32.50 29.64 - 29.25 27.30 27.95 Yemen 21.45 22.75 - 20.54 17.55 14.95

S. Arabia

India 76.05 76.05 76.05 76.05 76.05 76.05 Philippines 29.25 30.29 - 30.29 24.44 26.65 UAE India 78.00 78.00 78.00 78.00 78.00 - Philippines - - - 49.24 - - Qatar India - - - 79.20 - -

Source: AIC, FICCI

The prices in the markets of gulf countries indicate that the supplies from Philippines

are very cost competitive. This is attributable to export of banana to these countries

by the use of marine transport, which is very economical. India is in a position to

export some quantities at high prices due to some ethnic varieties, which are

preferred by Indian expatriates. India can only increase its volumes if exports are

affected through marine transport. The present airfreight charges Rs. 26 to 40 per kg

are more than the landed cost of banana from Philippines.

Countries like Thailand and Malaysia have also perfected the protocols for transport

of pineapple and mango through low cost reefer containers and are gradually

capturing the market hitherto controlled by India. Therefore, it is absolutely

necessary that appropriate post harvest protocols be developed for transportation

of fresh fruits through marine transportation. Compared to value of the product, the freight charges are indeed very high which

can be seen from the table 58:


Table 58 Airfreight charges from Thiruvanthapuram airport to major export destinations

(Rs./Kg.) Damam Dubai Abu Dhabi Muscat Bahrain Kuwait Doha

Thiruvanthapuram 37 34 34 32 40 40 40 Kozhikode 37 25 25 - 38 - 38 Kochi 30 29 29 29 38 41 -

Source: KSIE

High freight charges make the landed costs high and even though Kerala is a

monopoly supplier of some items, the fruits & vegetables being price-sensitive, there

is an adverse effect on demand. While reduction in airfreights can’t be expected,

use of high -speed marine transport; C.A. containers and use of appropriate post-

harvest technology would be needed. One of the leading exporters lamented that

when he tried exporting pineapple through ordinary container, there was a quality

problem and he incurred loss of Rs. 3.00 lacs. It was reported that Malaysia and

Thailand are using marine transport for export of pineapple to gulf countries and

India has lost the market due to price competition even though Indian pineapple is

better.

The exporters were confident that they could recapture the market if they could be

helped in successfully exporting the pineapple through marine transport. Philippines

has started export of banana to gulf countries through use of CA containers.

The problems of availability of fruits & vegetables and high price are related. Since,

there is acute shortage of fruits & vegetables in the state, the supplies come from

the neighbouring states. Even exporters are sourcing supplies from Tamil Nadu. This

result in increase in prices due to a large number of intermediaries involved and

quality also gets affected due to long distance transportation and lack of direct

supervision. The exporter opined that Kerala has lost tapioca market to Sri Lanka and

Tamil Nadu, on account of prices.

The exporters had shown keen interest in developing backward linkages provided

some land was made available to them. Exporter had also shown interest in working

with farmers, Self Help Groups/Cooperatives in Kerala and to source their

requirements only from within the state. The state has witnessed a growth rate of 10-12% in exports of fresh fruits and

vegetables during last decade and exporters are confident that if appropriate

support measures are taken the growth rate up to 25% could be achieved.


5.11 New Product and Markets For increasing the exports from the state some new product like cut foliage, Banana

wafers and okra have been recommended. The exporters from the state should also

reach out to new markets like UK for okra and major European countries for cut

foliage.

5.11.1 Cut foliage

Tropical Cut Foliage is an important part of florist industry. Cut foliage is used as filler

in bouquets, flower arrangements etc. in combination with cut flowers. Unlike cut

flowers, there is year round demand for cut foliage in Europe, the USA and Japan

through the volume is lower in off-season. The important producers are the USA,

Spain, Kenya and Sir Lanka. During the period of October to April production in the

colder regions is very low whereas demand is high. The cut foliage from Kerala has

many competitive advantages like: § Due to long duration of rains and high humidity; year round production,

particularly during October to April when export demand is high.

§ Investment cost is very low as compared to cut flowers .

§ Risk of damage during transportation is minimum.

§ A variety of foliage grown in Kerala.

§ A number of foliage plants grown in open field conditions in Kerala.

§ Even leaves of coconut, palm and banana, which are by products/waste, have

market in certain countries.

§ The rich forests of Kerala with its diverse flora are a good and cheap source of

cut foliage.

5.11.2 Banana wafers

Banana wafers for exports are being packed in ordinary poly packs and are not

branded. The banana wafers are manufactured by cottage scale units and quality

is inconsistent and shelf life uncertain. Therefore, in order to have growth in exports it

would be desirable to process the banana wafers in organised sector and market in

form of packed and branded product. Similar efforts in case of Indian snacks,

savories, ground spices etc have made a substantial impact. This would also enable

the exporters to enter in quality conscious markets of some European countries.


5.11.3 Okra Besides, Middle East market, okra has good demand in UK, where population o f

Indians and Pakistanis is substantial. Okra is not grown on a large scale in Europe,

therefore, it is imported from various countries like Thailand, Brazil, Gambia, Kenya,

Zimbabwe, Cyprus and SARRC countries. India produces world’s 64% of okra and

there is a vast potential for India to exploit its unique position. The demand for okra in

UK is about 20-30 MT per day and India is in a position to supply okra round the year

at a competitive price; this opportunity needs to be exploited. Within India Kerala is

very competitive. However, a special variety of baby okra needs to the promoted,

which is preferred by the overseas consumers.


6 SWOT ANALYSIS

The strengths, weakness, opportunities and threats for the export of floricultural

products from Kerala is presented below:

6.1 Strengths

§ Good climate, which enables round the year production/availability of fruits,

vegetables and flowers.

§ Rains spread over 6-8 months in most parts of Kerala. Drought situation rare.

§ High literacy, new ideas / innovations adopted fast.

§ Excellent infrastructural facilities airport, food parks, markets etc.

§ Proximity to export markets like gulf countries Sri Lanka, Maldives & Mauritius.

§ Sizeable population of non-resident Indians in above-mentioned countries.

§ Kerala produces some unique products like Nendran banana, table variety of

pineapple (Mauritius) and some minor tubers, which have good export potential.

§ Varieties of foliage plants can grow under natural conditions.

6.2 Weaknesses

§ High wage rates.

§ Very small land holdings.

§ High price of land as well as lease rental.

§ High population density, which creates deficit of most of fruits and vegetables

and very little marketable surplus, for a few commodities.

§ Prices of most of fruits and vegetables produced in state are high.

6.3 Opportunities

§ Global trade of fresh fruits and vegetables increasing NRIs of Kerala origin

patronize produce of Kerala because of its distinct quality.

§ With use of appropriate post -harvest technology coupled with use of marine

transportation. Kerala can become competitive and recapture the lost-markets

§ Growing demand for cut foliage needs to be tapped.

6.4 Threats

Neighbouring states like Tamil Nadu and countries like Sri Lanka, Malaysia and

Thailand capturing a high share due to high productivity and lower cost of

production.


7 AGRI EXPORT ZONE IN KERALA

7.1 Agri Export Zone Scheme

The Agri Export Zones (AEZ) scheme has been introduced recently by the Ministry of

Commerce for promoting export of specific produce/products grown in a

contiguous area, with the objective of providing remunerative returns to farmers on

a sustained basis by improved access to exports.

