Baking

The agriculture sector has been allocated 1.534 Trillion Shillings for the financial year 2021/2022. This is an increase more than half from the 940 Billion the sector got in the current budget.  About a third of the budget which is 536 Billion Shillings will be spent at the Ministry for administrative purposes, according to the 2021/2022 National Budget Framework Paper. The government hopes that this will help drive production and productivity in the sector.  This is also 3.3% of the total national budget, still far below the 10% that Uganda and other African countries committed under the Maputo Declaration in 2003 in Mozambique.  Apart from putting in place new laws, policies and regulations in place, the government will push for the review and amendment of various laws including the Animal Breeding Act, The National Dairy and Beef Cattle breeding strategy, The National Small Ruminant Breeding Strategy, The National Artificial Insemination Strategy, and the National Pig Breeding Strategy, as well as developing livestock product and breeding stock distribution guidelines.  Under the Agri-led Interventions, the government intends to spend 200 Billion Shillings to increase production and productivity, increase agro-processing, increase market access and competitiveness of products as well as strengthen coordination among the different departments. The plan targets improvement in the production of selected agricultural products like maize, from 5 million metric tons to 5.5 tons, increasing cassava output from 4.1 million tons to 5.45 million tons and doubling production of beans to 1.44 million tons.  Others include bananas, rice, tea, coffee, cotton, milk, fish and beef.  The strategy involves the construction of processing facilities to improve post-harvest handling and storage, which will in turn help realized the better quality of products.   It also provides for increasing market access and competitiveness of agricultural products on the domestic and export markets.  The government plans to continue with agricultural mechanization programs that will see 30 fully equipped tractors purchased and distributed. The implementation of the irrigation program is also expected to continue involving the provision of 20 micro and small scale water irrigation systems for smallholder farmers as demonstration projects.  The program will be jointly managed through the Ministry of Water and Environment and will cost a total of 212 Billion Shillings. Mechanization will also involve the establishment of two Regional Farm Service Centres.    Government has outlined several inputs for livestock, poultry and crops. Planting materials to be provided include Beans, maize, sorghum, cassava, Irish potatoes and banana suckers.  Also to be provided are what the government has called strategic planting materials, that include tea, mango, citrus, cashew nuts, cocoa and apple seedlings, as well as pineapple suckers.  For poultry farmers, distribution of local and exotic chicks will continue as well as breeds of animals for livestock farmers. The strategy also provided for the distribution of animal feed.  Farming households will also be supported by dairy farming equipment and ICT infrastructure for heard management.  The government also intends to start rehabilitation and equipping of Milk Collection Centers around the country, as well as the construction of new ones in Mbale and Gulu, on top of helping dairy farmers acquire milk cooling plans.  Agriculture is our wisest pursuit, because it will in the end contribute most to real wealth, good morals & happiness The Diary Development Authority has been offered 62 Billion for the development of the dairy sector, which will include training of staff and farmers. There are also incentives set aside for the acquisition of refrigerated trucks and warehouses at border points and landing sites, as well as trucks and tricycles to farmer groups.  A total of 293,500 farmers from 57 districts around the country are set to be provided with subsidized agriculture inputs. The country has an estimated 30 million people involved in farming. On Agriculture extension, the government intends to recruit 170 ‘specialized value chain-focused extension workers’.  The Independent About Taj Agro Products: The Core idea of establishment of Taj Agro has been to connect our rural Indian farmers in our supply chain reducing the exploitation of middle men in the food industry. For more info write to us at E-mail I’d: info@tajagro.com Toll Free No: 1800-222-825

