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SUMMERY
Indian is one among top producers of agricultural commodities in the world. The number of
commodities and varieties produced has increased during the past 25 years. The existing capacity
is self reliant and capable of exporting surplus produce to South Asian and Middle East
countries. Due to initiatives taken by government of India to meet the food needs of growing
population, it is expected that the production will increase manifolds and consumption would be
lower than the production in next two decades. India will be having advantage of excess agro-
production and that is nullified by spoilage and poor harvest and processing system. Hence
Indian farmers need an orientation on pesticides use, Post-harvest management, packaging
systems and latest logistics technology for meeting the quality as per the standards of USDA and
HACCP.
The total market potential of agriculture imports of GCC countries is USD 28,975 millions, in
which India’s share is about 8 percent amounting to USD 2700 million(WTO,2009). India’s
exports to gulf dominated by fruits and vegetables in raw form as well as processed. European
Union, USA, and Gulf China are the major sourcing countries for agricultural and non-
agricultural products for countries. These 3 countries alone contribute more than 40 percent of
their imports. There is an enormous opportunity to export Indian fresh produce to Middle East
countries provided there is a compulsion for integration of suppliers to synchronize the logistic
movement with market demand. This paper will analyze the Indian production capacity, export
opportunities in gulf countries and also offer solutions to various problems in agricultural supply
chain management.
Authors:
India was the world’s second largest producer of fresh produce in the year 2006. It produced 43 million
tons of fruits and 88 million tons of vegetables. The National Horticulture Mission forecasts annual
production growth is at 8.8 percent for fruits and 10.9 percent for vegetables by the year 2015. The total
consumption of 90 million tons of fresh produce is supplied through 7300 wholesale assembly markets
and 27294 rural weekly markets. The consumption of fresh produce is expected to reach 140 million tons
by 2015. It indicates there is an enormous growth opportunities to fresh produce sector. India can become
a world market leader in horticultural produce through the vertical and horizontal integration of different
components of the supply chain.
Note: Scenario of economy growing at 8 percent annum Source: Kumar & Kumar (2007)
The increase in the demand of fruits and vegetables for domestic consumption is a challenge to the
country. It is difficult to allocate large areas of land for horticulture. Diversifying land away from cereals
to horticulture remains a constraint in spite of it being more profitable for farmers to produce horticulture
products than cereals. The National Horticulture Mission (NHM) aims to double the production of fruits
and vegetables by 2010. Tables 2 and 3 project the future production and supply of fruits and vegetables
in India for 2015-16. It is estimated that the production of fruits and vegetables would increase to 66.9
million tons and 131 million tons respectively by 2010 and doubled by 2015. By reducing Post-harvest
losses, the surplus margin of 20-25 percent of fruits and vegetables are moved from domestic market to
export markets. Thus it is required that efforts should be diverted to minimize and remove the supply
constrains and make the supply chain efficient in order to improve the horticultural growth rates.
Production (Million
Year Area (Million ha) Yield (tonnes/ha) tonnes)
Vegetables
1999-00 5.82 14.4 83.8
2010-11 6.49 20.2 131.1
2015-16 6.49 23.5 152.5
Fruits
1999-00 3.74 11.8 44.3
2010-11 4.43 15.1 66.9
2015-16 4.43 16.9 74.9
Table 2: Production forecast of vegetables and fruits
In spite of India’s wide range of soil and climatic conditions the horticulture sector is facing several
constraints. These constraints result in a cultivable waste of about 19-40 percent. Another issue in the
supply chain is the inefficient post-harvest management. The proper integration of post-harvest
technology into marketing supply-chain is crucial. The extent of losses of fruits and vegetables in India is
estimated at about USD. 238 million to USD 266million per annum (Surabhi Mittal), and the loss of
quantity ranges between 10 per cent and 80 per cent in the most perishable fruits and vegetables. The
other challenges before the fresh produce industry are rapid progress in production technology, changing
consumer preferences, entry of multi-national companies and finally, the survival of interest of illiterate
farmer who is unaware of consumer safety and quality standards. There is no coordinated effort made to
bring uniform food safety and quality regulations by the different ministries of government of India
