THE STUDY: SCOPE AND OBJECTIVES
Introduction Flowers are a symbol of love, beauty and tranquillity. They are rich in recreational as well as aesthetic values. The flowers are used for worshipping, making garlands, as offering to Gods and by ladies for decorating their hair. This is a huge market, the exact size of which is not known. There are no reliable statistics on their cultivation which undertaken in all parts of the country. Flowers are also an important source of scent, glucose, marriage decorations and raw materials in oil industries (Tale et al 2003). The flower cultivation can be delineated into two broad groups: traditional flowers and non- traditional flowers or modern flower, more often also referred to as cut flowers. While the traditional flowers are cultivated mainly for domestic consumption, the cultivation of cut flowers is mainly for exports to other countries though some cut flowers are also sold in domestic market. The contemporary cut flowers like rose, gladiolus, tuberose and carnation, which are now been grown on large scale, are being used for bouquets, gifts, and also for decorating homes and work places. Many of the traditional flowers are also being cultivated as cut flowers, though the variety of flower cultivated, the method of cultivation adopted or the stage of its harvesting may be different. The cut flowers generally have relatively better keeping quality, longer vase life, are more sensitive to climatic condition as compared to the traditional flowers and fetch a higher unit price in the market. While the major traditional flowers cultivated in the country include rose (desi), marigold, jasmine, chrysanthemum, crossandra and aster; the important cut flowers cultivated include rose, gladiolus, carnation, tuberose, and orchids (Malik 1998). The present study is an assessment of the unorganized domestic market for traditional and cut flowers. The study has focussed upon existing marketing practices, present valuechain and constraints in marketing of flowers and challenges faced thereof.
Project backdrop AKRSP (I) has attempted to promote floriculture in the tribal area with the support of Tribal Sub-Plan department of GOI. With an objective to provide alternative livelihood options to tribal farmers, AKRSP (I) implemented a floriculture program (Rose Wadi) with 15 tribal farmers of Netrang cluster in two blocks (Valia and Zagadia) of Bharuch district. These beneficiaries were provided 1400 English Rose (Gladiator Tea-red variety) flower grafts each to cultivate in 0.5 acres of land. After the rose harvesting, these beneficiaries experienced constraints on marketing. Initially the project was planned for three years, but due to lack of positive response from the beneficiaries, TSP's financial support was discontinued after the first year only. As the programme is now a year and half duration old, AKRSP (I) felt a need to study the future value of this project in light of its present status. As both AKRSP (I) and TSP have invested their resources in this innovative project implemented on experimental basis with an idea of scaling up and replication in other areas too, the study has analyzed the experiences and learnings from the project. The study was expected to come up with suggestions and recommendations that can help to make the project viable and sustainable. Scope and Objectives The term floriculture, as classified in the Harmonised Product Code System (HS Codes) for commodities includes a variety of products such as cut-flowers, plants, cuttings, bulbs, tubers, dried flower or leaves etc. (Malik 1998). Floriculture for the present study, has, however been used in a more restrictive connotation to imply cultivation and marketing of Fresh flowers only. Fresh flower cultivation involves cultivation of both traditional and cut flowers. The study was undertaken in the backdrop of the Rose Wadi program implemented by AKRSP (I) with the support from Tribal Sub-Plan (TSP) in the study area. The beneficiaries are involved in cultivation of English Roses. The cultivation of cut flowers is mainly for exports to other countries, though some cut flowers (mainly Roses) are also sold in domestic market. The demand of such flowers has considerably increased in the cities in recent years.
The Export oriented floriculture is a relatively new enterprise in India, though farmers in India have been cultivating flowers for decades. However unlike flower cultivation for domestic market, export oriented flower cultivation is a very specialized activity requiring specialized inputs, know how, skills, materials and equipment. By its very nature such an activity is bound to be highly capital intensive. Given the strict cultivation and management requirements for export oriented floriculture, the cultivation of flower for such purposes can not be practiced by all the farmers who are cultivating flowers for domestic markets. As such export oriented floriculture activity has come up mainly in the organized corporate sector by well off entrepreneurs rather than in the farming sector per se (Malik 1998). In the present context, cultivation of English Roses undertaken by the beneficiaries of the Rose Wadi project in the study area is purely done with local technologies as in traditional flower cultivation. Moreover the present scale of the production from all the beneficiaries makes it unviable and unfit for export markets. Given the nature of the crop selected, its special cultivation requirements and characteristics, the fact that its cultivation has started only on a limited scale and that too only recently, the study has focussed upon analysis of domestic markets only, for these flowers. The Rose Wadi program was started in September, 2002 with 15 tribal farmers of Netrang cluster (blocks Valia and Zagadia) in Bharuch district of south Gujarat. The markets (both existing and potential) identified are Rajpipala (48 km from Netrang), Bharuch (65 km), Surat (100 km) and Baroda (%^ km). While the mandate for the present study was to provide a sustainable marketing plan for the Rose Wadi program, the study has provided lessons for improving the livelihoods of tribal poor in the region through innovations like floriculture. The main purpose of the present study therefore is to develop a broad understanding of the functioning of the cut flower business (particularly English Roses), the status and potential of reachable markets and in the process ascertain what needs to be done thereby suggesting a sustainable marketing plan for the produce of the beneficiaries of the Rose Wadi project. The specific objectives of the study are:
1. To understand the dynamics of Floriculture market (traditional and major cut flowers like Rose) with respect to the status of Floriculture in the study area. 2. To identify major domestic markets in the vicinity and understand their demandsupply and preference pattern. 3. To identify existing practices, value-chain, issues, constraints and challenges in flower marketing in the region. 4. To analyze the performance and results of the Rose Wadi program implemented by AKRSP (I) with the support from TSP in the study area. 5. To suggest a viable and sustainable marketing plan for Floriculture produce of the beneficiaries of the Rose Wadi program. Methodology and Limitations The present document is limited to floriculture activity including both traditional and cut flowers prevailing in the region and the domestic markets (both existing and potential) for them. The study chiefly focuses on the single cut flower (English Gladiator Tea-red variety Rose) cultivated and marketed in the region, through the Rose Wadi program. It excludes the export oriented floriculture activity in the study area. The study was conducted in Bharuch-Surat-Narmada programme area of AKRSP (I). AKRSP (I) started its programme activities in the tribal, rainfed districts of Bharuch, Surat and Narmada through its Netrang Spearhead Team (SHT). At present, it has been covering seven blocks of the three districts which are considered among the poorest 35 blocks in the 184 blocks of Gujarat. The study involved collection of primary data regarding the economics of flower cultivation and marketing from the beneficiaries of the Rose Wadi program by means of semi-structured interviews conducted with them. This also involved visits to their fields (Wadi) and accompanying them to the markets to observe and understand the current cultivation and marketing practices by them. This helped in understanding their perception about the trade and constraints that they face in marketing of their produce. Market surveys were conducted in major wholesale and retail markets in the area. Three major wholesale markets at Bharuch, Surat and Baroda were identified and studied
through interviews with some of the traders operating their. The traders for interviews were chosen as per convenience and accessibility. This helped in understanding the demand and price pattern round the year and supply gaps (if any) in these markets with respect to the specific product and period in which it occurs. Prominent retail points in these cities were also identified and survey was conducted to understand the preference pattern across major products. A retailer at Rajpipala was also interviewed where a couple of beneficiaries are presently selling their produce. Secondary data from the records of AKRSP (I), Line departments and other agencies (Government and Non-government) was also consulted for the study. The production and trade of flowers in the domestic market is completely unorganized and no reliable quantitative data concerning their production, number of varieties cultivated, market arrivals, prices etc. are available. Further our repeated attempts to interview the owners/traders of floriculture units and major retailers on some of the aspects relevant for the study were usually not met with success. Most of them didn’t want to share their experiences especially about margins, returns etc. Organisation of the Report The report is divided into six sections. The section II gives the present status of flower cultivation in India and the study area. It also presents an analysis of performance and results of the Rose Wadi program and finally the economics in cultivation of English Roses (Gladiator Tea-red variety). Section III analyses the domestic markets identified in the study area, also highlighting the problems faced by the flower producers in marketing of their produce. This is followed by (in section III and IV) listing the results/findings and suggestions to the organisation for renovation of the Rose Wadi Program in order to achieve its objectives. The last section attempts to list some recommendations in the preparation of a Marketing Plan for the program.