India should leverage its strengths in horticulture for exports through sustained efforts at value addition & market diversification, establishing farm-to-fork traceability and enabling a robust market intelligence framework. Despite ranking second globally in fruits and vegetables production, India’s share in global exports amounts to a meagre 1.7% in vegetables and 0.5% in fruits.Fruits & vegetables are important commodities not only because they are high in value & have a great overseas demand but also because they use less water and are crucial for sustainable farming.To boost exports, India needs to tackle issues of consistency in quality, low value addition, stiff international competition, payment issues, poor market intelligence and lately, supply chain disruptions due to COVID-19.These can be overcome by establishing farm-to-fork traceability, securing GI tags, creating linkages between farmers & exporters and harmonization of food safety standards. In 2018, the Word Trade Organization ranked India as the world’s 8th largest exporter of agricultural commodities. Of the total exports of agricultural products by India, around 35% is constituted by horticultural goods. This is intriguing because India ranks second in fruits and vegetables production in the world, after China. Its horticultural production in 2019-20 was estimated to be around 320.48 million tonne according to the Department of Agriculture, Cooperation and Farmers Welfare. Fruits production is estimated to be 99.07 MT (against 97.97 MT in 2018-19); while vegetable production is estimated to be around 191.77 MT in 2019-20 (compared to 183.17 MT in 2018-19). Albeit India produces higher volumes of fruits & vegetables over cereals, it is the latter which are exported primarily by India. Another astonishing fact is that India exports fruits and vegetables to over 70 nations across the world, with agriculture’s  contribution to GDP being 30.4%. Bangladesh, UAE, Netherland, Nepal, Malaysia, UK, Sri Lanka, Oman and Qatar are the top destinations for Indian fruit and vegetable exporters. Paradoxically though, India’s share in global exports amount to a meagre 1.7% in vegetables and 0.5% in fruits as per a 2017 World Bank report. Source: WTO (All figures in US$ billion) Jigsaw puzzle: Identifying the stumbling blocks in Indian horticulture Indian horticultural exporters face a number of challenges while tapping overseas markets. One of the key hurdles is the mismatch with quality standards set by international markets like the United States and European Union. For example, in May 2014, EU blocked imports of Indian mangoes until December 2015 after inspectors found some consignments of the fruit to be infested with fire flies. Sustained engagements in such matters are needed to match specific products with market expectations. For instance, Australia has granted market access for Indian pomegranates recently, and approved an additional facility for the exports of Indian mangoes. It is evident that India has not yet fully explored its export potential for fruits and vegetables. While the country currently exports fruits worth US$ 784.7 million, it has an untapped export potential worth US$ 1.3 billion, according to the ITC Trade Map. UK, Netherlands, Germany & US are offering the highest untapped export potential for fruits. The same holds true for vegetables, where India has an estimated untapped export potential worth US$ 1.1 billion. US, UAE, Vietnam, Malaysia and Sri Lanka offer the most untapped export potential for vegetables. Source: APEDA (All figures in US$ billion.) Top 5 markets with greatest potential for India’s vegetable exports MarketTop products with untapped potentialUSAOnions & shallots (US$ 38 mn); Tomatoes (US$ 2.7 mn); Peppers (US$ 2.6 mn); Garlic (US$ 1.2 mn); Sweet corn (US$ 845 k)VietnamOnions & shallots (US$ 59.9 mn); Potatoes (US$ 11.5 mn); Mushrooms (US$ 1.7 mn); Cabbages (US$ 160.5 k); Peppers (US$ 149.8 k)UAEOnions & shallots (US$ 27.6 mn); Potatoes (US$ 9.2 mn); Garlic (US$ 961.1 k) & Cabbages (US$ 185.6 k)MalaysiaOnions & shallots (US$ 32 mn); Capsicum (US$ 60.6 mn); Dried mushrooms (US$ 561.7 k); Cabbages (US$ 459.7 k)Sri LankaOnions & shallots (US$ 56.1 mn); Capsicum (US$ 57.2 mn); Potatoes (US$ 9 mn); Dried mushrooms (US$ 4.3 k); Sweetcorn (US$ 3.5 k) Source: ITC Trade Map Top 5 markets with greatest potential for India’s fruit exports MarketTop products with untapped potentialUKGrapes (US$ 46.1 mn); Guavas, mangoes & mangosteens (US$ 19.8 mn); Bananas (US$ 17.3 mn); Coconuts (US$ 1.5 mn); Peaches, pears, papayas, etc, (US$ 1.9 mn)NetherlandsGuavas, mangoes & mangosteens (US$ 36 mn); Bananas (US$ 6.3 mn); Grapes (US$ 4.2 mn); Watermelons (US$ 1.5 mn); Oranges (US$ 1.6 mn)USAGrapes (US$ 74 mn); Guavas, mangoes & mangosteens (US$ 13.8 mn); Coconuts (US$ 8.5 mn); Bananas (US$ 6.5 mn); Peaches, pears, papayas, etc. (US$ 5.1 mn)GermanyGrapes (US$ 17.1 mn); Guavas, mangoes & mangosteens (US$ 33.9 mn); Bananas (US$ 10.4 mn); Grapes (US$ 5.9 mn); Peaches, pears, papayas, etc. (US$ 4.6 mn)ThailandGrapes (US$ 32.6 mn); Guavas, mangoes & mangosteens (US$ 3.7 mn); Apples (US$ 976.2 k); Melons (US$ 884.0 k); Grapes (US$ 178.8 k) Source: ITC Trade Map Moreover, there’s little value addition being done to these fruits and vegetables. It is estimated that currently, share of high value and value-added agri produce in India’s agri-export basket is less than 15%, as compared to 25% for US and 49% for China. This is attributed to factors like weak processing infrastructure, lack of farm-to-fork traceability of products, relatively unskilled labour force and