Corporates eye floriculture as next booming sector

Mumbai, July 30 | Updated: Jul 31 2006, 06:04am hrs
After retailing, its floriculture industry the corporates are keen to enter into. Reliance, Tata Tea, ITC, Bharati group/Field Fresh, Thapar Groups and Century Textiles are just to name a few planning to invest and set up world size floriculture units.

The government has been encouraging corporate houses to setup large floriculture units with global scale and size that can meet the volume, consistency and quality demands of the large global buyers, said KS Money, chairman, Agricultural and Processed Food Products Export Development Authority (APEDA).

The global floriculture markets are gradually shifting from specialty shops to the super market chains, mainly in Europe. The big chains such as TESCO, Sainsbury, Wal-Mart, Sears, Carrefour, Metro, K-mart etc. are mass buyers who already have backward linkages with the Indian market in many other products. It would be easy for them to establish India in their floriculture products supply chain. The Indian floriculture industry provides variety, quality as well as consistent supply required by these chains, adds Money.

The government has started a floriculture revival fund and has started Agri-Export zones to encourage and improve production.

Money expects the exports from the industry to grow to Rs 1000 crores in two years. The current size of the domestic floriculture industry is hard to guess as it is highly unorganised, Moneys conservative estimates put it at around Rs 600 crores.

However, the going is not so easy. The industry has to reach a critical size as well as average land under cultivation before it reaps in the benefits of economies of scale such as the other east African countries, says Ramesh Lalwani, Joint President (Commercial), Century International, which has also started its operations in floriculture exports. The floriculture industry is not provided the same subsidies as the agriculture industry, the presence of which would be a great boost to the floriculture industry.

The international trade in floriculture currently stands at $ 11 billion and is projected to be $16 bn by 2010. Indias share however currently stands at meagre $0.06 bn (Rs 305 crore) or 0.6% of the total international trade. However, India has shown very significant growth from Rs. 18.83 crores (93-94) to Rs.305 crores (05-06). Though, is a very marginal player in the world floriculture trade, it has a strong potential for growth, given the inherent advantages of skilled manpower and right climatic conditions for growth of flowers among others.

After liberalisation, the government identified floriculture as a sunrise industry and accorded it 100% export oriented status. The liberalisation of industrial and trade policies paved the way for development of export oriented production of cut flowers.