PRESENT STATUS
Flower Cultivation in India India has a wide range of climate and soil conditions which enable cultivation of an array of horticultural crops such as fruits, vegetables, floricultural plants, plantation crops, and spices, medicinal and aromatic plants. Over the past one decade, this sector has emerged as a viable diversification option for livelihood enhancement of farmers and generating large foreign exchange earnings. Traditionally, flowers have been grown in India for aesthetic, social functions besides extraction of essential oil and manufacturing of perfumes. Traditional flowers are mainly cultivated for domestic consumption whereas cultivation of cut flowers is done mainly for exports to other countries though come cut flowers are also sold in the domestic market. Recently the demand of cut flowers in domestic market has increased considerably but it is still limited to metros and big cities. The contemporary cut flowers like rose, gladiolus, tuberose, and carnation, which are now being grown on large scale, are mainly used for bouquets, gifts, and also for decorating homes and work places (Report of SAC-C, 2001). The Indian floriculture industry is a more recent development. The internal turnover of floriculture items used for pooja and cosmetics was around Rs 215 crore in 1999. There has, however, been a marked growth in exports of floriculture items. The area under floriculture and production has been continuously increasing in India. The following table gives the area under cultivation and production from 1993-94 to 2000-01.
Table 1: Area and Production of Flowers in India
Area and Production of Flowers in India (1993-94 to 2000-01) Production Year Area (In ' 000 Ha.) Loose (In ' 000 MT) Cut (In Million No.) 1993-94 53.3 232.5 555.2 1994-95 59.9 260.6 519.4 1995-96 81.9 333.8 536.8 1996-97 71.2 366.3 615.2 1997-98 73.5 365.7 622.2 1998-99 74 418.8 642.8 1999-00 88.6 509.2 680.6 2000-01 98.4 556.4 803.5 Source: Indian Horticulture Database 2002, National Horticulture Board, Government of India.
The production of loose traditional flowers has increased by 139.13% during the given period while at the same time the production of cut flowers has increased by only 44.72%. The acreage has increased by 84%; however from the given growth of production, it is clear that the major portion of increased acreage has been devoted for cultivation of traditional loose flowers. The volume of trade in the domestic market is estimated to be around Rs. 500 crores. According to an earlier survey done by ICAR, flowers are grown in about 4000 hectares for commercial purposes with about 10500 tonnes of cut flowers worth Rs 9.26 crores sold annually in the markets of Bombay, Kolkata, Madras, Bangalore and Delhi. However with an increase in demand of cut flowers in recent years, the production is estimated to have gone up considerably. Consequent upon the rapid development of hotel and tourism industry, there has been a sudden rise in the number of florist’s shop and kiosks in the metropolitan cities. (Handbook of Agriculture 1997) Consumption of flowers in the southern States is much higher than in the northern States. The species of flowers cultivated in different regions however differ according to the prevailing demand pattern. During the last few years there has been drastic change in flower trade of modern flowers in Bombay, Pune, Bangalore, Chennai, Hyderabad, Delhi, Chandigarh, Lucknow and Calcutta.
The pattern of regional distribution of traditional flower cultivation is influenced by the extent to which prevailing agro-climatic conditions match with those required for flower cultivation. Apart from suitability of agro-climatic conditions, another important factor which influence flower cultivation is the nearness of market centres. Due to short shelf life, the cultivation of traditional flowers has often tended to be concentrated around places where there is a ready consumption market in the vicinity (Malik 1998). The Rose Wadi Program In order to achieve an integrated overall development of interior, remote and socioeconomically backward tribal regions of the country, the strategy of Tribal Sub-Plan (TSP) was evolved in the Fifth Five Year Plan, with an approach of Integrated Tribal Development Projects (ITDPs) covering thickly tribal populated talukas. In Gujarat there are 12 Integrated Tribal Development project areas viz. Palanpur (Banaskantha), Khedbhrahma (Sabarkantha), Dahod (Dahod), Godhara (Godhara), Chhotauepur (Vadodara), Rajpipla (Narmada), Bharuch (Bharuch), Mandvi (Surat), Songadh (Surat), Vansda (Navsari), Valsad (Valsad), Ahwa (Dang). Tribal Sub-Plan (TSP) requested AKRSP (I) to promote Rose Wadi in its Bharuch-SuratNarmada programme area, with an objective to provide alternative livelihood options to tribal farmers so that they could enhance their household incomes in a sustainable manner. The Rose Wadi program was started in September 2002, with 15 tribal beneficiaries of Netrang cluster from blocks Valia and Zagadia of south Gujarat. Assured irrigation facility was the main criteria to select the beneficiaries. The Extension Volunteers (EVs) of AKRSP (I) in the villages, after a series of meetings with the farmers, identified 30 farmers, out of which 15 were finally selected by the staff of AKRSP (I) through a discussion on economics of flower cultivation, productivity and marketing with the farmers. Subsequently, two exposure/demonstration visits were held in Nasik in order to understand the process of cultivation and marketing.