lack of last mile connectivity along the food production & distribution chain. These challenges go on to accentuate the costs borne by exporters according to the World Bank (2017). It states that it costs US$ 790 to transport 1 metric tonne of grapes from India to Netherlands. This is about three times higher than the cost in transporting the same from Chile – which is twice as far from the Netherlands as compared to India! Another problem that exporters face pertains to receiving payments for their consignments. Mrs.Priyanka Singh, Director, Taj Agro explains, “Most of the companies in Europe do trade in Letter of Credit (LC) and bank guarantee. This creates an issue for small agro companies based in India in terms of pricing, assured payment and creation of an active banking channel.” In addition, Indian exporters face stiff competition in international markets. ICRIER notes that globally there is a growing preference for coloured varieties of table grapes. In markets like the EU, India is competing with countries such as South Africa and Chile, whose grapes have a longer shelf life and hence better price realisation. This is likely to adversely affect the prices and quantity of export by India in the future. Further, COVID-19, too played the Shakespearean villain for the sector. As ICRIER’s Dr. Arpita Mukherjee notes: India went into a sudden lockdown due to which the perishable export supply chain was disrupted, leading to wastages. Air freight globally went through significant disruption and that adversely affected horticulture exports. While government across countries have tried to minimise the disruptions in food supply chains, some have started implementing more rigid food safety measures. Finding the missing pieces In order to boost India’s horticulture, market intelligence is key, on what kind of products are being demanded in overseas markets, which India can potentially fulfil. For example, the popularity of seedless grapes is growing in Europe. In this regard, Dr. Tarujyoti Buragohain, Associate Fellow, NCAER opines, “It is imperative to establish direct farmer-exporter linkages to produce world class good quality products.” Speaking of quality, establishing farm-to-fork traceability would do good to Indian horticultural exporters as it will establish credibility & trust in the production process. It is also essential to educate fruit and vegetable cultivators about the need to prevent pesticide overuse and adherence to food standard parameters set by various nations. India should at the same time make a case for harmonisation of global food safety standards to minimize rejections of its consignments abroad. Acquiring and promoting GI tags will also bode well for Indian horticulture exporters. Establishing effective agricultural brands can help farmers gain a competitive advantage in ‘buyer-driven’ global markets, as branded commodities usually fetch better price and can lead to brand loyalty. The country’s embassies abroad can act as a catalyst in guiding and promoting such products through food festivals, displays at busy airports and trade fairs. Hybrid Brinjal grown at Taj Agro Farms While the government has taken up favourable initiatives like 100% FDI in food processing sector & establishing 37 mega food parks and 297 integrated cold chains to fill the gaps across the value chain, it needs to explore relevant WTO-compliant subsidies for Indian horticulture exporters to attract them towards this sector. Lastly, horticulture 4.0 must aim at establishing farm factors. This entails not just establishing climate change resilient agriculture, but also having smart workers and smart farming, which addresses challenges like paucity of land and water. This requires bringing the fruits of technology to the marginal farmers through interventions like hydroponics (growing crops without soil using mineral nutrient solutions in an aqueous solvent) and vertical farms. Source: Trade Promotion Council of India

Corporates should come forward to work directly with farmers by Trade Promotion Council of India {Priyanka Singh} Priyanka Singh, Director, Taj Agro, opines that corporates should lease out their land and provide better competitive rates to farmers for their products. They should also impart training to horticulturists related to modern technology techniques being employed in horticulture. This would also improve the living standards of farmers to a great extent. BT: 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? Priyanka Singh: India’s horticulture exports have seen phenomenal growth in last few decades due to many positive factors: Our farmers have increased the use of hybrid seeds, plants, saplings, advance sustainable harvesting techniques etc. from research institutes like PUSA; which have high yields as compared to traditional methods of farming. Farmers have now gradually started shifting from traditional farming to horticulture crops such as guavas, bananas, mangoes, dragon fruits etc. This leads to avoid price barriers and oversupply in the market; whilst still keeping