7.1.1 The Concept of Agri Export Zone Sporadic efforts have been made in the past for promoting export of agricultural

produce/products from the country. On one hand Research and Development has

taken place with little bearing on the development of a particular agricultural

produce for the purpose of export, on the other hand financial and fiscal incentives

are being provided for exporting a particular produce without actually addressing

pre-harvesting and post -harvesting practices. The concept of Agri Export Zone thus

attempts to take a comprehensive look at a particular produce/product located in

a contiguous area for the purpose of developing and sourcing the raw materials,

their processing/packaging, leading to final exports. Thus, the entire effort is

centered on the cluster approach of identifying the potential products, the

geographical region in which these products are grown and adopting an end-to-

end approach of integrating the entire process right from the stage of production

till it reaches the market. There would also be a need to identify and enlist

difficulties and problems encountered at each stage. These difficulties could be

procedural in nature or may relate to a particular quality standard. A package

needs to be developed to suggest solutions to these problems and

agency/agencies identified to implement these in a given time frame, which forms

the basis of the Agri-Export Zone concept.

7.2 Measures envisaged for promoting exports from such Zone

7.2.1 Financial Assistance

Central as well as State Government and their agencies are providing a variety of

financial assistance to various agri export related activities. These extend from

providing financial assistance for Training and Extension, R&D, Quality Upgradation,

Infrastructure and Marketing etc. Thus, whereas Central government Agencies like

APEDA, Spices Board, National Horticulture Board, Department of Food Processing


Industries, and Ministry of Agriculture provide assistance. A number of State

Governments have also extended similar facilities. All these facilities would have to

be dovetailed and extended to promote agri exports from the proposed Zones in a

coordinated manner. Some addit ional features like providing grants from Market

Access Initiative fund could also be considered.

7.2.2 Fiscal Incentives

The benefits under Export Promotion Capital Goods Scheme, which were hitherto

available only to direct exporters, have now been extended to service exporters in

the Agri Export Zones. Thus, even service provider to ultimate exporters will be

eligible for import of capital goods at a concessional duty for setting up of common

facilities. They shall fulfill their export obligation through receipt of foreign exchange

from ultimate exporters who shall make the payments from their EEFC account. Exporters of value added agri products will be eligible for sourcing duty free fuel for

generation of power, provided the cost component of power in the ultimate

product is 10 per cent or more and the input-output norms are fixed by the advance

licensing committee of the DGFT. In view of the power intensive nature of most of

the value addition, almost all the exporters of value added agriculture produce will

become eligible for such facility. Similarly, input-output norms can also be fixed for

sourcing other inputs, like fertilizer, pesticides etc. duty free for cultivation purpose.

7.2.3 Monetary Incentives

The units in the AEZ can avail concessional loan for infrastructure project like cold

chain through NABARD refinance scheme wherein banks are given refinance @

8.5% and after adding spread of 1.5% to 2% loan interest will work out to 10-10.5%.

Similarly, RBI has recently notified that units in AEZ can avail credit to distribute inputs

to contract growers @ 8.5%.

7.3 Operation of the Concept

The entire approach of promoting the Agri Export Zone would have to be taken on

a project mode. This would mean that the State Governments would need to

identify potential export products that could be selected for development by

adopting a cluster approach. State Governments will have to evolve Projects that

are feasible and capable of immediate implementation. They also have to confirm


to the indicative guidelines. The States will forward such project proposals to APEDA,

which will conduct the initial scrutiny of the proposals. If found feasible, APEDA may

provide necessary guidance, in preparing the detailed project report. This report,

after preliminary scrutiny, will be pla ced before the Steering Committee, which has

been constituted under the chairmanship of Commerce Secretary. Once the

Committee has approved the project proposal of a State, a MOU would be signed

between APEDA (on behalf of the Central Government) and the State Government

for providing possible assistance at each stage of the project. The responsibilities of

the State government would also be defined in the MOU.

The broad steps involved in setting up Agri Export Zones are:

§ Identification of specific products which enjoy good export potential.

§ Selection of a “contiguous geographical location” where the product is

available.

§ Taking necessary steps to strengthen the production, infrastructure, R&D support,

processing and packaging facilities etc.

§ Undertaking intensive market development and promotion efforts.

7.4 Need for AEZ

In keeping with the Government’s new policy, APEDA has proposed setting up of

Agri Export Zones in contiguous areas based on intensity of cultivation/ productivity

per hectare and the total availability.

The value chain for perishable product exports can be summarized as follows:

§ Supply of planting material

§ Production infrastructure

§ Technical know -how

§ Supply of inputs

§ Post Harvest Management (Grading/sorting/packing/storage)

§ Refrigerated transport

§ Marketing

- Exports (including logistics)

- Strengthening of domestic market

§ Marketing tie-ups in foreign markets


Most of the small producers find it very difficult to address all the above issues on

their own. As a result, the farmers are neither being able to maintain consistent

quality, nor able to market at a remunerative price.

Hence, it is important to adopt an integrated approach, under the AEZ model, to

ensure that all aspects of production to marketing are organized in a way so as to

benefit even the small producers besides leading to increase exports.

A suggested model for applying the AEZ approach for promoting exports of

selected products is described in the following section of this report.

7.5 Selection of products Due to Kerala’s very congenial ago-climatic conditions a large number of

horticultural crops are grown and exported. However, as the basic purpose for

setting-up an AEZ is to select a few promising crops and focus development

activities on them. The criterion used for selection of crops is as follows:

§ Volume of existing exports

§ The present production status and state’s competitiveness (productivity, quality,

price product’s uniqueness)

§ Potential for increasing exports.

§ Demand in overseas markets

§ Marketable surplus On the basis of above in the category of fruits, banana and pineapple have been

selected. Banana accounts for about 60% of present exports of fruits & vegetables

and have potential for growth further increase. Kerala is known for its unique

banana varieties like Nendran, Poovan, Palayamkodan which have regular

demand from non -resident Keralites in gulf. Pineapple is the only fruit crop, Kerala

has sizeable marketable surplus. The variety (Mauritius) grown in Kerala is table

variety, which is very juicy and delicious. If through proper post-harvest technology

its shelf life can be extended, the export volume could be increased. In vegetable

category ethnic vegetables like Yarn, Tapioca, Bitter gourd, Okra, Snake gourd,

Drumstick and spring beans have been identified.


In floriculture sector, there seems to be very limited opportunities for Kerala in

traditional cut-flower markets. Flowers of foreign origin like orchids and anthurium

have potential, as agro climatic conditions are suitable.

However, cut foliage exports have very good potential and Kerala has strengths for

cultivation of a variety of plant foliage like Dracaena, Codiaeum, Cordyline etc.

7.6 Project area

The concept of AEZ is based on cluster approach so that interventions can be

focused on potential areas for generating agricultural exports of the identified

products. The areas have been selected using the following factors.

§ Production and productivity of the identified crops

§ Proximity to exit points (airport and port) and availability of export –

infrastructures.

§ Contiguity of the identified districts.

§ Existing pattern of exports

Using above parameters, the districts of Thrissur, Ernakulam, Kottayaam, Alappuzha,

Pathanumthitta, Kollam, Thiruvanathapuram, Idukki and Palakkad have been

identified to constitute the proposed AEZ in Kerala.

About 86 % of pineapple is cultivated in these districts, and these districts account

for about 63 % of banana and plantain cultivated in Kerala.

The districts also have proximity to major exit points from the state namely airports at

Thiruvanathapuram and Cochin and port at Cochin. About 80% of present exports of perishables from the state are accounted by

Thiruvanathapuram airport. Another reason for selection of these districts is large

base of exporters of fruits and vegetables in these cities and existence of EEC

markets where pack houses and storage facilities could be made available. The

proposed AEZ in Kerala is shown in the map on page 65:


Proposed Area for Setting up of Agri Export Zone in Kerala

7.7 Identification of Export Markets

The major export destination from Kerala for perishables at present is gulf countries.