At present half of the total beneficiaries of the program have discontinued the cultivation and marketing of flowers due to constraints faced by them in the marketing of flowers. Those who are still continuing the business are marketing their produce in the markets of Netrang, Rajpipala, Bharuch and Surat. After interviews with several of the beneficiaries of the project the following main issues/constraints were found to be faced by them: 1. The market risk is perceived to be too high to them compared to the production risk which they are willing to accept as they felt cultivation of roses, a better alternative than other cash crops. 2. Lack of a marketing infrastructure is a common constraint faced by almost all of them. As floriculture is altogether a new business proposition in the area, there is no infrastructure or information about marketing of their produce. According to them, all the exposure or demonstration visits arranged by AKRSP (I) dealt only with the cultivation or production part but the marketing part of the business was neglected from the beginning and was fully left on them. 3. Limited potential of the nearby accessible markets like Rajpipala is also a problem faced by them. Two of the beneficiaries are presently selling their produce at Rajpipala to a retailer (which is the only prominent retailer in the city). But this retailer has a limited capacity which leaves other beneficiaries to look for other markets of the produce. 4. The perishable nature of their produce is also a constraint faced by them as there is no storage facility like refrigeration. According to them the Rose flowers stays fresh for five days in winters (if stored in a cool place) but in summers it comes down to only one day. Export oriented cultivation of flowers using technologies like green houses which is highly input intensive increases the shelf life of the produce. 5. Lack of proper transport facility is also a major constraint for them. The farmers use the traditional means of transport like buses, tempo etc. for reaching the markets which are limited (in both number and reach), unreliable and mostly nonviable. This study has tried to analyse the Rose Wadi Program through “The Learning Process Approach” of rural development programming developed by David C. Korten.
According to Korten, “the performance of a development program can be characterised as a function of the ‘fit’ achieved between beneficiaries, program and the assisting organisation.” In other words, a development program is bound to fail in achieving its objectives unless there is a close correspondence between: beneficiary needs and program outputs; program task requirements and the distinctive competence of the assisting organisation; and the mechanisms for demand expression and the decision processes of the assisting organisation (Korten 1981). Figure 1: Schematic representation of Fit requirements*
PROGRAMME OUTPUTS
TASK REQUIREMENTS
COMPETENCIES
NEEDS
BENEFICIARIES
DEMAND EXPRESSION
ORGANISATION DECISION PROCESS
*Extract from Rural Participation Review 2 (Ithaca, NY: Rural Development Committee, Cornell University, Winter 1981)
The appropriateness and requirement of these fits varies with different programs with respect to its time and circumstance. Every program finds a particular solution in terms of requirement of these fit appropriate to its time and circumstance. They are developed over a period of time in a particular set of conditions. Any attempt of replication of the
experiences of one program or an organisational blueprint, elsewhere, is likely to fail (Korten 1981). As Korten says, “it is to the process of their (fit requirements) development that we must look for the most useful lessons.” We look at the Rose Wadi project according to the above framework between the program, beneficiaries and the assisting organisation i.e. AKRSP (I). The three fit requirements and the extent of correspondence between them can be seen as follows: 1. Fit between outputs of the Rose Wadi program and the needs of the beneficiaries: The 7 blocks where AKRSP (I) is working in the Netrang region are among the poorest 35 blocks in the whole state. It is largely a backward tribal area with tribal population of almost 41% of the total. The tribes were originally scattered over all the districts, practicing hunting and shifting cultivation. Gradually by 50’s they got settled, largely in the hill areas, through allocations of land. Agriculture became their main activity; however, many of them are only small and marginal farmers. With increase in population, the small size of landholdings is getting even smaller and unable to sustain families. Also Bharuch district as a whole has only 12% of land under irrigation, with a much lower percentage (5%) in the tribal areas in which AKRSP (I) focuses. A sizeable section distressfully migrate to the industrial areas and work there as seasonal labourers. These people have found out this temporary solution and live in sub-human condition. The large scale distress migration is linked to the resources (land, cattle, forest etc.) available at the village level. There is a need to develop additional and alternative livelihood options through off-farm and non-farm activities to provide sustainable occupations. Needs of people are categorised into three sets as immediate, short term and long term on the basis of significance and priority they attach towards their fulfilment. But needs of people varies with respect to their socioeconomic class in the society. The following table shows the major identified needs of people coming from three different strata of people of our study area. These needs are further classified as immediate, short term and long term.
Table 2: Needs of different Socio-economic classes of society (in the study area) Needs Immediate
Short term
Landless
Marginal/Small
Medium/Large
Food security,
farmers Additional/alternative
farmers Irrigation facility,
Sustainable occupation
livelihood options to
Institutional credit &
in the village to stop
stop seasonal distress
extension facility
migration
migration and high
Access to amenities
indebtedness Irrigation facility,
Improving
like health, safe
Institutional credit &
productivity of land,
drinking water &
extension facility
Agricultural inputs,
education Long term
Enhancing household
Improving their quality
Improving
income Basic infrastructure
of life from the present
productivity of land,
at the village level
sub-human conditions
Improving their quality of life
Source: Beneficiary interviews and AKRSP (I) yearly reports
Here we are assuming that marginal farmers have to migrate to earn their living in lean agriculture seasons or in seasons of no rains since they have no irrigation facility. These needs were identified after discussions with the villagers in the study area and the staff of AKRSP (I). The Rose Wadi project was implemented with an objective of promoting floriculture as a means of enhancing the incomes of tribal farmers in a sustainable manner. The output of the program would be in terms of better prices for the produce and a better option for the existing conventional agriculture. This would also mean better utilisation of resources like land, labour and inputs. So we can say that the outputs of the program are in correspondence with the immediate needs of the marginal farmers and small farmers without a sustainable
irrigation facility. Medium and Large farmers having irrigation facility in their fields are cultivating conventional crops and are selling it in the assured markets. Therefore they didn’t perceive the floriculture as a better option than the conventional crops because for them, marginal productivity of labour in flower cultivation is not much high. The headache cost perceived by them in cultivation and marketing of flowers is high. Also, at the present scale, on which the Rose Wadi program was implemented, the centrality of income generated from flower cultivation is not higher compared to that from the conventional agriculture. Also they have all the facilities to grow even the highly input intensive crops that can fetch better prices to them. The wadi land by such farmers is generally used for household consumption purposes only. From our experiences too, we have found that most of those who have stopped cultivating the roses or rooted out the rose plants that have been provided to them by the Rose Wadi program belong to this (Medium & Large farmers) section of farmers. Also because assured irrigation facility was the prime criteria in the beneficiary selection due to the nature of cultivation, some interested farmers lacking these facilities are left out in this program. Generally women in the household care for the wadi lands and are involved in the cultivation of flowers, vegetables etc. for household consumption, it would have been better to involve women as beneficiaries by imparting some skills in them about floriculture. The outputs of the program could have helped in extra income generation for the women and enhanced participation of women in economic activities. 2. Fit between task requirements of the program and competence of the organisation: The next fit requirement is between the task requirements or what needs to be done in implementing the program and the competence of the assisting organisation to carry out those tasks. The different task requirements of the Rose Wadi program can be listed as follows:
•
Planning
•
Selection of beneficiaries
•
Capacity building
•
Logistics
•
Input supply
•
Market linkage
•
Infrastructure development
•
Monitoring & Evaluation
These task requirements are objective (not imaginary) and must be performed to implement the program. Each of the above tasks includes a number of activities and has different mechanism of performing. This mechanism is to be developed by the assisting organisation.
