Hail, horticulture!
Dr B K Mukhopadhyay
(The author is a Professor of Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)
Dr. Boidurjo Rick Mukhopadhyay
(The author, international award-winning development and management economist, formerly a Gold Medalist in Economics at Gauhati University)
India is the second-largest producer of vegetables and fruit in the world the largest producer of milk, pulses, and jute, and the second-largest producer of rice, wheat, sugarcane, groundnut, vegetables, fruit, and cotton], with the UAE, the Netherlands, UK, Russia, and Saudi Arabia being top destinations for export of fruit. Total horticulture production in India is estimated to be 333.25 million tonnes during 2022-23, marginally lower by 0.4 per cent from 334.60 million tonnes in the 2021-22 crop year. The marginal dip in overall horticulture production can be attributed to an overall 4.6% decrease in the production of potatoes due to flooding of crops in certain states. In addition to potatoes, there was a decline in the respective output of spices, flowers, aromatic & medicinal plants as well as plantation crops in 2020-21.
As is well known a fact that dragon fruit is famous in Thailand, Vietnam, Israel, and Sri Lanka. In India, commercial cultivation of this fruit is picking up and some farmers and fruit lovers in Nagaland have initiated its cultivation. The Dream Dragon Fruit Farm at Shitovi village in Dimapur district is the first farm where the exotic Dragon Fruit is produced and sold. Exploring the potentialities of horticultural crops could boost the diversity of the production system, which in turn, promotes agricultural and ecological sustainability that contributes to domestic food production. Still, while the potentialities are now realised and placed at a higher level, the implementation level has been remaining at a palpably low level for several developing economies.
The shipment of fresh fruits has witnessed an increase at a time when India's overall exports have declined. Overall exports have fallen but fruit exports have picked up, when India exported its first consignment of grapes to Canada and pomegranates to the US very recently; it offered a ray of hope for the otherwise dismal exports scenario of the country. Grape exports had increased due to the development of new markets in Canada, Australia, and Russia along with a rise in production due to the adoption of international certifications like The Thompson and Global GAR - among the key requirements for exporting grapes to European markets.
Demand for Indian mangoes, grapes, bananas, and pomegranates has increased. Going forward, India expects to export more to Japan, the US, and Europe. Mauritius has also opened its market for Indian mangoes, while grape exports to Europe are up.
Market inefficiencies, Logistical Barriers, and Poor Price Support
Despite the latest trends observing increasing demand patterns in the agriculture sector there are major problems that loom large, A) The lack of a broad raw material base in terms of the kinds and varieties of fruits and vegetables suitable in all respects for processing and their availability in commercial quantities at prices economical to the processing industry, B) The cost of the raw material is high, C) low productivity and poor quality of the product as compared to the very high levels obtained in the advanced countries affect processing, and none of the processing units works to full capacity utilization.
Additionally, the produce taken up for processing is devoid of the quality attributes or characteristics required for processing. There is a lack of integrated marketing strategy to meet the raw material requirement of processing units, and also ensuring a sustainable export market for the processed products has been keenly experienced.
The continued challenges posed for horticulturists are coping with market inefficiencies and faulty policies. On one hand, we have an ongoing horticulture revolution, and on the other, there is considerable farm unrest in the country. While horticulture is more suited to millions of India's small and marginal farmers as fast-growing crops, such as vegetables, ensure a quicker cash flow to the producer, the feeble infrastructure for handling, transport, marketing, and processing, horticulture as an industry has failed to register commendable growth in India. Particularly - transportation, road networks, freight and cargo facilities the freight rates in India are reported to be higher than those prevalent in some other countries, the very fact that does very little to improve our competitiveness, cold storage facilities, etc. coupled with inadequate post-harvest management which affects the produce and products. Poor and inconsistent quality of processed products and inadequate export promotion are also hindering the growth prospects. It is the residual rather than the fresh produce that is often taken up for processing, which has a bearing on quality.
As a matter of empirical fact, fruits and vegetables are generally constrained by poor price support, credit support, and delivery system. Inadequate supply of power, water, and research and development support exists as no fewer constraints. The quality of packaging also leaves much to be desired – simply not market-oriented – as importing countries demand specific packaging for each product and the use of biodegradable materials resulting in a high cost of packaging.
The $70-billion Indian food processing industry is dominated by small and medium enterprises, which do not have the capacity to undertake large-scale processing of fruits and vegetables. The main challenges to the SMEs engaged in horticulture have always been the flow of investment and capital, access to technology, and the initial learning curve to develop the required skills. While some attempts have been made to help the situation by introducing smart management systems to maximize the output with given inputs like nutrients, water, plant care, etc; applying Integrated water management that focuses on Source to Root, to improve the productivity of water – however, they have been very sporadically applied across the country.
During the peak production period, the gap between the demand and supply of cold storage capacity was huge. As per National Centre for Cold Chain Development, "The biggest wastage happens during the transportation of horticulture products from the farm gate to mandis and thereafter. The answer lies in minimizing the wastage that happens during transportation." From a farm gate to a consumer, a horticulture product passed through seven different distribution channels, and in every step, there was a loss of 5-7 per cent. 9.18 processing losses also abound.
Trade, Reforms, and new technology adoption
The global market for these products is tremendous and if systematically tapped there lies immense scope ahead, especially for the least developing economies as the latter virtually depend on a handful of agri-commodities to earn foreign exchange. Both the absolute and comparative advantages must be fully reaped [e.g., India produces grapes twice a year – a rare advantage and gift of nature that other leading producers do not have].
Especially, trade-in fruit and vegetable products have been among the most dynamic areas of international agricultural trade, stimulated by rising incomes and growing consumer interest in product variety, freshness, convenience, plus year-round availability. Undoubtedly, advances in production, post-harvest handling, processing, and logistical technologies — coupled with increased levels of international investment — have played a facilitating role.
These commodity markets, de facto, exhibit a complex political economy – domestically and internationally. Undoubtedly, the arcane nature of many policy interventions in these commodity markets and the many heterogeneous interests exacerbate this complexity. It must be agreed upon that identifying superior policy options is not difficult, but that the feasibility of reform depends on the power of vested interests and the ability of governments to identify tradeoffs and possible linkages that will allow them to pursue multiple goals [food security, income transfers, expansion of domestic value addition, etc.] more efficiently and prudently.
For developing countries, trade in these products has been attractive in the face of highly volatile or declining long-term trends in the prices for many traditional export products. This is also a fact simultaneously that in spite of the fact that many developing country suppliers have entered the field [e.g., Venezuela and Bangladesh in the mango market], relatively few have achieved significant and sustained success, which, adequately reflects the fact that the industry is fiercely competitive while rapidly changing.
The impact of change in technologies like new cultivars, application of micro-irrigation, improved quality seeds, plants, and production system management has increased production productivity, availability, and export. Undoubtedly, the horticulture sector has progressed to a fair extent despite several challenges and is currently focused on initiatives for sustainable development. With the ambitious production target set for the year 2022-23 as mentioned earlier in this article, and in addition to the application of smart systems, stipulated vertical growth would require the use of new cultivars, efficient water and nutrient management, and effective plant health management. At the same time, carefully drafted strategies for reduced post-harvest losses and building empowered human resources are equally critical.