However, with addition of cut foliage, ethnic vegetables and pineapple in the

product mix and use of appropriate post -harvest technology new markets in

Europe, Africa could also be developed besides nearby markets like Maldives and

Mauritius. The present level of exports to these countries for relevant products is

given in tables 59:

Table 59 Exports to Gulf countries (Quantity in MT, Value in Lacs Rs.)

Vegetables Floriculture products

Fruits Countries

Quantity Value Quantity Value Quantity Value Bahrain 3178.12 499.14 - - 484.72 94.08 Kuwait 2954.12 523.48 - - 514.61 136.25 Maldives 3805.62 558.95 - - 208.86 36.08 Oman 1097.51 142.43 0.12 0.40 653.65 129.02 Qatar 2435.24 394.19 - - 418.196 100.74 Saudi Arabia 8218.47 1251.1 - - 1446.96 304.56 UAE 16511.05 2192.46 10.80 5.09 4416.15 920.10 Total 38200.15 5561.75 10.92 5.49 8143.16 1720.82

Source: APEDA export statistics for Agro and Food Products, India 2000-2001


7.8 Export targets for the state

For an overall accelerated development in select horticultural products in the state

of Kerala and to enhance their exports, the following needs to be done:

§ Development of suitable post-harvest technology for enhancing shelf life of

pineapple and banana. So, that these products could be exported using

economical marine transportation, which alone would increase the exports

substantially.

§ Development of a plan by which area under banana cultivation could be

increased in the identified 9 districts of Kerala. So that, the exporters discontinue

sourcing it from Tamil Nadu. Measures for improving productivity and quality of

varieties like Nendran should also be undertaken.

§ Dovetailing of developmental schemes of central Government and State

Government and targeting identified areas and crops in order to have faster

results.

§ A well organized and regulated marketing system where facilities for grading,

packaging and storage are available.

§ Integration of various organizations in the state with well defined role suitable

policy changes for creation of an enabling environment for Agri-exports.

§ Market development activities in the overseas markets.

Under the above strategies, it is felt that, it would be possible for the state of Kerala

to achieve the following targets, given in table 60.

Table 60 Kerala Export Projections

(Qty. in 000’MT and value in crores) Year 1 Year 2 Year 3 Year 4 Year 5 Item

Qty. Value Qty. Value Qty. Value Qty. Value Qty. Value Banana 22 38 25 42 29 46 34 50 40 58 Pineapple 2 4 3 6 4 8 5 10 7 14 Ethnic vegetables

5 8 7 11 9 14 11 ‘17 13 19

Cut Foliage 3 8 4 10 5 13 6 15 7 17 Banana Wafers 1 8 1.5 12 2 16 3 24 4 32 Total 33 66 40.5 81 49 97 59 116 71 140


8 INTERVENTIONS, INVESTMENTS AND SOURCES OF FUNDS

The unique products of Kerala like Nendran, Mauritius pineapple, and ethnic

vegetables already have established market in gulf countries and efforts are

needed for consolidation of Kerala’s position in these markets. Cut foliage offers

new opportunities to Kerala and markets in Europe and USA can also be accessed

besides gulf markets. Similarly, Okra, Bitter gourd, Tapioca and certain tubers have

good market and are also becoming popular in African and European countries

and these markets need to be developed. In this chapter the interventions to be

needed, for increasing export of horticultural products from Kerala, agencies

responsible for the same and financial implications have been detailed.

8.1 Approach to accelerate growth of Exports

The major interventions required for setting-up AEZ in Kerala by integrating various

tasks in a synergistic manner would include:

§ Area expansion under exportable horticultural crops

§ Productivity and quality enhancement measures

§ Development of appropriate post-harvest technology

§ Export promotion

§ Research & Development

§ Logistics

The broad parameters on which interventions have been planned and requirement

of funds estimated have been given in table 61 hereunder:

Table 61 Coverage of area and farmers under the proposed project

Particulars Banana Pineapple Ethnic vegetables

Export targets at the end of 5 t h year (MT/Year)

40,000 fresh 4000 wafers

7,000 fresh 13,000

Production requirement (MT/Year) 60,000 8000 15,000 Expected productivity (MT/ha) 20 16 30 Requirement of area for Mono crop (Ha) 3,000 500 500 Estimated number of farmers under the programme

12,000 2,000 2,000

8.1.1 Area expansion under exportable horticultural crops

The full benefits of better realization on exports can accrue to states’ farmers only

when exporters start sourcing the product from within the state rather than from the

neighbouring states. For achieving this objective area under cultivation for the

identified crops would need to be increased in the districts of Thiruvanthapuram,


Ernakulam, Kollam, Thrissur, Pathanamthitta, Alappuzha, Kottyam, Idduki and

Palakkad. The farmers need to be convinced about better realization from

exportable crops, so that they increase the area under target crops. Farmers need

to be demonstrated the better economics of mono crops rather than present

practice of mixed cropping. There is need for amendment of land utilization act so

that area under paddy cou ld be shifted to horticultural products without any fear.

Since availability of land is a problem in the state, it is suggested that Government of

Kerala may make available some 500 ha of land in form of plots of 10 ha in the

selected 9 districts for cultivation of horticultural crops in the additional area. The

land may be from existing wasteland, panchayat land or Govt. owned agricultural

farms or Seed production centres. Presently there are 61 farms owned by

department of agriculture in the Kerala, out o f this 44 are in nine districts, identified

as AEZ. These farms are being used as seed and planting material production

centres at present. It was also learn that GOK is incurring losses on maintaining these

farms. The land may be given on long-term lease basis on commercial terms. The

land could be given to progressive farmers, farmers’ SHGs and VFPCK. Exporters’

associations may also be encouraged to take cultivation for exports. Under area

expansion scheme of MoA, there is a provision for Rs 30,000 per ha for Banana and

Pineapple farms. Since an area of 3500 ha for cultivation of these two fruits is

proposed for the purpose of exports exclusively, it is estimated that about 500 ha

can be brought in as additional area for the cultivation of banana and pineapple.

The provision available may be availed as grant; the aggregate grant would work

out to Rs 1.5 crores.

8.1.1.1 Commercial horticulture farm

At present the details of facilities available at each Government farm

recommended to be privatized are not available. For ‘Commercial Horticulture

Farm’ each farm should have an irrigation system, power sprayer, Modern

implements, collection room, plastic crates, a green house in an area of 200 sq.

meters for raising the nursery for the planting material particularly for farms to be

used for the cultivation of vegetables. The budgetary estimate for developing a

farm ad measuring ten hectares under ‘Commercial Horticulture Farm’ is Rs. 10 lacs.

NHB could provide grant of Rs. 2.5 lacs for each farm totaling to Rs. 25 lacs against

submission of bankable reports, which could be developed for specific location.

NABARD could finance these farms on concessional rate of interest. The state should


strive to set up 50 such farms for cultivation of banana, pineapple and ethnic

vegetable to avail the budgetary allocations. The state could also provide financial

assistance to these farms at the rate of Rs. 20,000 per hectare as applicable under

on going IVDP. This would amount to about 20% contribution by the state on this

activity.

8.1.1.2 Foliage farms (one Central farm and 50 satellite farm)

A number of schemes to promote small/cottage scale floriculture units, in the state

have been introduced with good degree of success. On similar lines small foliage

farms about 50 in number could be set up around a Modern Floriculture Farm

(mother farm) for cultivation of foliage. A central ‘Modern Floriculture Farm’ would

be required to supply planting material to satellite growers, provide them technical

assistance and collect their produce. For establishing a Modern Floriculture Farm

(Mother Farm) in an area of 5 hectare would require an investment of Rs. 70 lacs.