This requires different nature and level of
competence in the staff of the organisation. The competencies expected in the staff can be classified as technical, social and motivational competence. All of them are equally important but each task requires them in different proportions. A right mix of all the three is conducive for the organisation as a whole. In the Rose Wadi project, the technical know-how of floriculture (English roses in particular) is required. This includes all the aspects of cultivation of the crop including various pre and post harvest practices. The program ideally should also have involved the tasks of market linkages and laying marketing infrastructure. For that marketing skills are required in the staff of the organisation. But both these tasks and the competence seem to remain neglected in this program. The social skills are required in the program personnel for building a rapport with the target beneficiaries and ensuring their participation in the program. They are also required in sharing of knowledge and resources with villagers to create a fit between needs, actions and capacities of the assisting organisation. Finally the motivational skills are required to motivate both the field staff and the beneficiaries towards achievement of the objectives of the program. It is required
for organising and mobilizing people towards collective action in their larger benefit. In order to perform the task required for implementation of Rose Wadi program the organisation AKRSP (I) should try to acquire those competencies, which it is lacking. 3. Fit between the mechanism of demand expression of the beneficiaries and decision process of the organisation: This is the most difficult fit to achieve in a particular setting of a development program, target beneficiaries and the assisting organisation. It is between the mechanism through which the beneficiaries express their needs and demands and the decision process or institutionalized environment of the organisation. In the Rose Wadi program, the extension volunteers after a number of meetings with the farmers identified 30 farmers as probable beneficiaries. Out of these 30 farmers, the AKRSP (I) staff selected 15 farmers through discussions on productivity, marketing and economics of flower marketing. It looks as if the beneficiaries have been selected in haste without proper dissemination of information about the project in the villages. Ideally any program must be discussed thoroughly before implementing through organized meetings in Gram Sabhas, Panchayats, GVMs, MVMs and so on. This ensures participation from all sections of society in planning, implementation and monitoring of any development program. This fit seems to be inadequate in this program that has resulted in inappropriate selection of beneficiaries. Consequently we saw earlier that the fit between the beneficiary needs and outputs of the program is also not adequately achieved.
Economics of English Rose Cultivation In floriculture or flower production, Cut flowers have assumed a prominent place with respect to the type of flowers, method of cultivation, marketing and end consumer use: 1. From amongst the wide range of flowers, only certain type of flowers are grown as cut flowers because of their special features, particularly long stem or stalk viz. Rose, Carnation, Gerbera, Gladiolus, Tuberose, Anthodium, etc. 2. Open field cultivation has been a traditional practice, which is a relatively cheaper method. In modern "Hi-tech" method the cut flowers are grown in polyhouses/greenhouses requiring high capital investment. But the quality of flowers produced is superior, because inside climate or micro-climate such as temperature, humidity, light, ventilation etc is controlled. Even water application is also controlled. Therefore, the quality of flowers is better. They are uniform in size, colour, freshness etc. Moreover flowers can be produced throughout the year to meet the market demand-domestic as well as foreign. Since flowers are of better quality, they fetch higher prices. 3. Since cut flowers are of specific type and produced in polyhouses they are fresh and tender and since they are produced for specific purpose, great care is needed in their marketing viz. packing, handling, storage and transport. There should be minimum handling and transport should be quick with cooling and refrigeration facility. This is particularly necessary for cut flowers, which are produced for, export purpose. 4. Final consumer use of cut flowers is different from other flowers. Their use is of more sophisticated nature in educated and well-to-do segment of consumers. Cut flowers are mainly used for preparing bouquets, which are used in functions and ceremonies to welcome guests, VIPs and to felicitate great utility and hence fetch high prices. (Source: www.indiaagronet.com)
The beneficiaries of the Rose Wadi program were given 1400 grafts of English Rose (Gladiator Tea-red variety) to cultivate in their wadi land of 0.5 acre. Through interviews with the beneficiaries, we tried to understand the economics of the English Rose cultivation. The following calculations are done based on the experiences of respondents.
It should be noted that the costs of grafts, input supply, watering, and capacity building was borne entirely by TSP for the first year. The life cycle of the plants is 3 years and their gestation period was 2-3 months. The survival rate of the flower grafts was found to be almost 75 percent. The expenditure incurred per year in the cultivation of English roses is depicted as follows: Table 3: Total annual expenditure incurred in cultivation of English Roses (in 0.5 acres) Expenditure
Total (Rs. per year)
Flower grafts 1400 x Rs. 8.5 = Rs. 11900 (provided by TSP) Urea
75 Kg x Rs. 8/Kg
600
DAP
200 Kg x Rs. 11/Kg
2200
Potash
100 Kg x Rs. 16/Kg
1600
Pesticides
2.4 Kg x Rs. 400/Kg
960
Electricity for motor
(Yearly)
1500
Local labour
7 days x Rs. 25 x 12
2100
Travel (Rajpipala market)
15 days x Rs. 30 x 12
5400
Total Including cost of flower grafts
26260
Excluding cost of flower grafts
14360
Source: Beneficiary Interview
The nearest assured market where two of the beneficiaries are presently selling their produce is at Rajpipala. The farmers have a prior agreement with the retailer at Rajpipala, who pays them Rs. 1 per flower. But they face problems of limited demand. The demand of flowers in lean season is on average 150 and it goes up to an approximate of 450-500 flowers in peak seasons. The income and profits generated by selling the produce (at Rajpipala market) is as follows: Table 4: Profits generated in selling flowers (at Rajpipala market)
Lean season (May to September) No of flowers sold (per visit) 150 Price per flower Rs. 1 Total (per day) Rs. 150 Number of market visits 15 ( per month) Income (per month) Total (per year) Profit (considering whole
( per month) Rs. 2250 Income (per month) Rs. 27000 Total (per year) Profit (considering whole
year as lean season) •
•
First year (after
Peak season (October to April) No of flowers sold (per visit) 450 Price per flower Rs. 1 Total (per day) Rs. 450 Number of market visits 15
year as peak season) Rs. 740
•
First year (after
accounting for
accounting for
expenditure on flower
expenditure on flower
grafts)
grafts)
Second and Third
Rs. 6750 Rs. 81000
Rs. 12640
year
•
Second and Third
Rs. 54740
Rs. 66640
year
Actual Profit •
First year (after accounting for
Rs. 32240
expenditure on flower grafts) •
Second and Third year
Rs. 44140
These profits are calculated on the basis of number of flowers sold and not produced. Since absence of permanent and assured markets is the constraint faced by the farmers, we have assumed that production is more than what these farmers are able to sell. The profits will be much greater if they could sell all the flowers that they are producing. There is a considerable difference between the profits in the lean and peak seasons due to high fluctuation in the demand. Also in lean seasons of monsoon, the production increases a bit but demand falls. Therefore farmers face huge market constraint in this season. Applying a conservative approach, we assumed that average 2 flowers are produced by 500 plants (50 % of the total live plants) at a time, every third day. The total production per month would be 10000. Assuming an assured and permanent market for all these flowers the profits will be as follows:
Table 5: Annual Production and Profits generated in selling (at Rajpipala market) Heads Flowers Produced Income at Rs. 1 per flower Income at Rs. 0.5 per
First year 120000 120000 60000
Second year 120000 120000 60000
Third year 120000 120000 60000
flower Expenditure* Profit (Rs. 1 per flower) Profit (Rs. 0.5 per flower)
26260 93740 33740
14360 105640 45640
14360 105640 45640
* Expenditure including travel/transport is considered same (Table 3) and may vary with other markets
This show an impressive extra income generation of 3000-4000 per month (at Rs. 0.5 per flower) for the farmers. Here we have assumed that the farmers are able to sell all the flowers that they are producing. But this will require a successful marketing strategy for selling the produce of the farmers.
