Floribusiness Uas08

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Floribusiness Uas08

  1. 1. Floriculture business in the Nilgiris - an economic analysis T.M. Gajanana, M. Sudha, D. Sreenivasa Murthy and V. Dakshinamoorthy IIHR, Bangalore
  2. 2. Area and Production of flower crops 6,93,401 (27618) 126235 2005-06 3,65,685 (6121.523) 65,696 1997-98 2,32,536.32 (5122.75) 53,212 1993-94 5,09,193.60 (6806) 88,607 1999-00 3,33,758.79 (5368.4) 81,923 1995-96 1,48,603 (22) 30,909 1991-92 Production (t) (lakh No) Area (ha) Year
  3. 3. Major flower growing states These five states account for about 71% area under flowers in the country. 6.10 West Bengal 8.09 Maharashtra 11.51 Andhra Pradesh 22.53 Karnataka 29.18 Tamil Nadu % area under flowers State
  4. 4. Floriculture Business <ul><li>Non-traditional floriculture/Hi-tech floriculture </li></ul><ul><li>(Modern/Cut flowers): </li></ul><ul><li>The flowers are usually harvested with a long stem which are used for vase purposes, office arrangements, bouquets, hand posy and for gift purposes . </li></ul><ul><li>Modern/Cut flowers : </li></ul><ul><li>Gladioli </li></ul><ul><li>hi-tech Rose </li></ul><ul><li>Carnation </li></ul><ul><li>Gerbera </li></ul><ul><li>Orchids </li></ul><ul><li>Anthuriums </li></ul><ul><li>Lilium </li></ul>
  5. 5. Trend in Export of Floricultural products (Rs. Millions) * Compound Growth Rate; The total export value for the year 2005-06 is Rs. 2994 million. 29.47 1535 882.43 308.37 144.54 Total 11.93 25 29.81 11.83 12.06 Bulbs, Tubers etc 9.45 - 48.38 10.35 23.99 Dried plants -12.17 15 33.73 60.43 40.15 Live plants 33.55 940 581.10 195.78 64.35 Dried flowers 64.03 557 189.41 29.98 3.99 Cut flowers CGR* (%) 2001-02 1997-98 1994-95 1991-92 Particulars
  6. 6. Export of Floriculture products 1996-97 2001-02 1991-92
  7. 7. Floriculture business in the Nilgiris, TN <ul><li>Genesis </li></ul><ul><li>Established comparative and competitive advantage for Tea </li></ul><ul><li>Agro climatic potential for a variety of flower crops– untapped </li></ul><ul><li>Changing global order demands crop diversification? </li></ul><ul><li>Objectives </li></ul><ul><li>To examine the present production and marketing opportunities for floricultural crops in Nilgiris district and </li></ul><ul><li>To estimate the market potential and there of the marketing strategies for boosting floriculture business in the district. </li></ul>
  8. 8. Focus Area and crops <ul><li>Focus area </li></ul><ul><li>Udhagai (42%) Coonoor (19.87%) and Gudalur (32.9%) – production centres </li></ul><ul><li>Bangalore and Coimbatore – Destination centres </li></ul><ul><li>Focus crops </li></ul><ul><li>Carnation (28.98%), bird of paradise (22.3%), anthurium (15.55%), lilium (11.88%), rose (10.8%), alstroemeria (5.19%) and gerbera (2.48%) </li></ul>
  9. 9. Methodology <ul><li>Survey and Rapid Appraisal </li></ul><ul><li>Detailed costs, returns and profit analysis of selected crops </li></ul><ul><li>Market survey and analysis </li></ul><ul><li>Estimation of demand and supply </li></ul><ul><li>Market potential estimation </li></ul>
  10. 10. Study area <ul><li>HADP, Nilgiris </li></ul>