Out of this 20% (Rs. 14 lacs) would be available from NHB as subsidy and NABARD

could finance this project on concessional rate of interest. A provision of Rs. 75,000

towards shade nets (black) and planting material for each unit is kept, which

aggregates to 37.5 lacs. A subsidy of 20% could be availed from NHB. It is

recommended that DOA may also consider a subsidy of 25% to promote this

scheme as cut foliage is going to be a new export oriented product for the state.

The farmers and SHGs could avail the remaining amount as loan from NABARD on

concessional terms.

8.1.2 Productivity and quality enhancement measures

It has been explained earlier in Chapter 5 that even though banana has been a

traditional crop of Kerala, states like Maharashtra, Tamil Nadu & Gujarat; where

banana cultivation in large acreage has started only in 90s; have left Kerala far

behind. This has been due to use of tissue-cultured plants and proper agronomic

practices by the farmers of these states.

The potential for increase in productivity is upto 200%, for crops like Banana, which

can be achieved, in a short period of 3-4 years. Farmers are in a vicious cycle of low

cost, low productivity and low income. They need to be brought out of it. Similarly

good seeds and planting material for other crops need to be popularized.

The farmers should be supplied tissue cultured plants of banana and pineapple of

the desired varieties. Department of Agriculture has set-up one tissue culture lab,


which could supply these plants. Besides, there are a number of tissue culture labs in

private sector and a few owned by NGOs. Similarly, Kerala Government should

organize production of high quality hybrid seeds at their seed production centers for

the targeted crops and arranges distribution in the selected pockets at

concessional rates.

8.1.2.1 Making available disease-free quality planting material

Government of Kerala through various interventions is try ing to expand area under

cultivation of fruits and vegetables. The DOA has also set-up a Tissue Culture Lab

near Thiruvanthapuram. It is recommended that in each selected district of AEZ, a

modern nursery be set up. These nurseries should also have provision for hardening

the young tissue cultured plants of banana supplied by the tissue culture lab of GUK.

The estimated investment on each nursery (1000 Sq. m.) would be Rs. 20 lacs and a

grant of 25% i.e. Rs 5 lac per nursery would be available from NHB. This would

aggregate to a total investment of Rs 1.8 crore and grant of Rs 45 lacs. The rest may

be provided by GOK or any private entrepreneur could also be brought in.

8.1.2.2 Productivity improvement / rejuvenation

Under the scheme of ministry of agriculture and cooperation there is a provision of

Rs. 5000-7000 per ha on items like; replacement of virus infected plants, - balanced

use of micro nutrients, plant protection equipment and plant protection chemicals.

The provision is subject to maximum of Rs 7000 per ha, this assistance is as total grant.

It should be availed for the entire area to be covered under the project viz. 3500 ha

the grant would aggregate to Rs. 2.45 crores.

8.1.2.3 Assistance for adoption of IPM

To overcome the issue of pesticide residue, the intervention has to start right from

the farm level. The farmers need to adopt integrated pest management approach

supported with the information from the disease forecasting facility; farmers should

be encouraged to adopt IPM. An area of 4000 ha is proposed to be brought under

IPM with the assistance of MOA, which provides Rs. 1,500 per ha as grant, which

works out to Rs. 60 lacs. The R&D institutions in the state like KAU, CTCRI, Pineapple

Research Institute, Banana Research Station shall be requested to recommend

appropriate IPM packages.


8.1.2.4 Setting-up of laboratory facility for soil, water, leaf and quality analysis

The quality and productivity depends on condition of soil, nutrient availability and

extent of infestation with pests/diseases. In order to find out the deviation from the

optimum and to suggest corrective measures AEZ will have central laboratory

facilities for testing soil, water and leaf tissue. The total cost for establishing such a

facility would be around Rs. 50 lacs of which 25% amount may be obtained from

Ministry of Agriculture (GOI) assistance scheme. DOA could provide the rest of the

amount. For investment in the laboratory even private sector could be invited to run

it and technical assistance of KAU could be availed.

8.1.2.5 Development of Agri Information Centre

Collection, analysis and quick dissemination of market information is very important

for success of the export promotion initiative. Hence, it is proposed to set-up state-

of-art Agriculture Information Centre, which could be managed by DOA or VFPCK.

The centre will maintain information on package of practices for various crops, area

under cultivation, market price, arrivals etc. A network of user-friendly kiosks would

be created which SHGs could use. The centre will be further linked to the wholesale

markets through NHB and international information providers like ITC Geneva. The

center should also be linked be wholesale fruits and vegetable market of Dubai- the

major export destination.

For this an amount of Rs. 15 lacs is envisaged and the same can be obtained as

grant from MOA under the scheme for promotion of information technology.

8.1.2.6 Demonstration and extension services

The ‘Commercial Farms’ recommended in heading 8.1.1 under area expansion

scheme will also act as demonstration farms and can be used for providing

technological guidance to the farmers on all aspects of cultivation and post -

harvest.

The total area under AEZ is expected to be around 4000 ha and there would be

about 16,000 farmers covered under AEZ. It is proposed that about 20% of farmers

viz. 3200 may be covered under the programme and 400 farmers could be trained

and given exposure to modern farming techniques every year. A budgetary support

of Rs. 1,500/- per farmer is provided which would work out to Rs. 48 lacs. This amount

could be availed as 100% grant from NHB/MOA.


8.1.3 Development of appropriate post-harvest technology

There is urgent need for development of appropriate post-harvest technologies for

extending the shelf life and keeping the quality of commodities good. Some

exporters of perishable commodities were confident that if shelf life of the products

could be extended they would be in a position to increase the exports many times

through use of cheaper marine transport. Appropriate post -harvest infrastructure

needs to be provided. Pack houses, CA/MA cold storage need to be provided.

Existing EU funded markets at Thiruvanthapuram, Ernakulam, Movaputtan could be

used for creating such facilities.

8.1.3.1 Collection /Bulking Centre

For exportable fruits and vegetables, a collect ion / Bulking centre would need to be

set up for a group of farmers / SHGs as a first point for bulking of the produce and

primary processing i.e. grading etc. The existing infrastructure of VFPCK could be

used for this purpose wherever possible. However, in the new identified clusters such

centres will need to be set-up. It is estimated that 10 new such centres would be

needed and cost for each centre is estimated at 15 lacs and the aggregate cost

would be 150 lacs. NHB and APEDA could provide 50% grant. The remaining amount

could come from private investments or VFPCK/DOA.

8.1.3.2 Integrated pack house

By the end of project, a total volume of about 60,000 tons of fruits and vegetables is

expected to be exported in a year. Therefore, 4 integrated pack houses are being

recommended. These could be set-up in the existing EEC markets or food parks. This

would bring down the cost of infrastructure needed and also help in utilization of the

existing facilities. It is estimated that an amount of Rs. 150 lacs would be required for

setting-up each integrated pack house. Out of total requirement of Rs. 600 lacs,

MFPI/NHB could provide 50% of this amount as grant viz. an amount of Rs 3 crores as

grant. The remaining amount would come as a private investment for which

concessional loan could be availed from NABARD.

8.1.3.3 Wafer processing unit

For export markets, it would be desirable to have branded banana wafers,

processed and packed using modern technology. It is suggested that a modern

banana wafer -processing plant may be set-up in the existing pineapple processing


plant at Muvattupuzha. The investment on this is estimated at Rs. 150 lacs. MFPI

would provide a grant of Rs. 25 lacs for this. Assistance to the extent of 20% of

investment subject to a ceiling of Rs. 25 lacs may also be availed from NHB.