MARKETS AND MARKETING ANALYSIS Floriculture Markets: Domestic vs. Exports There are at present two market segments in Floriculture. One, of which is a traditional one and as old as our culture, prefers flowers that are cheap, scented, with very short shelf life and use them in worships, garlands, and as an ornament in hair. It is a huge and
growing market and is satisfied by local and regional production. The entire trade is unorganized. The other, mainly export segment, prefers the flowers of quality, with long stems, long shelf life and uses them mainly for decorative and gifts purposes. There is a significant cost and price difference between the two segments (Report of SAC-C 2001). Earlier, the two segments were separate. Now, there are signs of emergence of the second segment in urban areas. This is due to increasing demand of cut flowers in cities and towns. As a result of rising income level, aesthetic awareness, shifts towards western style of living etc. the demand for cut flowers in the domestic market is growing at a much faster rate than the export market (Malik 1998). They are mainly used for bouquets, gifts, and also for decorating sets, homes and work places. This demand of cut flowers like rose, gladiolus, tuberose, and carnation in the domestic markets is generally met by the commercial floriculture units set up around urban areas mainly for exports. Whenever there is a slump in exports, they dump their produce in these markets through the existing wholesale channels developed for traditional flowers. The demand is highly fluctuating and seasonal. The demand goes up in festive and marriage seasons but falls drastically in the monsoon season. The demand also rises on some mostly celebrated days like Valentine’s Day, Mother’s Day and so on. Peak demand is during Christmas to Valentines Day. The export oriented cultivation by the commercial floriculture units is a very specialized activity requiring specialized inputs, skills and technology and therefore is highly capital intensive. The commercial flower (business) cultivation can be likened to an industrial production process and therefore has generally been practiced by a handful of big or well off farmers or by a few resourceful entrepreneurs (Malik 1998). Flowers meant for export should be harvested at the bud stage itself. Once the flowers are harvested, they are placed in the cold storage. They are then graded and bundled on length and then packed in pre-cooled boxes. Government of India has identified horticulture as a thrust area for exports in the wake of recent emphasis on increasing exports from India. As part of this emphasis, the government sought to extend several incentives to the floriculture sector in order to promote new ventures (Malik 1998). More than 150 export-oriented units (EOUs) have been approved by the Government and are coming up in different parts of the country,
particularly around Pune, Chandigarh, Bangalore, Delhi and Hyderabad. Some of them have started in full production and have started exporting their products. A majority of these are being set up with the collaboration of foreign technology and infrastructural support. A modest estimate of investment made in this sector is around Rs.1, 500 crores so far, of which Rs.55 crores is in foreign investment (as up to June 1995). Some of the robust cut flowers like roses are also cultivated by small farmers in their farms. This cultivation is less input and capital intensive and usually done along with traditional flower cultivation. As compared to the produce of commercial floriculture units using technologies like greenhouse etc. they are of lower quality in terms of variety, texture, robustness, shelf life etc. This produce is sold in domestic markets and is not fit for exports. Most of the domestic market is a road side sale or sale through kiosks. No attention is paid to the grading or selling the flowers under controlled temperature conditions on the assumption that such processes offer little premium for quality. The higher quality of flowers from the commercial (export) units is generally not compensated in domestic markets at the cost of those from farms or wadis of small farmers. There is no major price difference in prices of both. Existing Markets and Marketing practices in the Study Area Wholesale Markets We found three major wholesale markets within our study area at Bharuch, Baroda, and Surat. These markets generally operate daily in the morning from 6.00 am to 12.00 noon. The major flowers in these markets are the traditional flowers like Roses (desi), Marigold, Lily etc. Some major cut flowers like English Roses, Gerbera etc. are also sold in these markets. Flower growers from adjoining areas come to these markets daily with their produce and sell them to the various wholesalers who further sell them to various retailers and agents. Prices are fixed in the open market. These markets are highly fluctuating and the daily prices directly depend on the supply on the particular day. Bharuch Market
Bharuch is about 65 km away from Netrang. It is situated at the banks of the river Narmada. A couple of beneficiaries of the Rose Wadi program sell their produce in the flower market at Bharuch. The major features of this market are as follows: 1. The single major flower traded here is the traditional Roses (desi) which accounts for almost 70% of the total trade. Other traditional flowers Marigold, Lily etc are also sold here. These flowers are sold in bulk prices are fixed per kilogram of the flower. 2. There are 35-40 wholesalers in the market all having an outlet on the road side. They buy the produce from the farmers coming from adjoining areas usually along the river Narmada. They (farmers) normally get Rs. 20-30 per kilogram of roses on the basis of prices prevailing (on a particular day). A kilogram of traditional roses contains about 250 flowers of average size. 3. The flowers are sold either directly to the consumers or to the agents and retailers (from their outlets). A major part of traditional roses are sent to Surat from here which is a bigger and assured market. At the Surat market, roses are usually sold at Rs. 30-40 per kilogram. But in lean seasons, the prices at Surat fall to Rs. 20 per kilogram. In retail, they are sold up to Rs. 50 per kilogram at Bharuch. The wholesalers gain Rs. 10-30 per kilogram. Margin for the wholesalers on other flowers like Marigold is usually Rs. 2-5 per kilogram. 4. A group of wholesalers/traders collectively hire a vehicle (usually a mid-size van) to Surat and distribute the costs equally among them. In a group of 7 traders, cost shared by each is Rs.100. Larger the quantity of flowers, lower is the cost of transport per kilogram, but then higher is the market risk. 5. Traditional roses are generally sold throughout the year. Demand is generally high between the months of October and April with occasional spurt during festivals and marriage seasons. 6. The market for English Roses is seasonal. It is not traded on a daily basis. In peak seasons, or in occasions of special orders, it is usually brought from Surat by the traders here. It is sold to the end consumers at Rs. 4-5 per flower. Surat Market Surat is largest daily wholesale market of both traditional and cut flowers in the state. It is about 100 kilometres from Netrang and ^& from Mumbai well connected with all the
