Bunty Arora?s story seems straight out of a fairytale. He was still in school when his father passed away. Then, surviving took precedence over textbooks, and he perfected the art of trading in flowers. He was one of the earliest in his community to keep a cell phone; this was some 12 years back, when each incoming call cost Rs 16 a minute. Bunty remembers: ?My mother cried when I bought the phone ? we could barely make ends meet and the phone was so expensive. But I needed it. When I took dictation for the text to be written on bouquet cards, I ended up making many spelling mistakes because I am not educated enough.? Technology provided a better solution?he asked the clients to SMS the desired text.
Today this owner of Buds and Bloom at the Lado Sarai flower mandi in South Delhi requests you to email him the details. And he has an impressive list of corporate clients ? Cisco systems, Landmark, NDTV, Fidelity and so on. ?But education is important,? avers the barely-30-year-old trader who, over the years, has graduated from a cycle to a home in Gurgaon. And he is confident of going much further: ?There is a lot of scope in floriculture, especially because the government is providing 40% subsidy on floriculture projects.?
Happiness on the home front
India?s domestic floriculture market has grown from Rs 500 crore in 2005-06 to become more than Rs 1,000 crore strong in 2007-08. More than 50% of the floriculture units are based in the south zone, mainly in Karnataka, Andhra Pradesh and Tamil Nadu. West Bengal, Maharashtra and Rajasthan have large areas under floriculture. While flower production has stagnated in states like Maharashtra and West Bengal over the last two years, others like Karnataka, Gujarat, Jammu and Kashmir, Himachal Pradesh, Uttaranchal and some north eastern regions have entered the floriculture business in a big way.
According to the Agricultural and Processed Food Products Export Development Authority (Apeda), under the ministry of commerce, the total area under flower crops is estimated to be around 34,000 hectares. This includes 24,000 hectares under traditional flowers such as marigolds, jasmines, asters, roses, chrysanthemums and tuberoses, and 10,000 hectares under modern flowers like carnations, gerberas, gladioli and anthuriums.
Domestic flower production has been increasing annually, with a general shift from traditional flowers to cut flowers grown for export purposes. Liberalisation has of course given a strong impetus to entrepreneurs, for establishing export-oriented floriculture units under controlled climatic conditions. There are technical collaborations with foreign companies on their way too, to help increase India?s share in the global floriculture trade. The government has also approved more than 150 export-oriented units (EOUs) in the floriculture sector. These are coming up in different parts of the country, particularly around Pune, Chandigarh, Bangalore, Delhi and Hyderabad.
But a troubled export frontier
Floriculture exports comprise about 2% of India?s agro-export basket, and the government has identified floriculture as a fast emerging sector. According to Apeda data, the exports of flowers increased from Rs 221 crore during 2004-05 to Rs 652 crore during 2006-07. The major importers of live plants and bulbs are Italy, Germany, France, UK and the US. Germany has been the major importer of cut flowers. Exports to Japan have also jumped significantly over the last few years, going up from Rs 15.85 crore during 2004-05 to Rs 325 crore during 2006-07. During this period, exports to the Netherlands have nearly doubled, and those to countries like the US, UK and Germany have seen marginal increases. There have also been forays into new markets like Chile, Jamaica, Iran and Puerto Rico. In fact India?s fresh flowers are now reaching about 87 countries.
But trade circles reveal that the floriculture industry has been going through a rough phase lately as far as its exports are concerned. In fact, exports have fallen drastically in the last fiscal. According to the latest figure compiled by Apeda, they have declined by a whopping 48.21% from Rs 652 crore during 2006-07 to Rs 338 crore in the last fiscal. According to Asit Tripathy, Chairman, Apeda, one reason for this downturn is the significant appreciation of the rupee, which has eroded profit margins for the Indian exporters. The scarcity of new investments into procuring new varieties is another factor. Tripathy says, ?The range of products have remained unchanged over the years, which has also impacted exports as the flowers market abroad is extremely dynamic.? Additionally, domestic demand has been rising at more than 25% annually, which has made exports not ?that lucrative?. This demand is being driven by India?s 300 million strong middle class, for whom flowers are emerging as an important lifestyle product.