8.1.3.4 Reefer trucks

For movement of fruits and vegetables from collection centres to pack houses and

from pack houses to airport, it would be desirable to transport the highly perishable

fruits and vegetable in reefer trucks to maintain good quality. It is suggested that 10

reefer trucks costing Rs. 120 lacs may be provided. APEDA can provide a subsidy of

Rs 50 lacs on this item.

8.1.3.5 Quality Systems Implementation

Quality systems like HACCP and ISO should be implemented atleast at four locations

i.e. one each in the three proposed integrated pack houses and one in the Banana

wafer-processing unit. For implementation of quality systems and post-harvest

practices at 4 locations, a provision of Rs. 8 lacs is being kept. Out of which, an

amount of Rs.4 lacs can be obtained as a grant from APEDA.

8.1.3.6 Trial consignment in MA Container

MOA would organize development of protocols for transporting fruits, vegetables

and cut foliage through MA containers. It is proposed that APEDA may finance

dispatch of 2 trial containers to Gulf Countries and 2 to European markets. The cost

towards this is estimated at Rs. 12 lacs (Rs. 3 lacs/container), which may be provided

by APEDA as 100% grant.

8.1.3.7 Development of packaging

Suitable packaging material needs to be developed for fresh fruits and vegetable.

Similarly banana wafers would also require good quality packaging material which

can give it long shelf life. Some research work would also need to be under taken

on other aspects of packaging like vacuum packaging, Nitrogen flushing, skin

wrapping etc. for enhancement of shelf life and preservation of quality. It is

suggested that the services of Indian institute of packaging may be availed for the

desired work on packaging material and techniques. A provision of Rs. 10 lac is

being made for this and this amount is to be paid as grant by APEDA.


8.1.4 Export Promotion

Kerala also has advantage of having a good base of loyal Consumers in gulf market

that has preference for produce of Kerala. For further strengthening of exports

following steps would be needed:

§ Understanding international competitiveness of identified products and Kerala’s strengths.

§ Understanding of the international standards of product and packaging. § Building-up a market information system.

8.1.4.1 Understanding India’s Competitiveness

After implementation of WTO, the trade barriers are gradually being removed.

Therefore, the least cost producers will have an advantage in the international

trade. The exporters should identify the major competitors in the target market and

do a detailed comparative analysis of the competing countries’ products in terms of

product quality, packaging, productivity, cost of production, availability period etc.

and ascertain India’s competitiveness. For this purpose, a detailed market survey will

need to be undertaken in the major export destination. Since some European

countries have started showing interest in products like Drumsticks, Yam and

vegetables. Further, a large proportion of cut foliage would be sold in European

countries, therefore, a detailed market study be undertaken in these markets. A

provision of Rs. 15 lacs is being made for this activity. APEDA may provide this

amount as total grant.

8.1.4.2 Understanding international standards of product and packaging

The increased levels of consumer awareness the quality aspects have assumed a

great importance. The laws related to products packaging quality in the export

market need to be studied in details. Issues like residual levels of insecticide &

pesticides are very important, as the same would need to be handled at farmers’

level. Similarly, issues related to packaging material, mandatory information on

packages need to be understood. For this activity, a team of exporters could

participate in important exhibitions, conferences etc. in foreign countries. It is

recommended that 5 persons per year for 3 years may participate in such

exhibitions. The total expenses towards this would be Rs. 45 lacs, out of which APEDA

may provide grant for 50% amount. The remaining amount would be borne by the

exporters who wish to visit the foreign countries.


8.1.5 Research and Development (R&D)

For the various issues highlighted above, the R&D institutes in the state; like KAU,

CTCRI, Banana Research Station and Pineapple Research Institute would work out

details of the research work to be undertaken along with the requirements of funds

for the same. At this stage no budgetary allocation being provided. For this activity,

financial assistance may be obtained from CSRI, CSIR, MFPI, NHB and APEDA. The

priority of research should be decided in consultation with the farmers and

exporters. No budgetary provision is being made at this stage.

8.1.6 Other support measures

For successful implementation of AEZ, apart from the financial support of Central

Government Agencies, the GOK and its various departments would also be required

to take some policy decisions, earmark some additional resources and depute a

dedicated team of officers. Some of the activities are:

§ Integration of various on going horticulture developmental activities, in the state.

§ Financial support to VFPCK for undertaking activities for organizing farmer’s SHGs

etc. in areas identified under AEZ.

§ Making available Government land for hi-tech cultivation by farmers

SHGs/VFPCK, Exporters’ Associations etc. on long-term commercial lease basis.

§ Arrange uninterrupted power supply to cold storages, pack houses and general

improvement in power supply to farmers in AEZ through KEB.

§ To provide budgetary support to Central Lab and Nursery till these are self-

sustainable.

§ To develop a mechanism by which part of EEC markets is handed over to service

providers for setting up pack houses.

§ Making available land for setting-up collection / bulking centres., for exportable

fruits and vegetables.

§ To create a special cell comprising of at lea st 3 senior officers with support staff

for implementation of AEZ.

§ Repealing of Land Utilization Act to enable faster conversion of land under

Paddy to Horticultural Crops.

§ To create an enabling environment suitable steps for motivation of farmers

(better availability of inputs, crop insurance, credit etc.), exporters and to attract

fresh investments from entrepreneurs.


The major cost to be borne by state would include expenses on creation of ‘Special

Cell’ for implementation of AEZ. The costs estimated are:

Salaries of 3 officers : Rs. 10 lacs / year

Support staff : Rs. 2 lacs / year

Office expenses : Rs. 2 lacs / year

Travel etc. : Rs. 2 lacs / year

Miscellaneous : Rs. 1 lacs / year ------------------------- Total : Rs. 17 lacs / year

The expanses d uring project period would be Rs. 85 lacs. Strengthening of extension

activities for project period would be Rs. 50 lacs. Support to VFPCK would also need

to be provided by GOK for strengthening its activities in the AEZ for which a provision

of Rs one crore has been kept.

The summary of the project cost and expected assistance from various agencies

associated with the project is given on next page.

8.2 Funding Mechanism

The total cost of various activities under the AEZ is estimated at Rs. 18.58 crores, of

which Rs. 7.79 crores can be financed through the existing schemes of various

Government departments (central and state level). Based on this there would be a

gap of Rs. 10.79 crores for which, besides attracting private sector investment, the

various st ate organizations like VFPCK may also consider making special

concessions/ provisions under their existing schemes.