demand for the traditional crops and sustainable prices to avoid losses.India’s farmers have now started using new technology for organic manure production, vermicompost, yearly crop diversification, soil testing, green house production of fruits and vegetables, consulting agri scientists via Centre for Agriculture and Rural Development (CARD), drip water irrigation, solar water pumps etc. This is constantly helping them to produce high value nutritional horticulture products as per global standards and that is why India’s products have niche presence in the international markets.Indian farmers are opting for modern methods of cold storage for high value fruits and farm produce, better transportation, standard packaging in order to meet up export standards. Further, farmers are adapting to ISO 22000 standards along with the standard set by Agricultural and Processed Food Products Export Development Authority (APEDA). According to the latest market research and GDP stats, India is becoming one of the major international destinations for quality food procurement and also becoming world’s largest producer of several high value horticulture products and crops like spices, cashew, cashew nut shell liquid, Kashmiri saffron, fruit-vegetable seeds, fresh fruits, vegetable oil, fresh vegetables, processed vegetables, processed fruits and juices, floriculture products, tea, coffee, Ayush/medicinal and herbal products, cocoa, bonsai trees of mango, lychee, Tofu Cheese (Soya) and exotic fruits. 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? Priyanka Singh: India is a leading exporter of high value nutritional horticulture products to major MENA destinations like UAE, Saudi Arabia, Egypt, Iran, Iraq, Israel, Jordan, Kuwait etc. Along with it, we can explore European nations like U.K, Germany, France, Sweden, and Russian federation in future. Major challenges for expansion are as follows: India needs to form better bilateral trade with major European countries and Russian trade federation.Transportation cost may be on higher end, which may create issues for large volume exports.Better facility of inter-transit cold chain storage at shipyards and airports; more promptness at airport and cargo clearance are needed.Many exotic fruits are cultivated in India’s north east region but due to logistics and low-price margin, farmers are unable to present it globally. Inland rail connectivity may improve logistics in more farming-based zones in India.Pricing, assured payment and active banking channel needs to be formed, which is till date problem for small agro company exporters as most of companies in Europe don’t trade in Letter of Credit (LC) and bank guarantee. IBT: What are the major changes in global trade of horticulture post-COVID? Priyanka Singh: Due to Covid-19, global trade is at an all-time low and the consequent declines in trade and output is a painful consequence for all major business sectors. But restrictions on movement and social distancing, demand and supply chain disruption to slow down the spread of the disease meant that labour supply, transport, food delivery, and travel were directly affected. Whole sectors of global economies have been shut down, including horticulture trade activity. IBT: What are the opportunities for value addition, and what are the constraints exporters face in this regard? Priyanka Singh: We have immense potential in horticulture products exports which are relatively lesser known in the international markets like medicinal herbs, essential oils and other high value Ayurvedic offerings from India. There are a lot of next generation entrepreneurs coming in India in agri based segment, those who have high education and they all use modern technology and internet to promote their business, which is bringing positive feedback and better growth opportunities in the export markets. Along with this, new age entrepreneurs are educating horticulturists regarding latest market trends, modern sustainable cultivation method, online product promotion, new irrigation techniques, use of mobile based application for information forwarding etc. Taj Agro Farm India Further; more corporates should come forward in order to work directly with farmers (those are into horticulture) by leasing their land and providing better competitive rates for their products. The corporates could also impart training to horticulturists related to modern technology techniques being employed in horticulture. This would also improve the living standards of farmers to a great extent. The following constraints are felt by exporters: No one window approval solution for exporters and various licensing authorities.Presence of middle man brings additional cost disadvantage for end consumers.Less cultivation of high value products in horticulture segment despite of having age old tradition of growing medical herbs, Ayurvedic flowers, and exotic honey etc.Not enough corporate funding and direct purchase from horticulturists of India, especially mango, lychee, guava, banana etc.; which is grown seasonally mostly.Not enough buyers in horticulture products due to less awareness and advertisement.Timely transportation is big issue and due to this lots of fruits and vegetables gets wasted every year.More subsidy is required for dedicated horticulture growing farms to boost high value nutritional products. 