  11. 11. Analytical Tools- Market Supply estimation <ul><li>Market supply or production of cut flowers </li></ul><ul><li>Sj = Qj x Aj </li></ul><ul><li>Where </li></ul><ul><li>Sj = Total production of jth cut flower crop per annum in lakh numbers </li></ul><ul><li>Qj = Yield per hectare of jth cut flower </li></ul><ul><li>in lakh numbers </li></ul><ul><li>Aj = Area under jth flower crop in hectares </li></ul>
  12. 12. Market demand estimation <ul><li>Dj = {∑Qij(WS) } + Qj(RL) </li></ul><ul><li>i = 1 to n markets </li></ul><ul><li>Where </li></ul><ul><li>Dj = Demand for jth cut flower crop per </li></ul><ul><li>annum in lakh numbers </li></ul><ul><li>Qij (WS)= Quantity demanded of jth flower </li></ul><ul><li>crop per annum by the wholesalers in the </li></ul><ul><li>ith market in lakh numbers </li></ul><ul><li>Qj(RL) = Quantity demanded of jth flower crop per </li></ul><ul><li>annum by the retailers in the local market </li></ul><ul><li>in lakh numbers </li></ul>
  13. 13. Comparative Economics of Flowers grown in Ooty (Rs/500 m 2 ) 0.10 -0.42 1.68 0.23 1.43 NR 1.05 - 1.37 1.07 2.09 BCR 1.90 1.90 17.10 3.28 2.73 Price (Rs/stem) 1.80 2.32 15.42 3.05 1.30 Cost of Production (Rs/stem) 52500 52500 80000 48960 144000 Yield (No) 5154 -22162 454586 11083 205468 NR 99750 99750 1688000 160560 393120 GR 94586 121912 1233414 149477 187652 Costs Rose (With subsidy) Rose (without subsidy) Lilium Gerbera Carnation Items
  14. 14. Margin of wholesaler in cut flower trade 5.00(50%) 15.00 - 10.00 Star Hotels Bird of paradise 1.00(25%) 4.00 3.00 Bangalore Gerbera 1.00(33.3%) 4.00 0.39 3.00 Kolkata 0.40(16%) 3.00 0.10 2.50 Coimbatore 0.36(12%) 3.50 0.14 3.00 Bangalore 2.00(67%) 5.00 - 3.00 Star Hotels Carnation wholesaler’s margin Selling price Marketing cost Purchase price Flower
  15. 15. Margin of retailer in cut flower sale at Ooty 1.84(46%) 6.00 0.16 4.00 Gladioli 1.84(46%) 6.00 0.16 4.00 Rose 1.00(67%) 2.50 - 1.50 Alstroemeria 2.00(67%) 5.00 - 3.00 Carnation Retailer’s margin Selling price Marketing cost Purchase price Flower
  16. 16. Margin of retailer in cut flower sale in Coimbatore 500 (100%) 1000.00 - 500.00 Arrangement 150(100%) 300.00 - 150.00 Bouquet 75(60%) 200.00 - 125.00 Bouquet 25.00(50%) 75.00 - 50.00 Bouquets 0.40(40%) 1.50 0.10 1.00 Alstroemeria 0.84(28%) 4.00 0.16 3.00 Carnation Retailer’s margin Selling price Marketing cost Purchase price Flower
  17. 17. Estimated Supply and Demand for flowers (Lakh stems) 0.62 (27%) 2.94 2.32 Bird of Paradise 0.25 (4%) 5.85 5.60 Anthurium 3.65 (10%) 39.65 36.00 Alstromeria - * 31.25 Rose 0.81 (1.63%) 50.31 49.50 Lilium 11.92 (118%) 21.98 10.06 Gerbera 36.86 (18%) 238.01 201.15 Carnation Excess Demand Demand Annual supply Cut flower
  18. 18. Export of cut flowers from India Japan, (72) Netherlands(5), UK(2), USA(3), Australia(2), UAE(3), Switzerland(1), Italy(1),France(1) 7413.07 2005-06 6 Japan (40), Netherlands (19),UAE(5), Australia(5), Singapore (4), Italy(4) 3611.90 2004-05 5 Japan(49),Netherlands(7), France(7), Germany(4), Australia(3) 4323.38 2002-03 4 Japan(23), Netherlands(19), Switzerland(8), Italy(8), USA(6),Singapore(5), UAE(5) 3909.68 2000-01 3 Japan(33), Netherlands(19), Singapore(6), Australia(6), USA(6), UK(6), UAE(4), Switzerland(3) 2511.66 1998-99 3 Japan(39), Netherlands(28), UK(8), USA(8), Germany(7), Singapore(3) 1808.15 1996-97 1 Major importing countries Value (Rs.lakh) Year Sl.No.