Funds requirement at a glance is presented in table 62:

AEZ Kerala Cebeco India Private limited. Your partner in Agri -Business

77

Table 62 Project cost and sources of funds

S.No. Particulars No. / Capacity

Cost per unit (in Rs. lacs)

Total Cost (in Rs. lacs)

Govt. Organization

Support Assistance Amount (in Rs. lacs)

Private Sector Investment (in Rs.

lacs) 1. Area expansion under exportable horticultural crops

§ Additional area under Banana and Pineapple § Commercial Horticulture Farms § Modern Floriculture farm § Foliage satellite Farms

500 ha 50 of 10 ha

each 1 of 5 ha

50 of 02 ha each

0.3 10 70

0.75

150 500 70

37.50

MoA NHB NHB

NHB/DOA

150 125 14

16.9

-

375 56

20.6

2. Production and quality enhancement programme § District level for planting material § Productivity improvement/rejuvenation § Assistance for adoption of IPM § Central Lab § Development of Agri-information System Demonstration and extension services § Time and method of planting § Planting Density § Integrated Pest Management § Fertilizer Practices Salaries of § Horticulture Expert § IPM Expert §

9

3500 ha 4000 ha

1 1

3200 farmers

1 for 3 years 1 for 3 years

20

@Rs.7000/ha @Rs.1500/ha

50 15

Rs. 1,500

3 3

180 245 60 50 15

48

9 9

MOA MOA

MOA & NHB MOA MOA

MOA

DOA DOA

45

245 60

12.5 15

48

9 9

135

- -

37.5 - - - -

3. Post-Harvest Management § Collection / Bulking Centres § Integrated Pack Houses with cold storages § Wafer Processing Unit § Reefer Trucks § Quality Systems Implementation § Trial Consignments in M.A. Containers § Development of packaging

10 4 1

10 4 location

4

15

150 150 12 2 3 10

150 600 150 120

8 12 10

NHB /APEDA NHB/MFPI NHB/MFPI

APEDA APEDA APEDA APEDA

75

300 50 50 8 12 10

75

300 100 70 - - -

4. Export Promotion § Market Surveys § Participation in International Exhibitions

1 survey in

Gulf 5 lessons per year for 3 yr.

15 3

15 45

APEDA APEDA

15

22.5

-

22.5

5. R&D Project

AEZ Kerala Cebeco India Private limited. Your partner in Agri -Business

78

S.No. Particulars No. / Capacity

Cost per unit (in Rs. lacs)

Total Cost (in Rs. lacs)

Govt. Organization

Support Assistance Amount (in Rs. lacs)

Private Sector Investment (in Rs.

lacs) § Maturity indices standardization for sea & air

shipping § Development of protocols for banana &

pineapple for sea shipping § High yielding varieties of vegetables § In view of mixed cropping, recommendation on

best combination of crops and agronomic practices

§ Development of protocols for tissue culture plants for ethnic banana varieties and pineapple

§ IPM Packages for various selected crops

As per requirements

Cost to be estimated by

the concerned

R&D Institution

MFPI APEDA/NHB

CSIR

6 Project implementation and support by GOK § Pre project expenses § Expenses of special cell for AEZ § Strengthening of extension activities § Support to VFPCK

A team of 3 officers for 5

years in identified

clusters organizing

new SHGs in identified

clusters

25 85 50

100

DOA DOA DOA DOA

25 85 50

100

- - -

TOTAL

2743.5 1551.9 1191.6

Say Rs. 27.44 crores

AEZ Kerala Cebeco India Private Limited Your Partner in Agri -business

79

Out of total investments expected for implementation of AEZ in Kerala the central

agencies are expected to contribute about 43% almost matching amount is

expected to be brought in by the private entrepreneurs. The rest, about 15% would

be contributed by the Government of Kerala. The details are given in the table 63:

Table 63 Summary of source wise funds requirement

Source

Rs. lacs % contribution Central Agencies (APEDA/NHB/MFPI/MOA) 1265 46 DOA (GOK) 287 11 Private Investments 1192 43 Total 2744 100

*GOK will also make available required portions of existing EU markets to be

converted to integrated pack houses and the valuation of the same has not been

done.

The year wise allocation of funds by different agencies is given in the table 64.

Table 64 Estimated phasing of funds (Rs. in Lacs)

Years Source 0 1 2 3 4 5 T otal

Central agencies 254 342 519 100 50 1265 DOA (GOK) 25 43 80 89 25 25 287 Private Investment 238 368 436 100 50 1192 Total 25 535 790 1044 225 125 2744


80

9 CONCEPT OF AGRI EXPORT ZONE IN KERALA

COMMON FACILITIES AT FARM LEVEL POST – HARVEST PROCESSING EXPORT

FOR EXPORT PROMOTION

Support through schemes of Central and State government organisations

POST HARVEST INFRASTRUCTURE

- Precooling

INTEGRATED PACK HOUSES

- Processing Line (Pre-cooling, Sorting/grading, Packaging)

Tissue Culture Lab and Nursery for development of good quality planting material

Testing Laboratory for soil, water, leaf, fruit

Agri Information System

Collection / Bulking Centres

Improvement of existing farms - Introduction of

appropriate agronomical practices

- Demonstration, training and Extension services

- IPM programme - Provision of tools

& implements, spraying, packing etc.

- Contract farming

International exposure to farmers

Market surveys

Participation in international fairs

Implementation of quality system

R & D projects

Hi-Tech Farms

Small Foliage Farms

Refrigerated Trucks

Banana Wafer Processing Unit

Refrigerated Trucks

Trial Consignments in MA Containers


81

9.1 Plan of Action, Deadlines and Administrative Structure The establishment of the Agri Export Zone in Kerala will be undertaken in following

phases:

Phase I Approvals and AEZ creation phase (0 to 5 months)

Activity 1 § State will designate nodal agency for Agri Export Zone –within 15 days of the

acceptance of the report

§ Getting commitment of various state Govt. departments and signing MOU for

allocation of resources – within two months

- The nodal agency will coordinate with various organizations and enter into

MOU with the concerned departments for financial grants, time frame and

implementation of designated activities.

- Concession Agreement/memorandum to be entered into with various

exporters, processors and service providers which will facilitate single window

clearance of various activities.

- Submission of proposal to APEDA

§ Receipt of proposal by APEDA, which will process the same and forward it to

steering committee for ;

- Approval of proposal

- Declaration of proposed area as Agri Export Zone

This activity will be completed within a month on receipt of proposal from

state nodal agency

§ APEDA to get approval from MOC and in principle commitment from central

agencies towards described role for implementation of AEZ – this activity is likely

to be completed within 45 days of the receipt of proposal from the state nodal

agency

§ APEDA will prepare proforma for collection of information of various activities

and information systems for monitoring/review of the progress of implementation.

- to be completed within 15 days of the approval by steering committee.


82

Activity 2

§ The nodal agency will dedicate a team which will;

- Carry out survey to firm up the area and selection of farmers to be associated

with AEZ developmental activities

- Identification of Govt. land/farms which could be leased out for cultivation.

- Completion of formality for handing over of part/full EEC market for survice

providers/exporters of pack houses.

- Start discussion with exporter/processors, growers about the agri export zone.

These activities will be completed within 3 months

§ Preparation of proposals for the following activities;

- DPR for Banana processing unit – within three months of the approval from

APEDA

- DPR for Hi Tech farms within three months of the approval from APEDA.

- DPR for ‘Modern Floriculture Park’ and satellite farms.

- DPR for post harvest facilities – within three months of the approval from

APEDA

- Preparation of NIT inviting entrepreneurs to make investment in High Tech

farms and post harvest infrastructure – within a month from the preparation of

feasibility reports

Activity 3

§ Selection of entrepreneurs for various facilities – to be completed in a period of

three months from the completion of activity 2.

§ Concerned department in consultation with nodal agency will firm up and start

development work – the work to start within one month of the approval of

APEDA

§ Initiation of demonstration/training and product/quality improvement

programme - the work to start within one month of the approval of APEDA

Phase 2 Project implementation phase (Year 1 onward)

This phase describes the scheduling of various activities envisaged to achieve export

targets. Some of these activities will start at the outset. Schedule is presented in the

enclosed pert chart.