For augmenting exports, there is a need to diversify commercial production from traditional areas to non-traditional areas. An Apeda report points out, ?This would enable large off season production leading to larger surplus for exports.? Currently, exports commence only in September and peak between December and February. Diversification will offer comparatively lower costs of production, and cater ?to import markets whose off seasons matches with India?s off season but where supplies get badly depleted because of climatic factors?.
S Jafar Naqvi, chief co-coordinator of the Pune based Flora Expo and president of iFlora says: ?The downtrend in exports has its positive side as well, as it indicates the maturity of the domestic market, which is growing steadily.? He points to the doubling of domestic sales in the 2007-08 fiscal, which has simultaneously seen a drastic decline in exports. But Naqvi is concerned about the shutting down of some mega floriculture export units in the Pune and Bangalore regions, because ?although some new units have come up, they are much smaller in size.? In the Pune region, out of the 26 big units which were functioning earlier, only 10 or 11 remain in business. In the Talegaon floriculture park, which got off to a promising start by allotting land to nearly 100 companies, only 25-30 small units are actually operating. The real estate boom has also contributed to the closing down of these Pune and Bangalore units.
But Arora has plans for setting up a farm full of carnations and lilies. There?s obvious enthusiasm in his eyes as he explains: ?A one acre farm would cost approximately Rs 32 lakh. Add to that the cost of bulbs?at Rs 35 each, I?ll need about 8,000 bulbs for the entire farm,? he says, giving further details about the distances at which the bulbs and the water drips will be placed.
Arora is also one of the three wholesale traders of bamboo shoots in north India. Thanks to the growing popularity of Feng Shui, which prescribes bamboo shoots to help enhance the positive energies in our living spaces, this business has grown well. Estimates indicate that the bamboo shoots wholesale market is worth Rs 30 lakh a month in Delhi alone.
Back to the bazaar
In the heart of the capital, on Janpath, one of India?s oldest and biggest flower markets literally blooms at dawn and vanishes by 9am. Here, one can get the best rates for everything from Pune carnations, Uttaranchal lilies, Thai orchids and other flowers from around the world. The farmer and consumer jostle with the masakhor (trader) and the aadti (commissioning agent). The Lado Sarai mandi, which works 24×7, on the other hand, is just 12 years old. It has close to 85 shops, employs around 1,000 people, and turns over Rs 10 lakh a day. Finding parking here is difficult even at 6am, as the Skodas, the Mercs and the Hondas keep company with the humble Maruti, and the neighbourhood florists loading up their bicycles intermingle with the Gucci-flashing elite.
These vibrant flower markets in Delhi and its suburbs reflect how fast the demand for flowers is growing among the urban consumers. In fact, flowers have gradually emerged as an integral part of the professional and personal lives of urbanites across the country. Of course, there has always been a significant demand for traditional flowers used during religious ceremonies, especially around temple towns. But the commercial cultivation of flowers for exports and for the corporate houses really took off only around 15 years ago.
However, the situation is not as rosy as it may seem on the surface. ?The government has set up a new mandi in Okhla (south of Delhi) and wants us to shift there. But that?s a small space and it has a limited parking area. Another mandi is coming up in Ghazipur. The problem is that only 15-16 people in the Lado Sarai mandi have licenses. Where will the rest go?? asks Mohammad Shakir, the head of Flower and Cut Flower Grower and Welfare Association. There are several people who have migrated and settled in this mandi from adjoining states. Their livelihoods are also at stake.
Generally, floriculture is set to be a major agri-business segment. Companies such as Reliance, ITC, Tata Tea, Bharti Group, AV Birla, Big Apple, Namdhari Fresh, Subhiksha and Shopper?s Stop are expected to either get into the business themselves or tap it as bulk buyers.The government is also in the process of setting up model Floriculture Regional Centres in Chennai, Bangalore, Trivandrum, Pune, Lucknow, Kolkata, Mohali, Srinagar and Gangtok, to conserve important varieties of typical regional flowers and arrange for their large-scale multiplication. The setting up of six Agro Export Zones for floriculture and a large number of flower clusters under the National Horticulture Mission are expected to provide a further boost to both the domestic and international trade.