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? Priyanka Singh: India is world’s second largest exporter of rice along with cereals like wheat, sorghum, maize, millets etc. since long time as compared to fruits & vegetables, (floriculture and seeds) as our farmers are still into traditional methods of farming, where they give more preference on growing cereals due to lack of knowledge and awareness. Hybrid seeds and saplings of fruits and vegetables are more costly as compared to cereals in India.More subsidy is available for cereal growers / farmers as compared to horticulturists in India.Exports are less mainly due to high cost harvest losses in the food industryThere are higher export criteria of sampling and analysis for the presence of pesticides, heavy metals in vegetables and fruits, where Indian farmers are relatively still behind as compared to other nations.Horticulturist needs to work upon more cost-effective cultivation in India to reach more customers globally.needs to reduce various tax slabs for exporters to encourage fruit and vegetable growers; specially some subsidy is required for Air cargo as cereals are mostly shipped through Sea which is more cost effective.Indian horticulture export could be encouraged more by:-Following International packaging standardsOne window solution for various export related approvals like APEDA registration, (The Agricultural and Processed Food Products Export Development Authority), Importer -Exporter Code (IEC), Phytosanitary Certificate, Halal, The Export Inspection Council (EIC) stock approval, and organic certifications etc.Horticulturists need to work upon collaborations with MNCs directly for gaining business insights of importing countries’ certifications, rules and regulations by organizing teleconferencing, webinar, etc. for mutual business development.Agro based companies which are working closely with farmers, floriculturists, and horticulturists are required to follow SOPs for farm growers, prompt and hygienic transportation, rapid sample lab test, fully automated and organic based farms, and dedicated staff team to handle rapid rejections and complaints of importers as fruits and vegetables are perishable goods as comparatively to cereals which has higher shelf life.Horticulturists in India need more support from FMCG Companies to promote and export premium quality fruits and vegetables like Kiwis, Guava, watermelon, Mango, Banana, mushroom, Celery, Bok Choy, Asparagus, hybrid brinjal and Lettuce etc.Another thing that we must do is increase the level and efficiency of food processing in the agro industry sector. Processed foods are exported in huge quantities across countries and demand is increasing a lot these days. So, focus should be to minimize losses by increasing cold storage efficient transport system etc. and also to focus on our existing food processing infrastructure in the country. IBT: Which are the top exporters in the world and what can we learn from other countries to boost its horticultural exports? Priyanka Singh: Top exporting countries in the world are United states of India, Australia, Netherlands, Russia, Israel, Brazil, Denmark etc. Indian farmers can learn a lot from countries like Israel, Netherlands, USA etc. to boost their crop yield: Systematic management of plant nutritional value is necessary because if a horticulturist does same crop cultivation for many years, the nutrients can be replenished by dead and decaying organic matter; therefore, annual crop rotation, and using organic manure can be proven beneficial for farmers.Growing mix crop could also bring maximum yield in same land.As Indian horticulture should also opt for modern technologies like drip irrigation, water recycling, opting for drone camera for crop and pest management, creating own biofertilizers, manures, self-operated robotic machines for crop harvesting, and most important affordable electronic security sensors could be installed in farm fields for crop protection from Blue bull. Priyanka Singh is Director at Taj Agro an export-oriented food processing company based in Mumbai, manufacturing & marketing all types of egg powders, protein powder, bulk frozen and IQF fruits and vegetables. The core idea of establishment of Taj Agro has been to connect rural Indian farmers in the supply chain and reduce the exploitation of middle men in the food industry. Also, its existing set of pharma and healthcare customers wanted to procure food products like Basmati Rice, protein powder, egg powder and other such daily commodities, under a trusted brand name with guaranteed quality. The company has earned the reputation of a distinguished exporter and supplier by offering a healthy and hygienic range of agricultural products at highly affordable prices.