India has an astonishing floriculture production area of over 103, 000 hectares. Small farms using antiquated growing systems produce tons of marigold, udupi jasmine, ambur jasmine, china aster, chrysanthemum, crossandra, gerbera, gladioli, lilium, carnation, orchid, anthurium, and bird of paradise. The infrastructure is terrible, but many farmers load baskets of fresh flowers on trains or buses to go as far as 650 km to the city street markets, which open only from 6 a.m. to 9 a.m. in the morning. There they crouch on the street pavement to sell yellow and orange marigold garlands, lotus blossoms, a wide variety of greens. Buyers have very little interest in stem length. The flower heads are strung into garlands for temple decorations, weddings celebrations, ‘karaga’ festival decorations and ‘thuroi’ the hand-tied round bouquets. The domestic Indian market is growing at 25% per year in the country, 40% per year in New Delhi.
By the measure of purchasing power parity, India now ranks (after the US, China and Japan) as the fourth largest economy in the world, growing at 9.4% per annum in 2006, and according to The Economist. Within 25 years, India’s GDP is forecasted to be, after China and the US, the third largest in the world. The potential of the booming Indian domestic market is enormous.
Modern export ventures
Indian export floriculture is not an offspring of this vast domestic flower industry but something quite apart. For more than a decade India has built modern greenhouses and adapted technology. In 2005-2006 Indian floriculture exports, of which just over half were dry flowers, reached USD 67.78 million. Still, India’s cut flower exports account for only 1% of the world’s commerce in fresh cut flowers. Of the 500 hectares devoted to ‘modern’ flowers, almost all is to produce roses.
Costs of Indian roses run from $0.04 to $0.10 per stem packed and at the airport ready to ship (depending whether interest and royalty costs are included). Freight to Europe is $2.20 to $2.50 per kg or US$0.075 per rose or about the same as the rose production cost. Average return for exported Indian roses at the VBA, during the September –March shipping season, including the benefits of the Valentine’s Day export flush, is around €0.20 per stem.
In Japan, the average price for Indian roses is 25-35 Yen per stem (€ 0.20) ($0.24). Freight to Japan is about $1.50 per kg or only 60% of the freight cost per kg to Europe, even though the actual distance to Japan is a greater. Therefore, because of the higher net return, it is not surprising that over half of the Indian roses are shipped to the Japanese.
As opposed to the roses, which go mainly to Amsterdam or Japan, the Indian dry flowers (statice, helichrysum, bottle gourd, cane and bamboo strips, wheat, corn and barley strips and a diverse basket of wild native species) are exported to a wide array of countries.
The 2nd International Flora Expo 2006 and an International Conference on Floriculture, entitled ‘Advantage India’ was held in New Delhi, September 8-10, 2006. It gave recognition to the importance of export floriculture to India. K S Money, Chairman of APEDA, the sponsoring organization, part of the Ministry of Commerce, welcomed thousands of guests. The honorable President of India, Dr. A P J Abdul Kalam, delivered an inspiring opening speech and made sure that one of the most lavish displays at the flower show was from the gardens of the Presidential residence. On the last day of the flower show, the doors were opened to an enthusiastic public.
Foreign delegations to Advantage India came from Europe, Japan and the Mideast and included the commercial manager of the VBA, and one of the directors of the NBV-UGA and the ex-manager of Flora Holland, together with a phalanx of Dutch vendors of equipment, young plants and consultancy within the framework of buyback arrangements.
A decade and a half have passed since Indian growers first exported flowers. Many of the initial rose farms failed due to micro-climate problems, lack of economies of scale, inappropriate technology and the fact that India is still far from being a logistics-driven economy. Conditions have substantially improved. APEDA has made important investments in the cold store, transport and airport facilities in seven major export cities. In India, relative returns on labour and capital are almost opposite to those of Northern Europe. Therefore Indian rose farms are not highly automated. In Pune, rose farms average 22 workers per hectare including grading and transport. This indicates by no means that Indian flower farms are primitive. The Indian farm managers and technicians are world class. They not only guide Indian floriculture with a sure hand, but predominate in floriculture farm management in Kenya and Ethiopia. They have designed excellent greenhouse structures appropriate to their climate and at one third the cost of structures imported from Europe. Authority and responsibility are shared in a collaborative management approach. Workers are very productive.