  19. 19. Recent developments in marketing of cut flowers <ul><li>Contract price – carnation, gerbera, lilium, rose, alstromeria </li></ul><ul><li>Infrastructure park – cold storage, packing etc. </li></ul><ul><li>Value addition – bouquets, pot arrangements, office arrangements, </li></ul><ul><li>E-marketing – dew drops - online marketing </li></ul><ul><li>IFAB – Online marketing of flowers </li></ul><ul><li>AEZ – Coorg in Karnataka for Anthuriums, Ooty in TN for carnation, gerbera, Uttaranchal for Gladiolus </li></ul>
  20. 20. Constraints in production and marketing of cut flowers in Nilgiris <ul><li>Quality planting material – bulbs to be imported. </li></ul><ul><li>Flower cultivation is capital intensive – lack of technical knowledge </li></ul><ul><li>Problems of pests and diseases - botrytis </li></ul><ul><li>Local markets absorb small quantity – dependence on intermediaries for external demand </li></ul><ul><li>Credit sales of flowers – payment default </li></ul><ul><li>Absence of specialized packing and transport –wastage of flowers </li></ul><ul><li>Export of Ooty flowers is not yet a reality </li></ul>
  21. 21. Existing Institutional support for cut flowers in Nilgiris <ul><li>Department of Horticulture, Government of Tamil Nadu </li></ul><ul><li>Hill Area Development Programme (HADP) and Central Sector Schemes through Tamil Nadu Agricultural University, Ooty </li></ul><ul><li>UPASI Krishi Vigyana Kendra </li></ul><ul><li>Nilgiris Integrated Flori-tech Company Ltd. (NIFCO) - SHG, women </li></ul>
  22. 22. Future strategy <ul><li>Identifying regional specialization pockets </li></ul><ul><li>Expansion of area under floricultural crops </li></ul><ul><li>Supply of quality planting materials by opening up of public/private plant material multiplication centre at Ooty itself </li></ul><ul><li>Training growers on production technology and drying of flowers </li></ul><ul><li>Exploring the possibilities of opening up an auction centre for cut flowers in Ooty </li></ul>
  23. 23. Developing working models that integrate production with marketing <ul><li>Model 1: Integrating production with marketing </li></ul><ul><li>Model II : Integrated production with marketing and value addition-Establishing a model ‘Flower boutique’ </li></ul><ul><li>Establishing Floriculture Infrastructure Parks (FIP) </li></ul><ul><li>Setting up of e-commerce in cut flower trade </li></ul>
  24. 24. Polyhouse grown flowers
  25. 25. Flower packing and arrangements
  26. 26. ACKNOWLEDGEMENTS <ul><li>Sri. S.J. Chiru, IAS, Project Director, HADP, Udhagai </li></ul><ul><li>Dr S. D. Shikhamany, Director, IIHR, Bangalore </li></ul><ul><li>Mr. Shivan, NIFCO Flowers </li></ul><ul><li>Chairman, CPC, IIHR, Bangalore </li></ul><ul><li>Department of Horticulture, Udhagamandalam and Gudalur </li></ul><ul><li>Producers of cut flowers, Nilgiris district </li></ul><ul><li>Flower Traders in Ooty, Bangalore and Coimbatore </li></ul>
  27. 27. <ul><li>Thank You </li></ul>

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