Dr. Tarujyoti Buragohain NCAER surmises that high prices of horticulture products due to lack of necessary infrastructure and quality are the major constraint for India in the export market. Moreover diversifying into organic and value added horticulture products may help improve export prospects.
IBT: How have India’s horticulture exports progressed in the global market over the years? Which are the major product categories where India has been able to penetrate global markets?
Dr. Tarujyoti Buragohain: India’s horticulture exports progressed due to swelling global demand for horticulture products to meet the nutrition security of the growing population. Change in food habits and rising per capita incomes are the major factors behind this. The global population was about 6 billion in the year 2001 and it has increased to 7.7 billion in 2019. Secondly the per-capita GDP increased from US$ 5397 in 2001 to US$ 11436 in the year 2019.
The major horticulture products which India exports include viz; (i) spices (ii) cashew (iii) cashew nut shell liquid (iv) fruits-vegetable seeds (v) fresh fruits (vi) vegetable oil (vii) fresh vegetable (viii) processed vegetable (ix) processed fruits and juice (x)floriculture products (xi) tea (xii) coffee (xii) Ayush and herbal products and (xiii) cocoa products.
The export of spices has gone up from 239 thousand tonnes in 2001-02 to 1133.9 thousand tonnes in 2018-19 and accounts for about 37% of the total export value from horticulture products. India’s export earnings from horticulture products increased from Rs. 7998 crores in the year 2001-02 to Rs.63724 crores in the 2018-19.
IBT: What markets are we serving presently and what potential markets can be explored for exports? What are the challenges to expanding in these markets?
Dr. Tarujyoti Buragohain: The size of market varies across horticulture products. India is exporting its products to more than 100 countries. The major markets which India is serving include Nepal Bangladesh Bhutan Iran Qatar United States United Arab Emirates Oman Singapore Germany Panama Republic United Kingdom Hong Kong Sri Lanka Liberia Thailand Kuwait Bahrain Maldives Pakistan Afghanistan Korea Malaysia Ireland France Italy Canada Morocco Lebanon etc.
Consistent supply is a major challenge to expanding in these market. Climate change has been perceived as a threat and will have an impact on horticultural crops to maintain consistent supply. Secondly the challenge is quality of the product. It is imperative to establish direct farmer-exporter linkages to produce world class good quality products. India has been unable to compete with other countries like Vietnam Indonesia and Brazil in world’s markets.
IBT: What are the major changes in global trade of horticulture post-COVID?
Dr. Tarujyoti Buragohain: Despite low economic growth due to pandemic the global demand for horticulture products may remain unchanged post-COVID. Horticulture products – fruits and vegetables – are most essential products and included in our everyday diets. Farmers will continue to grow horticulture products for their livelihood and income. Apart from other products India has remained the highest exporter of spices in the world. The largest share of total spice exports from India goes to Saudi Arabia followed by USA Malaysia Thailand Sri Lanka and United Kingdom.
IBT: What are the opportunities for value addition and what are the constraints exporters face in this regard?
Dr. Tarujyoti Buragohain: Horticulture crops are characterised by high-value crops. According to National Accounts Statistics –GoI-2019 the value of horticulture crops was Rs 4.69 trillion in 2011-12 at constant prices which increased to Rs 5.54 trillion in 2017-18. The share of horticulture crops in relation to the value of all agricultural crops increased from 39 per cent in 2011-12 to 42 per cent during the same period.
Secondly the productivity of horticulture has increased from 8.8 tonnes per hectare in 2001-02 to 12.3 tonnes per hectare in 2018-19. The area under horticulture crops too has increased from 16.6 mha in 2001-2 to 25.5 mha in 2018-19. Production has also gone up from 146 million tonnes to 314 million tonnes during the same period. Thirdly the government announced Rs 1 trillion support for agriculture infrastructure development especially for cold storage warehousing and markets for farmers. This will encourage farmers to grow more horticulture products.
India is the second largest producer of fruits and vegetable after China. The market share has been low as various exporters face constraints in the global market. Major constraints include stiff market competition lack of brand status lack of advertisements poor market intelligence exporting in the form of fresh fruit and vegetables etc.
IBT: Albeit India produces more fruits & vegetables over cereals it is the latter which are exported primarily by India? Why is that the case? How can Indian exporters be encouraged to take up horticulture exports?
Dr. Tarujyoti Buragohain: India primarily exports basmati rice non- basmati rice wheat other cereals and pulses. The main reason is that India is the largest producer of rice and main producer of basmati rice in the world. Basmati rice is a high value crop and majority of farmers produce it for the purpose of exports. The demand for Basmati rice has been increasing over the years in the global market. Iran Saudi Arabia and Iraq are the three major importers of basmati rice from India continuously.
Exporters may be encouraged to take up more value added products for exports other than fresh vegetable and fruits. Government has been setting up mega food parks for processing fruits and vegetable into value-added products. Exporters may tie up with them as per their convenience.
IBT: Which are the top exporters in the world and what can we learn from other countries to boost its horticultural exports?
Dr. Tarujyoti Buragohain: US Netherlands China Germany Brazil France Spain Italy Canada Vietnam are the top exporters of most of the horticulture products in the globe. High price of the products due to lack of necessary infrastructure and quality are the major constraint for India to compete with other countries. Further many countries have imposed stringent quality requirements which make difficult for Indian exporters in the global market standard to enhance export. India ranked 2nd in production of fruits and vegetables but ranked 14th and 22nd in case of exports. Indian exporters may need to diversify their export basket to more organic and value-added products.
Tarujyoti Buragohain is associate fellow at NCAER. She has obtained Ph.D. in economics and has about 40 research publications in both national and international journals including Op-Ed. She is a recipient of Life Time Achievement award- conferred by The Society of Tropical Agriculture New Delhi (India). Her research interests include agricultural development rural development education health and infrastructure. The views expressed here are her own and not of her employer.
National Council of Applied Economic Research