Horticulture - The Growth Engine of Farm Sector

Introduction:

Horticulture sector is gaining more and more importance in the recent years among the farmers as it has wide scope covering range of crops such as fruit crops, vegetable crops, tuber crops, ornamental crops, medicinal and aromatic crops, spices and plantation crops etc. The diverse agro-climatic conditions prevailing in the country coupled with wide variability of soils has made it possible for the farmers to grow a large number of horticultural crops. Horticulture sector is the fastest growing sector within agriculture and it contributes in poverty alleviation, nutritional security and has ample scope for farmers to increase their income and livelihoods. The sector also supports a large number of agro-based industries which generate huge employment opportunities. India has emerged as the world's largest producer of coconut and the second largest producer and exporter of tea, coffee, cashew and spices. Only 2 percent of horticulture produce is processed, 0.4 percent is exported and 22 percent is lost or get wasted in market chain. Exports of fresh and processed fruits, vegetables, cut flowers, dried flowers have also been on the rise. The demand for variety of horticultural products is growing rapidly especially burgeoning market for processed fruits and vegetables as well as booming horticulture market is an evidence of the phenomenon growth which is expected to accelerate horticultural growth in the country. With such a trend the horticulture sector is set to assume a greater role and importance within the agriculture sector and eventually in the national economy. As a result of a number of innovations by researchers, thoughtful policy initiatives, institutional reforms availability of quality inputs, horticulture has become a sustainable and viable option for the small and marginal farmers. Lot of rural entrepreneurs are coming forward for taking up horticulture as a commercial venture.

Therefore, there is a great scope for the accelerating agricultural development through expansion of

horticultural crops and in the days to come horticulture is expected to be the growth engine of farm
sector.

Institutional and policy support for development of horticulture:

The horticultural sector has received lot of institutional support both by central and state governments. The National Horticulture Board has framed several programs in support of the development of horticulture sector. It has been encouraging the development of commercial horticulture through demonstration farms; developing post harvest management infrastructure; strengthening market information systems and maintaining horticultural database; assisting research

and development programmers and providing training and education to farmers and the processing industry for improving agronomic practices and adoption of new technologies.

Exploring opportunities for exports:

There are several opportunities for promotion of horticulture exports. (1) There is a need to promote

organic production of horticulture commodities and develop technologies for organic horticulture and

create awareness. There is also a need to develop guidelines and designate agencies for accreditation of such produce meeting international requirements. (2) There is vast scope of reducing imports of horticultural commodities like dates, nuts like almond, palm oil, raisins, cocoa and rubber. Area under such commodities needs to be increased. There is also need to develop commercial plantations of fruits like mangoes, Duran, longan, ambulant, etc (3) The need for having adequate, reliable and timely data in respect of import of commodities is necessary in the context of opening up of the economy. There should be on line records about quantity, value, quality, etc., of the commodities imported in the country so that both the government and interested entrepreneurs could make use of this information for various purposes. (4) India being a tropical country, it is necessary to concentrate efforts on tropical horticultural crops such as fruits like mango, litchi, sapota, passion fruit, aonla, bael and guava and plantation crops like coconut, cashew, cardamon, black pepper, tea and coffee. Since most of the developed and importing countries are in the temperate region the chances of increasing our market share with such crops in this region are more. Apart from this, India is also very rich in medicinal plants. (5) In the light of recent changes in the international trade, to exploit the potential for export of horticulture produce to its full capacity, sincere efforts are required to develop a full fledged Quality Assurance Machinery.

Addressing constraints in development of development of horticulture:

• Inadequate infrastructure: Horticulture produce is mostly perishable in nature that contributes to heavy losses in the availability and quality after harvest of crops and makes investment risk oriented. The post harvest handling accounts for 20 to 40 percent of the losses at different stages of grading, packing, storage, transport and finally marketing of both fresh and processed products. Such an enormous loss has proved a great handicap in tapping full production potential of the sector. The production and marketing of these commodities also suffer from the crippling uncertainty and instability of the domestic as well as export market conditions.