modes of transport. The main characteristics of Surat market in terms of the existing marketing practices are as follows: 1. Around 70 to 80 percent of flowers traded in the Surat market are brought from outside the state predominantly from Maharashtra and Karnataka. A variety of cut flowers like rose, gladiolus, carnation, tuberose etc. are imported to Surat from places like Mumbai, Pune, Nasik, Sholapur, and Bangalore. 2. The prices in the market are highly fluctuating which makes the flower trade a high risk business. The risk is also increased due to the perishable nature of the product. But during peak seasons, traders make heavy profit in the business. 3. Monsoon season is usually a lean season for flowers. Production of flowers increases slightly but the demand falls in this season. Season improves in festive or marriage seasons and price of flowers increases. 4. Roses are again the primary flower traded in Surat market. Three different varieties traditional (desi), English, and Chinese are among the top varieties in demand. 40-50 wholesalers out of total 150 in the market are involved in trade of the English Roses. Average size of stock per trader varies from 500-2000 flowers. 5. The general price range of three main variety of roses in the peak and lean seasons in the Surat wholesale market are as follows:
Table 6: Comparison of Prices of three varieties of Roses at Surat market Flowers
Peak season (October to
Lean season (May to
Traditional Rose (desi) English Rose (hybrid
April) Rs. 30-50 per kilogram Rs. 10-25 per bundle (10
September) Rs. 20-30 per kilogram Rs. 5 per bundle (10
Tea-red) Chinese Rose (hybrid)
pieces)
pieces)
A grade
Rs. 30-45 per bundle (20
Rs. 30 per bundle (20
pieces)
pieces)
Rs. 10-20 per bundle (20
Rs. 10 per bundle (20
pieces)
pieces)
B grade
Source: Market Survey
6. The major buyers of flowers are prominent retailers, agents and occasional end consumers. Apart from Surat, the buyers come from nearby areas like Navsari, Kosamba, Bardoli, Kim, Bharuch etc. The wholesalers are producers and traders who come from Bharuch, Mumbai, Nasik, Sholapur, and Bangalore to sell their produce. Some commercial producers of flowers from nearby areas also sell their produce in the market. The margin to the traders on English Roses ranges from Rs. 2-20 per bundle (10 pieces). 7. The market risk is borne by the traders. Prices fall down to almost 50% next day if the stock of particular day is not sold on that day. 8. The English Roses bought by the retailers are sold at Rs. 2-3 per flower to the end consumers. This price remains almost same throughout the year but goes up on some days like Valentine’s Day, Mother’s day, Christmas etc. Baroda Market Another major wholesale market is at Baroda almost #@ km from Netrang. This is again a major market of both traditional and cut flowers. Flowers from the commercial floriculture units in the near by area are commonly sold here. Major buyers are retail agents, occasional end consumers and some institutional buyers like hotels, hospitals, corporate and government offices and some flower processing industries. This is a competitive market and prices fall drastically when there is a slump in the export market. Buyers come here from in and around Baroda to buy the flowers in bulk. Retail Markets
Gujarat has a vast domestic market for cut flowers. As a result of a shift towards western style of living and rising income levels, the demand for flowers in the domestic market is growing at a faster rate than the export market. Major cut flowers like roses are sold through the existing retail network for traditional flowers. There are some prominent retail outlets of cut flowers in cities like Ahmedabad, Baroda, Anand, Surat etc. The demand of cut flowers has also increased in small cities and towns. There are generally a few retail outlets even in small towns where English Roses are available, although in small quantities. A few beneficiaries of the Rose Wadi program sell their produce directly to retailers at Netrang and Rajpipala. Some major retail markets identified in the study area are as follows: 1. Rajpipala The retailer at Rajpipala is the only seller of English Rose in the whole city. Actually a Mali by profession, he mainly sells the traditional flowers cultivated in his own farm. Apart from selling the flowers directly, he does some value additions like making garlands, bouquets, decoration in marriage and other occasions. The demand of traditional flowers remains almost constant throughout the year. People buy traditional flowers chiefly for pooja, and decoration. On the other hand, the demand of English Roses fluctuates during the year. He sells 400-500 flowers in peak season (October to April). Rest of the year he sells only 100-200 flowers. Unlike the traditional roses, the English variety remains fresh for a longer period (3-7 days if stored properly in a cool place) and is more robust. It increases its aesthetic utility and therefore preferred for decorative purposes. English roses are generally sold at Rs. 2-5 per flower to the end consumers except on some festival days when it rises to Rs. 15-20 per flower. They are also used in making bouquets, garlands, decoration sets for marriage etc. The value of these flowers increases substantially after such value additions. The minimum price of a bouquet of ten flowers is around Rs. 50. In marriage seasons, a garland made from 300 English Rose flowers on order is sold at Rs. 1500.
Two beneficiaries sell their produce to the retailer at Rajpipala and get Rs. 1 per flower throughout the year. But during the lean seasons, the retailer refuses to buy all the flowers from them owing to low demand in the market. Every alternate day, they collect the flowers in the morning and reach Rajpipala through a city bus and give it to the retailer their. It costs them Rs. 30 to and fro. The maximum time taken in the process is 4 hours. 2. Netrang The study found one of the beneficiaries of the Rose Wadi project selling its produce at Netrang itself to a retailer (Mali). He gives him maximum Rs. 0.5 per flower. The retailer does some value additions and sells it further to the end consumers. But in lean seasons this retailer stops buying English roses from the farmer. 3. Others (Baroda, Anand, Ahmedabad and Surat) The study also identified and surveyed some prominent retail points of English Roses in Baroda, Anand, Ahmedabad and Surat. These retailers buy these flowers either from the nearest wholesale market or through agents. Generally commercial floriculture units have linkages with such prominent retail points where they supply their produce both on regular and order basis. It usually fetches them Rs. 12.5 per flower. There is always some demand at these points and it increases during peak seasons. The retailers further sell these flowers to the end consumers and some institutional buyers like hotels, hospitals, corporate and government offices. These institutional buyers are regular buyers of such flowers. The retailers also sell value added products like bouquets, garlands and other decoration packages which are always in demand. The price of these flowers is around Rs. 2- 5 per flower in retail and remains almost same throughout the year. However it increases sharply (up to Rs. 15-20 per flower) during peak days.