Women figure importantly as flower farm owners and managers. Women laborers are an integral part of Indian agriculture. They work with deftness and alacrity. Their aspirations are high, not for themselves, but for their children, for the next generation, for the sons and daughters they hope to send to college to become titans in IT or some other modern endeavor.
Breeder’s rights position
Some potential European importing clients decline to deal directly with Indian flower exporters because of Indian ambiguity about breeder’s rights. Under pressure from the European breeders, the Indian position has softened. Though more than half of the rose production may still be illegal, an increasing number of the bigger, better farms have made peace with the rose breeders. India is not a signator of UPOV and will continue to hesitate to sign that agreement. Instead it passed PPVAFR in 2001, an act for the Protection of Plant Varieties and Farmers’ Rights, which allows farmers to sow, exchange plants, share and sell farm produce without paying royalties as long as they do not label the variety. Dr. Malavika Dadlini of the Indian Agricultural Research Institute, a world recognized expert in seed science, defended this position, but she noted that ornamentals which are asexually propagated, with high value and exported into international commerce should accrue gains to the breeder. She even was categorical about the fact that multiplication of protected varieties was punishable by law. But she also pointed out that bio-piracy of (Indian) natural resources was illegal and unethical, a comment aimed at foreigners in the audience.
This is important because much of the world’s agricultural development work on new fruit and plant varieties is being done in India. The policy of the Indian government and the academicians is to distribute new types of planting material to domestic growers at cost without royalty protection or patents in an effort to swiftly increase agricultural productivity and quality. In floriculture, larger gower/exporters like Essar and Century are propagating top-grafts of roses of excellent quality, and in the same city, Pune, one of the world’s most important tissue culture laboratories is multiplying large quantities of plant material. India is also an exporter of flower seed. Dr. A. P. S. Gill has been the guiding light behind Punjab production of around 90 tons of flower seed grown on 300-400 hectares of land, and exported to Holland, France, England, Germany, the US and Japan.
Product of choice
But it is India’s roses which characterize floriculture exports. Refined and delicate Indian roses have become the product of choice of some Japanese and European florists. Rose exports from India to Japan fall short of demand.
Indian flower exporting is profitable enough to make it a viable, alternative diversification for big Indian companies currently in steel, shipping and construction, oil refining, cement and power. At present 90% of the rose exports come from farms that are subsidiaries of large firms. These companies now see that scaling up (plans of doubling the area in the next five years) will bring economic and marketing efficiencies to floriculture exports. Some of the local state governments are supporting this growth with incentives. Industrial parks for flower farms (provided with electricity, water, roads, packing facilities) have been created. One is located near Pune in the Maharashtra Industrial Development Corporation (MIDC). Other Agri Export Zones have been set up in Sikkim, Tamil Nadu, Uttaranchal and Karanataka. International funding for expansion is being offered by the Dutch government, including up to 50% financing for joint ventures is available from the Dutch Ministry of Economic affairs, the AVD. New entrants will probably continue to be large, well-financed Indian corporations. According to Navneesh Sharma, DGM-APEDA, leading corporations like Reliance, ITC, Tata Tea, Bharti Group /Field Fresh, Thapar Group, etc., have already responded to invitations and are planning investment into the sector.
Shri S. N. Menon, Secretary of the Indian Department of Commerce has set four floriculture objectives for 2010: 1) An increase of employment in domstic and export floriculture (including cut and dry flowers) to 1,000,000 people; 2) Social equity (employment of women) assured; 3) Floriculture production in all of the regions of India; and finally, 4) Value-added activities in the floriculture sector. The Indian domestic market is expected to double in size by 2010, so it is quite likely that these objectives will be achieved, and if so, India will be a flourishing, flower producing and consuming nation in the world.