• Price fluctuations: Price fluctuations are common in horticulture sector also which lead to glut situation in individual commodities resulting in exploitation of the small and marginal farmers by the intermediaries. Insufficient technologies for commercial utilization of by-products and value added products also act as a damper for handling horticulture produce. Lack of sufficient processing units for production of quality output is a major bottleneck for these crops. Lack of adequate standards for quality produce also hinders the export prospects of these crops. As small and marginal growers predominate the production sector, individual processing facilities are not available due to lack of skill as well as investment capability which needs to be addressed through some policy interventions.

• Poor Marketing Infrastructure: Marketing is a major constraint and has a major role to play in

making the sector viable. Various intermediaries and cooperatives are involved in marketing. In some case fruits, the owners to the pre-harvest contractors also auction vegetables and flowers. The pre-harvest contract could be for one or even three years in perennial crops. The returns from such arrangements are very low. Such sales also result in poor upkeep of the orchards and the contractors

hesitate to make further investment in the upkeep of such orchards.

• High Investments: The high capital cost involved in establishing an orchard or rejuvenation of existing old unproductive plantation poses serious constraint in area expansion under these crops. The situation becomes all the more difficult in view of the large number of small holdings devoted to these crops which are essentially owned by weaker section, who have no means to invest, nor can afford to stand the burden of credit even if available.

• Long Gestation period: Most of fruits and plantation crops have long gestation period. This calls for liberalized credit facilities in easy instalments for repayment in the form of soft loans to small and

marginal farmers to be introduced if the benefits of the horticulture industry are to be fully exploited.

High cost of inputs and lack of enough incentives for production of quality varieties /species, product

diversification, value addition, etc. also hinder crops development.

• Post Harvest Losses: The horticulture produce suffers heavy post-harvest losses in the absence of

adequate post-harvest and marketing infrastructure viz; pre-cooling units, packing and grading sheds,

short and long term cold storage facilities, refrigerated containers, storage and phyto-sanitary facilities at airports. To minimize these losses, it is essential to analyse the contributing factors which

result into these losses.

• Bottlenecks in marketing: The horticulture marketing practices lack systems approach. The trading and marketing structure is very traditional and consists of a long chain of intermediaries. The

farm-gate price available to the farmers is only 25 percent of the retail price under Indian conditions

whereas the same is 70 percent in case of Dutch and US farmers, where more efficient marketing

system is in place.

• Distress sale of the Produce: Majority of the farmers sell their produce at the farm level to the village merchants, retailers, big producers or pre-harvest contractors due to urgent cash needs. They can not afford to transport their produce to the distant markets on account of non-availability of transport facilities, high transportation cost, malpractices in the market.

• Market Distortions: Trade and market distortions are many and some of these are high and unjust

trading and market charges levied on producersellers, delayed payment, pooling by traders and lack of open bid system. Malpractices are rampant and the national market operates in a highly segmented manner.

• Market Intelligence: Information regarding demand, supply, price, market outlook, knowledge of consumers’ preference, marketing channels and practices are important for marketing of horticulture produce, which is limited to the terminal markets only at the moment. There is also lack of knowledge and equipment for grading and packaging of fruits and vegetables. All these points need to be addressed.

• Exploitation by intermediaries: Small growers are un-organized and lack group action and bargaining power, as a result these farmers are exploited by the traders. The small and marginal farmers are not attended to properly by the commission agents. Small and marginal farmers have to wait for a long period for auction of their produce. This issue can be addressed through farm producers companies or any other innovative institutional mechanism.

The horticulture sector can grow at a faster pace by addressing above constraints and adopting strategies to address production and post production issues. These strategies shall include, improving productivity and production; reducing cost of production; improving quality of products for exports; value addition; marketing and export; price stabilization; strengthening of organizational support ;human resource development and addressing relevant policy issues.