Marketing Channels
Marketing channels are the trade channels or the distribution path through which the produce is transported from the point of production till it reaches the ultimate consumer. The market is said to be efficient if the price spread i.e. difference between the price paid by consumer and price received by producer is minimum. Marketing of flowers is an important aspect, which involves movement of flowers from producer to ultimate consumers. In this flow, it moves via various agencies like commission agent, wholesalers and retailers (Tale et al 2003). The channels of marketing are an important aspect of agricultural marketing affecting the prices paid by consumers and shares of them received by the producer. The shorter the channel, lesser the market costs and cheaper the commodity to the consumer. When the channel is long with more intermediaries, prices are more but the producer’s share is less. The channel which provides commodities at cheaper price to consumer and also ensures greater share to producer is considered as the most efficient channel. (Source: www.indiaagronet.com) There are several channels of distribution depending upon type of produce or commodity. The various factors affecting the type of channels with respect to a commodity are perishability, bulkiness and weight, storage facilities, weak or strong marketing agency and the distance between the producer and consumer. These channels have great influence on marketing costs such as transport, commission charges, etc. and market margins received by the intermediaries such as trader, commission agent, wholesaler and retailer. The study came with different types of channels (depicted in fig) in the study area being used by the flower producers to sell their produce. Figure 2: Existing channels of flower marketing
FLOWER PRODUCERS
COMMISSION AGENTS COMMISSION AGENTS
RETAILERS
WHOLESALER/TRADER RETAILERS RETAILERS
ULTIMATE CONSUMERS
Farmers producing agricultural produce are scattered in remote villages while consumers are in semi-urban and urban areas. This produce has to reach consumers for its final use and consumption. There are different agencies and functionaries through which this produce passes and reaches the consumer. A channel of distribution of a product is the route taken by the ownership of goods as they move from the producer to the consumer or industrial user. The various existing channels of flower marketing in the study area are described as under: 1. Traditional flowers are generally sold by the small producers directly to the end consumers. Such farmers/producers cultivate those flowers which have a permanent domestic market throughout the year. These flowers are generally used in pooja, decoration and cosmetic purposes. The producers own a small retail shops in towns or highways near to their farms and they sell their own produce. They most often also do some value additions like garland making before selling these flowers. Desi roses, Marigold, Lilies etc. are generally sold in this manner. The demand of such flowers is generally high near religious places like temple,
mazar, or a church. The direct channel is also used in case of a large order or institutional buyers having a prior agreement with commercial producer of flowers. 2. Some producers sell their produce through linkages with some prominent retailers in the cities. Such retailers provide an assured market to them and such linkages often result in better returns to the producers. A couple of beneficiaries of the Rose Wadi project sell their produce to a retailer in Rajpipala through a similar type of agreement. Drawback of such a channel is that the producers get the same price throughout, irrespective of the price existing in the market. Most of the small scale floriculture producers in the study area operate through such channels. They develop such linkages with prominent retailers in near by cities and supply their produce to them both regularly and on-order basis. There are a number of such producers operating in cities of Baroda, Anand, Ahmedabad and Surat. 3. Large export oriented floriculturists most often sell their produce in the domestic markets through agents having links with various retailers in the area. Usually such produce consists of non-exportable grades of flowers or the excess flower production which somehow could not be profitably exported by them. This channel of distribution is prevalent in states like Maharashtra. Small scale producers operating through this channel are often exploited by the commission agents in the form of high commission charges, delayed payment and purchase of only quality flowers. 4. Most of the beneficiaries of the Rose Wadi project sell their produce through the wholesale market at Bharuch and Surat. They sell their produce to the wholesalers/traders who in turn sell them to retailers and final consumers. No commission agent is involved in the process. Travel and Packing costs are borne by the producers themselves and they get the price which is prevailing in the market. Sometimes the produce is moved from one wholesale market to another by the traders as the study found in Bharuch (a major part of the produce is moved daily from Bharuch to Surat). The marketing costs increase in the process and the share of the producer falls in the process.
5. Finally one more distribution channel was found to be used in marketing of the produce from other states like Maharashtra and Karnataka. The produce is brought to Surat wholesale market through the commission agents who buy them from the producers. This is sold to wholesalers in Surat who finally sell it to the retailers and end-consumers. Again the number of levels in the channel increases the cost of marketing. But this channel is fit for large scale production and marketing of flowers in far away areas. Demand Analysis Both the supply and the demand for flowers in India are highly seasonal. Flower prices fluctuate daily, price differentials exist between markets and with in markets over the year. The variation in prices between markets can be explained by supply (whether the local conditions permit flower production or if they must be transported from production centres far away) and the demand for flowers (Saha et al 2003). The demand for flowers has two components: a steady component and a seasonal component. The seasonal demand for particular traditional flowers for religion purposes and ceremonies often matches seasonal availability. The factors, which influence the demand, are to some extent different for traditional and modern flowers and for flowers used as inputs in industries. •
Traditional Flowers
The steady demand for traditional flowers comes from the use of flowers for religious purposes, personal adornment, and decoration of homes. This demand is particularly strong in the Southern states and West Bengal in India, as the use of flowers is part of the local culture. The seasonal demand comes from two sources: religion festivals and marriages. The demand is generally for specific flowers. •
Modern (Cut) Flowers
The demand for modern flowers also has two components, namely a steady component and a seasonal component. The bulk of the steady demand comes from institutions. The demand is concentrated in urban areas. Although income plays an important role in generating this demand, Westernisation is crucial. The demand for modern flowers from
the consumers (individuals) is likely to grow enormously as the occasions that call for flower giving will continue to present them. Although there is an increasing demand for modern flowers from individuals or households, institutions continue to be the dominant buyers in the market. The study shows that a major part (60-70 percent) of the demand of flowers in Gujarat is met by other states like Maharashtra and Karnataka. The floriculture industry in these states is comparatively much more old and matured. The marketing infrastructure and practices are also more developed there. There is a scope of development of floriculture in Gujarat to meet this unmet demand in the domestic market. Efforts need to be made to concurrently develop the home market along with the infrastructure to facilitate the marketing of the produce.
Table 6: Sources of steady and seasonal demand of flowers Demand of flowers Steady
Traditional Religious purposes
Modern (Cut flowers) Institutional buyers
Personal adornment Seasonal
Decoration of homes Festivals
Celebrated days
Marriages
Marriages
Source: Market Survey
Competition Analysis The Indian floriculture industry is growing at a rate if 10 percent per annum and also is the competition in the country. Still, the markets are big enough to consume the entire produce. Within the country there are many producers who are vying foe the increased market share. Many big corporate houses like MRF, Goenka have also jumped in to reap the rewards of the floriculture industry (Saha et al 2003). The study found that a major part of cut flowers in the markets of Surat and Baroda come from the export oriented commercial floriculture units around the area. Usually the
exporters are assured of domestic markets for the non-exportable grades of flowers or the excess flower production which somehow could not be profitably exported by them. The competition increases whenever there is a slump in the export markets. Produce from such units are better in quality than those from traditional farms. But at present the domestic markets are not that developed so as to provide a premium for better quality to them. The demand of flowers in the domestic market is growing at a much faster rate than the export market (Malik 1998). This makes the domestic markets a huge, growing and more assured market for the commercial producers. In future we will see more produce from such units coming to these markets. This would also mean more focus on development of such markets and the infrastructure. The produce from traditional farms as in the case of the Rose Wadi project has a comparative advantage of low cost production. This advantage can be exploited as long as the domestic market fails to provide a premium for better quality to the commercial producers. Apart from metropolitan cities, small cities and towns like Rajpipala can be targeted where there is little or no competition from others. With increase in western influence on life styles and rise in purchasing power of people, the demand of modern flowers has increased in small cities too. Issues/Problems in Marketing The cut-flowers’ marketing like other commercial crops is more critical than the production itself. This is mainly because of the fact that market decides the profitability and economic sustainability per se of the product and floriculture is no exception. Like scanty and scattered production, the cut-flowers’ marketing is also unorganized and under developed. The high price-spread on account of exorbitant margins, no specialized packaging due to lack of packing material, no open auction for sale, less number of floritraders in the market, few flori-markets and no existence of primary market in the producing area amply speak of the deplorable state of market/marketing system. (Source: www.agmarknet.nic.in)
The marketing of cut-flowers is a complex, sophisticated and more critical process than production. Absence of an organised market is a major constraint generally expressed by a large number of flower growers (Tale et al 2003). As regards marketing of the produce of the Rose Wadi program beneficiaries, unorganised marketing, transportation, nonavailability and non-accessibility of a permanent market were found to be some of the major problems faced by them. The study also reveals that price fluctuation is very common in flower markets and the change can be observed from one day to another. Though merchants keep the farmers informed, there is a lack of authenticity in the absence of a farm price policy. Being non-conventional and recently introduced crop, the standardized production technology of cut-flowers is not available to the farmers. Lack of cold storage facilities, standardized and scientifically tested spray schedule for the control of pests and diseases, and non availability of the quality inputs were pin-pointed major problems of the farmers in the production of cut-flowers. Basically, flower production is scattered and is a small-scale production, which create problems of marketing. In addition, the infrastructure facilities like roads, means of transport, storage facilities, etc. are scarce on our rural areas. The problems faced by the beneficiaries of the Rose Wadi program are the effect of all such causes.