83

Pert Chart 1 Project Implementation Activity List 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Activity 1 Designation of Nodal Agency Getting commitments of state govt. and signing MOU for resource allocation § Entering into MOU for

Financial grant § Concessional agreement

with exporters, processors and service providers

§ Submission of proposal to APEDA

Receipt of proposal by APEDA Approval from MOC and commitment from central agencies towards described role for implementation of AEZ

Preparation of Performa by APEDA for information collection

Activity 2 Dedication of a team by nodal agency § For survey for selection of

farmers and area § Identification of Govt. land

for leased cultivation § Handing over of EEC market

for survice providers/operators of pack houses

§ Discussion with exporter, processor and growers


84

Preparation of proposals and DPR

§ Preparation of proposals

§ DPR for Banana processing unit

§ DPR for ‘Hi Tech farms’ within three months of approval from APEDA

§ DPR of Modern Floriculture Park and satellite farmers

§ DPR Post harvest facilities

Preparation of NIT

Activity 3 Selection of entrepreneurs Start development work with concern department

Initiation of demonstration/training and productivity/quality improvement program

Phase 2 Scheduling of various activities tp achieve export targets


85

Pert Chart 2 Development of Organisation and Systems Activity List

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Decision on organisation setup

Appointment of Directors

Appointment of team by Mandi Parishad & interim management

Familiarization to the concept

Selection of key personnel

Formulation of consultative committee

Setting up of farmers interest groups/assoc.

Training of key executives

Selection of supervisory & field staff

Setting up of the software system for MIS

System for dissemination of the information

Procurement & wholesale operations

Full scale operations

AEZ Kerala 87 Cebeco India Private Limited Your Partner in Agri -business

9.2 Agencies involved in state level A number of states PSUs/Departments/organizations are engaged in development

of horticulture in the state, a brief description about their roles is given in Chapter 4.

It is suggested that the state dep artment of agriculture should act as an

implementation agency for setting-up of Agri Export Zone in Kerala. The department

should form a special cell consisting of a multidisciplinary team for co-coordinating

the activities of various associated organisations, central as well as state, with

respect to the assigned roles.

However, apart from taking the responsibility of monitoring the activities of other

agencies involved, the department of agriculture would need to take certain

specific actions itself.

9.2.1 Department of agriculture

§ To act as a nodal agency for the implementation of AEZ

§ Search entrepreneurs/agencies for operating common facilities like integrated

pack house, markets, central laboratory, nursery etc.

§ To set-up a disease forecasting system

§ To set-up agri- information center for collection and quick dissemination of

market information.

§ Strengthening of extension activities in the selected blocks by deploying extra

staff and organizing more demonstration farms etc.

§ Higher outlay for ‘vegetable Growers Sangams’ in selected districts and inclusion

of fruit and foliage growers also in this scheme.

§ Makes available quality planting material / seeds through its tissue culture lab,

Nursery seed farms etc.

§ Set-up state-of-art laboratory (crop-related tests l ike soil, water leaf analysis etc.)

at a central location.

§ Help the farmers and exporters to bench mark against international standards by

way of meeting with experts/scientists, visits to developed states/other country

participation in exhibitions etc.

§ Dovetailing of various state & central schemes and to ensure quick disbursement

to eligible farmers.


§ Development of irrigation resources. Allocate funds to other designated

agencies of the state.

§ Create a reliable system for database on area under production, quantities

produced for each horticultural crop

§ To promote investments in horticulture assist farmers in obtaining crop loans.

§ Take up issue with the National Insurance companies to include targeted crops

under crop insurance policy and share part payment of the premium in initial

years.

§ Handover EEC markets in the AEZ to private service providers on a long-term

basis.

§ Repeal land utilization act to legally promote shift in area under paddy to

horticulture crops.

9.2.2 VFPCK VFPCK formerly known as KHDP has successfully demonstrated organizing SHGs of

vegetable growers, providing them technical inputs and arranging sale of their

produce in a very transparent manner. It is suggested that in view of VFPCK’s

existing network and experience, it should be given larger responsibilities. The

specific roles envisaged for VFPCK are:

§ Extending its activities in all the districts proposed to be covered under Agri

Export Zone

§ Including cut foliage for exports in its product range.

§ Identification of pockets more suited for cultivation of export-oriented crops.

§ Identification of SHGs of progressive farmers keen on growing fruits and

vegetables and arranging special training for them as well as helping them by

arranging inputs like good planting material/seeds, fertilizers,

insecticides/pesticides etc. apart from credit.

§ Upgrading existing bulking center or setting-up new bulking centers at strategic

locations. These Centres should have post-harvest facilities required for exports.

§ Acting an interface between growers SHGs and exporters. Developing systems

on contract farming, benchmarking of quality, pricing methods etc. to ensure

fair price to farmers and suppliers of export worthy products.

§ Development of market information system with linkages among all major

markets.


9.2.3 Kerala Agro Industries Corporation

KAIC could take up the responsibility of strengthening Agro Service Centres in the

identified pockets, facilitating mechanization of the proposed ‘High Tech farms’.

9.2.4 Kerala State Electricity Board KSEB could play an important role in promoting agro-exports from the state. It should

supply uninterrupted power to the post -harvest facilities and pack houses.

The processing/harvesting facilities centres set up AEZ. The unit would be eligible to

avail duty free diesel for power generation as per Exim Policy. KESB may accord

permission to the units to generate their own electricity so as to avail duty

concession on diesel. Large farms to be set-up under Hi-tech horticulture should be

supplied regular power to ensure timely irrigation and other operations at the farm.

9.2.5 Department of Sales Tax The suppliers of packaging material and other inputs in the AEZ may be given sales

tax exemption.

9.2.6 Kerala Agricultural University

KAU can play very important role in promoting export of horticultural produce. It

should focus on research on market needs (exports) rather than academic

research.

The specific task in this regard should be:

§ Development of high yielding varieties of the identified crops.

§ Standardization of Agronomic practices.

§ Organizing farmer’s fairs, conference etc.

§ Development of post-harvest practices for increasing shelf life.

§ Organizing demonstration farms in land owned by KAU.

9.2.7 State level Financial Institutions and Banks

The financial institutions like ICICI, IDBI, SIDBI, Nationalized Banks (lead banks in

particular), rural & cooperative banks, NABARD etc. should be sensitized to credit

needs of the farmers and enterprises engaged in post -harvest, exports etc. The

activity being agriculture and export oriented should need priority lending at

concessional terms.


9.2.8 Central Tuber Crops Research Institute

The Central Tuber Crops Research Institute near Thiruvanthapuram is one of the

world’s leading research institutes for carrying out research work exclusively on

tropical tuber crops. The institute has done work on production technology, post -

harvest and processing of tuber crops. The specific tasks, which CTRI should be

entrusted with are:

§ Productivity enhancement through development of new verities and agronomic

practices.

§ Making available planting material for further multiplication and distribution to

farmers.

§ Dissemination of information on harvesting methods and post-harvest practices

§ Organizing Demonstration Farms, training of farmers.

9.2.9 Pineapple Research Centre

The pineapple research center at Muvattupuzha is engaged in cultivation aspects

of pineapple, development of tissue-cultured plants, development of new varieties

etc. The specific tasks assigned to this should include:

§ Development of high yielding varieties for table purp ose.

§ Development of agronomic practices for various crop combinations (pineapple

as on inter-crop in plantations).

§ Supply of disease free and quality tissue-cultured plantlets of pineapple.

9.2.10 Banana Research Station

Banana Research Station, Kannure, near Thrissur is engaged in R&D on various

aspects of banana cultivation and post -harvest management.

In view of extremely low level of productivity of banana, the focus of research

should be on productivity enhancement. The specific role of this institute would be:

§ Commercialization of tissue cultured plants for tradition varieties of banana in the state.