MAJOR RESULTS AND FINDINGS
The study came out with some important findings listed as follows: 1. The outputs of the program are in close correspondence with the immediate needs of the marginal farmers and small farmers without a sustainable irrigation facility. 2. Most of those who have stopped cultivating the roses or rooted out the rose plants that have been provided to them by the Rose Wadi program belong to relatively well off (Medium & Large farmers) section of farmers. At the present scale, on which the Rose Wadi program was implemented, the centrality of income generated from flower cultivation is not higher for them compared to that from the conventional agriculture. 3. Beneficiaries have been selected in haste without proper dissemination of information about the project in the villages. Also because assured irrigation facility was the prime criteria in the beneficiary selection due to the nature of cultivation, some interested farmers lacking these facilities are left out in this program. 4. Women were completely left out in this program despite the fact that generally the wadi lands are managed by women in the households. This has actually acted against their interests because they are now deprived of the ownership and decision making rights on this land. 5. The program ideally should also have involved the tasks of market linkages and laying infrastructure for flower marketing. It should start with studying the demand system first (rather than the production system) and mounting a successful marketing strategy. For that marketing skills are required in the staff of the organisation. But both (the task accomplishment and the competence acquirement) seem to remain neglected in this program. 6. The economics of flower cultivation looks quite impressive with encouraging annual profits at the present scale of production. But the constraint is faced on part
of marketing. Therefore the production enhancement should follow and not precede a marketing system in place. 7. The produce from traditional farms as in the case of the Rose Wadi project has a comparative advantage of low cost production. This advantage can be exploited as long as the domestic market fails to provide a premium for better quality to the commercial producers. 8. Unorganised marketing, transportation, non-availability and non-accessibility of a permanent market were found to be among the most important problems faced by the beneficiaries of the Rose Wadi program.
SUGGESTIONS AND RECOMMENDATIONS
1. Suggestions regarding Marketing Marketing strategy prior to Production strategy: The first and foremost necessity of the program is to formulate a marketing strategy for marketing the produce of the farmer beneficiaries of the Rose Wadi program. The marketing strategy should be sustainable and implementable in the present conditions. Organized Marketing: Unorganised marketing was found to be one of the major issues faced by the beneficiaries. The production of flowers by the beneficiaries is at a small scale and scattered which creates problems of marketing. AKRSP (I) should help the beneficiaries to organise themselves and market their produce collectively. This will not only provide them the scalar advantages but also distribute the risk among them. The beneficiaries can think of forming a cooperative body for marketing their produce. They can appoint an operating system (either from outside or among themselves) to carry out the tasks of marketing. The operating system would be accountable to a governing body formed by the beneficiaries themselves. Through cooperative efforts, collective bargaining power is achieved which is higher than individual bargaining power. This helps in getting better returns to members in transactions with intermediaries and consumers. Also since risks are distributed over the members, there is a reduction in risk for an individual. The better access to market information also helps to reduce uncertainty and increase control over market. Also, there is always better scope for adoption of technologies that can create utilities in a cooperative effort. The values generated in the process compared to costs incurred by an individual in a collective are always greater.
Market linkage with prominent retail points: With the organised efforts, market linkages with prominent retail points in cities like Rajpipala, Bharuch, Baroda, Anand, Ahmedabad etc. can be made to ensure fair prices to the beneficiaries for their produce throughout the year. This direct linkage will eliminate the expenses of middlemen. Marketing Infrastructure: A proper marketing infrastructure including transport and storage of flowers could be built to add time and place utility to the produce. This will be economical and viable only if the beneficiaries are organised into a collective. Value Addition skills: Value addition skills like garland, bouquet making, packaging and decoration for marriages should be imparted to the interested beneficiaries. This will help in getting better prices for the flowers and also add to their occupational skills. Women in the household can be targeted in this capacity building. This will ensure participation of women in economic decision making and also add to their occupational skill building. This will also help in retaining their ownership and decision making rights over the wadi lands. Local Market development: Apart from the farmer beneficiaries the landless could also be targeted in skill building (like garland, bouquet making, packaging and decoration for marriages). This will not only provide a sustainable means for their livelihoods but also create a local demand for the produce of the beneficiaries. Linkages with Institutional buyers: One of the major issues identified in marketing of flowers was the seasonality of demand. We saw that there is a vast difference in market demand between peak and lean seasons. This can be dealt with building linkages with institutional buyers like hotels, hospitals, government and corporate offices to ensure steady demand even in lean seasons. This will minimise the risk of the beneficiaries in lean seasons.
2. Suggestions regarding Selection of beneficiaries More and more small & marginal farmers should be selected as beneficiaries of such programs as we saw that there is a close correspondence between their immediate needs and the outputs of the program. To add interested small farmers not having an assured irrigation facility, the program should be supplemented with providing irrigation benefits to needy farmers. AKRSP (I) can also think of providing subsidies for drip irrigation and sprinkler irrigation as a part of this program. Labour requirement by Landless: Medium and large farmers who are beneficiaries of this program perceive the marginal productivity of labour involved in flower cultivation as too high. The labour requirement can be met by the landless people either on daily wages basis or leasing out wadi lands of large farmers to them. 3. Suggestions regarding Production Low Cost Production: The study found that low cost production was the major competitive advantage with the beneficiaries of the Rose Wadi program over the commercial producers. This advantage can be exploited fully in the domestic market as long as the domestic market fails to provide a premium for better quality to the commercial producers. The cost of production can be reduced further without compromising on the quality, by using organic manure for cultivation which is regarded as a better feed for flower plants. Effort should be made for development of low cost technology for maximising yield at minimum cost. Intensive training of beneficiaries: Intensive training of beneficiaries of the program should be arranged by AKRSP (I) with a larger focus on marketing of the produce. Regular training programs and demonstration
visits could be arranged to other states and areas where such experiments have been successful. Also proper guidance regarding packing, handling and quality maintenance should be provided regularly by AKRSP (I).