§ Standardization of package of practices. § Trials on suitable inter-crops for banana at different locations. § Improvement in production technology. § Cultivation of exotic varieties for exports markets. § Trials on post -harvest practices to increase shelf life so that Banana could be

exported through marine transportation, which is economical.


9.2.11 R&D on post harvest management of pineapple

It is felt that the exporters of horticultural produce (Fresh) should form a single state

level organization and actively participate in implementation of Agri Export Zone.

9.3 Agencies involved - Central Government

9.3.1 Agricultural and Processed Food Products Development Authority (APEDA) APEDA will be the nodal organisation to co-ordinate programmes of various Central

organizations, obtaining approval of the Steering Committee and monitoring the

implementation and putting up review reports to the Steering Committee.

In addition to a nodal agency role, APEDA will also extend assistance under various

schemes.

9.3.1.1 Specific responsibilities for Agri Export Zone

§ Market development/promotion support by way of market survey, participation

in international exhibitions, publicity (generic, printed material)

§ Support for setting up / upgradation of quality assurance systems (HACCP,

laboratory subsidy)

§ Freight subsidy for export

§ Provide support for purchase of pre cooling equipment and reefer trucks.

9.3.2 Department of Food Processing Industries (DFPI)

Assistance available to processing units such as grant- in-aid on capital investment

may be extended to the units in AEZ. Various support programmes of the DFPI will

be:

§ Support for contract farming

§ Grant in aid and equity participation in post harvest facilities and pack house

unit(s)

§ Financial assistance to AEZ


§ Provide grant and support for the Agri Export Zone

§ Provide support for setting up the contract farming system


9.3.3 National Horticulture Board

National Horticulture Board has a number of assistance schemes to support various

developmental programmes. Some of the relevant assistance schemes as

described below may be made available to the units in AEZ. § Support to research institutions for R&D projects

§ Extend scheme for integrated cultivation


§ Overseas training of farmers for giving them insight into international production

and handling practices

§ Market information on prices and arrivals in important markets of the country

may be made available to the AEZ.

§ Support R & D - Extend support to MAU. MAU to prepare specific projects and

submit the same to NHB, for approval.

9.3.4 Ministry of Commerce

§ Extend benefits of other schemes to all units/facilities set up within the AEZ

(EPCG, Export House).

§ Provide market development support through grant available under the

account Market Access Intervention Fund.

9.3.5 NCDC

Support for setting up farmers’ co-operatives for group activities including joint

purchase of inputs, setting up collection centres etc.

9.3.6 Indian Institute of Packaging § Development of packaging material for fresh & processed products

§ To set up a field station for testing of packaging material


§ To develop export worthy and accep table packaging for exports of fresh

Mangoes by sea.


10 SOCIO-ECONOMIC BENEF ITS

The investments on the desired interventions in the proposed AEZ in Kerala will be

developmental in nature. There would definitely be a discernible increase in the

export volumes and earnings, incomes of farmers and others related with the trade,

increased employment etc. Besides economic benefits, there would be many social

benefits like farmers’ adoption of other innovations and technology for

improvement in quality of life. It may not be possible to quantity such benefits since

the qualitative aspects can be felt, only.

Some of the benefits, which the project would accrue, are given here under:

10.1 Increased exports and benefits to exporters The interventions are specifically targeted at increasing exports. The interventions

are expected to increase India’s export earnings by Rs. 40 crores per year during 5th

year of project. The table 65 shows the year wise incremental value of exports and

the additional financial benefits, which the exporters are likely to have.

Table 65 Increase in exports & benefits to exporters (Rs. in crores)

Year S. No.

Particulars 0 1 2 3 4 5

1 Exports without interventions 6 0 6 6 72.6 79.86 87.85 96.63 2 Exports with interventions 6 0 6 6 8 1 9 7 116 140 3 Incremental exports 0 0 8.4 17.14 28.15 43.37 4 Profits to exporters 0 0 0.84 1.71 2.81 4.33

10.2 Profits to farmers from production enhancements The present level of productivity of banana, pineapple, tapioca and vegetables is

quite low and potential for productivity gain is upto 200 % for some crops. Even if

farmers achieve 25% increase in the productivity there will be tremendous benefits

to farmers in the clusters identified for nursing. The farmers in the nearby areas would

also get the benefits due to induction effect. With use of modern technology, profits

from other crops will also increase.

10.3 Reduction in handling losses

With R&D efforts in developing new post -harvest technology and setting-up of post-

harvest infrastructure like CA storage, pack houses etc., the handling losses will

reduce and due to improvement in quality of the product even price realization

may increase. Even if there were reduction in handling losses equivalent to 10%


quantity of the exported fruits & vegetables, its value would be around Rs. one crore

per annum in the fifth year of the project and will continue to grow. However for

calculation of economic rate of return (ERR) this benefit has not been consider.

10.4 Creation of employment Setting-up of CA Storage, pack houses, banana wafer processing plant and allied

activities would create additional employment in the state. Establishing of

‘Commercial Horticulture Farms. Foliage farms etc would create additional full

time/part time jobs in the rural areas of the state. Some job would also be created

in packaging industry. It is expected that about 450 new jobs would be created.

10.5 Income from EEC markets

Hitherto unutilized / underutilized EEC aided markets would be utilized for post-

harvest activities which will generate some income for the state.

10.6 The proposed soil & leaf analysis centre The proposed soil & leaf analysis centre, central nursery, banana wafer processing

units are proposed to run as independent profit centres after initial budgetary

support. These units are expected to generate modest profits after a gestation

period of 3-4 years.

10.7 Export of value added products

The export of value added products like banana wafers would bring additional

export realization.

10.8 Benefits from ‘Commercial Horti culture farms’

At present the GOK is not having any profit from the government owned/PSUs

owned farms; rather budgetary support is needed every year. The privatization of

farms will result in the savings of this support besides private owners will generate

some profits as well as additional job would be created in rural areas.

10.9 Cost Benefit of the project

From quantification of some benefits as explained in the foregoing paragraphs, it is

clear that the investments in the AEZ Kerala will bring in good economic returns. The

year wise projected benefits have been summarized in the table 66.


Table 66Summary of various economic benefits of the project (Volume in 1000MT, value in Rs. Crore)

Years S. No.

Particulars 0 1 2 3 4 5

1 Projected Volume of Exports without project (’000MT) 30.00 33.00 36.30 39.93 43.92 48.32

2 Estimated Value Rs crores 60.00 66.00 72.60 79.86 87.85 96.63

3 Projected Volume after project 30.00 33.00 39.60 47.52 57.02 68.43

4 Estimated value Rs crores 60.00 66.00 81.00 97.00 116.00 140.00 5 Incremental Export(value) 0.00 0.00 8.40 17.14 28.15 43.37 6 Estimated incremental profits 0.00 0.00 0.84 1.71 2.82 4.34 7 Increase in productivity 0.00 0.00 4.86 5.82 6.96 8.40

The project will have very attractive economic returns beside creation of additional

employment and positive qualitative changes in the life style of farmers. The Key

indicators of the economic return of the project are:

Economic rate of return = 37 %

Net Present value (NPV) = Rs 29 crores

Cost Benefits ratio = 2.4

The detail working of above indicators is given in Annex 3.

5 Value of estimated incremental exports(4 – 2)6 Profits on exports assumed at the rate of 10%

of export value. 7 Productivity increase assumed at 20% valued

at 30% of average export realization.

1. Existing level of exports projected at present growth rate of 10% PA

2 Estimated value of exports projected at current prices.

3. After intervention growth in exports assumed 20% PA.

4. Estimated value of exports projected at current

prices.

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