Production Post-harvest losses Supply
Year (Million tons) (Percent of Production (Million tons)
Vegetables
1999-00 83.8 19 67.9
2010-11 131.1 19 106.2
2015-16 152.1 19 123.5
Fruits
1999-00 44.3 25 33.2
2010-11 66.9 25 50.2
2015-16 74.9 25 56.2
Item 2007-08
Fruits
Apple China, South Africa
Banana Oman, Singapore, Philippines
Lemon South Africa, Jordan, Iran
Spain, France, South Africa, Thailand,
Other Citrus Fruits/Mosambi
Netherlands
Oranges Bhutan
Grapes Australia, USA, South Africa, Syria, Chile
Mango and Guava Mexico, Brazil, Peru, Pakistan
Papaya Malaysia
Thailand, South Africa, Philippines, Malaysia,
Pineapple
Kenya
Vegetables
India’s trade with GCC countries is highly cooperative and existing from many centuries. Trading with
gulf is dominated by the crude oil and agri-products. India is regular importer of crude oil and exporting
varieties of agri-commodities like fresh fruits, vegetables, Animal Products and cereals. The balance of
trade recorded a negative balance in India’s account. The total trade balance is showing a negative
balance of USD 102,079 millions. Indian trade account with Oman is having a very negative balance of
USD 79026 millions. Hence there is need to nullify the negative trade with Oman and rest of the GCC
member countries. The GCC countries need more agricultural products as their countries Agricultural
production is very poor compare to the rest of the countries in the world.
As per trade statistics (2007-2008) published by the Ministry of commerce, Government of India, the
country has achieved a total trade of USD 13857 millions of exports in agricultural products across the
world. The total exports to GCC region is at USD 2700 million contributing 19 percent of total agri-
exports from India.
Indian
Agri-Products Worth of Exports
GCC country Total Imports Imports Percentage Agriculture imports worth Percent of total
UAE 132494 8.6 10599 1285 12.12
Bahrain 11488 5.6 643 32 4.98
Kuwait 21122 12.0 2534 293 11.56
Oman 16025 10.3 1650 54 3.27
Qatar 22005 5.5 1100 58 5.27
Saudi 90217 13.8 12449 978 7.86
TOTAL 293351 28975 2700 9.32
Table 6: Statistics showing the Agricultural products imported to GCC countries in 2007-08
Source: World Trade Organization (WTO) in April, 2009
Institutional Problems:
Poor infrastructure (in terms of storage, transport, cargo space, facilities at air/sea ports, vapour heat
treatment, etc.), insufficient institutional support (credit arrangement, promotion of Indian fruits &
vegetables overseas) and low research and development efforts (in terms of quality and productivity
comparable to those in other producing and exporting countries) are the major constraints to the export of
fresh fruits and vegetables. The institutional arrangements for (i) widening the production base for
exports, (ii) efficient post-harvest processing/handling and product promotion technology, (iii) supply of
raw materials at reasonable costs, (iv) provision of adequate and timely credit, (v) creation of strong
infrastructure, including uninterrupted power and water supplies, and efficient transportation system, and
the provision of technical support and conducive labour legislation are prerequisites for high export
performance and marketing.
7.0 CONCLUSION
Geographically, India’s export markets are rather limited. Major importers of Indian fresh fruits and
vegetables are the Middle East countries, with only small quantities of these commodities being imported
by the UK, Bangladesh and the former USSR. Similarly, the market for processed fruits is largely
confined to the former USSR and to some extent to Gulf countries. Barring a few exceptions, most of the
European and ASEAN markets do not figure in the list of importing markets of India’s horticultural
products. A larger number of export markets could provide sustained growth for India’s exports besides
yielding higher unit values. Hence efforts must be made to tap a large number of international markets in
the bid to expand and diversify India’s export markets. Since there is currently limited scope for
increasing the area under cultivation, it is essential to promote improved cultural and management
practices to increase productivity levels. Many existing orchards are in a state of neglect and need to be
rejuvenated through scientific methods and management.
India has a narrow product mix for the export market as the bulk of Indian exports consist of mango,
onions and mango pulp. Concerted efforts must be made to promote export of other commodities and
products and to expand the export product mix. Exporting a large number of diversified products rather
than relying on a few commodities will enhance export potential and hold on to the world market
throughout the year. Direct contact between producers and processing factories should be encouraged.
Such direct contacts between producers and processors can ensure better prices for producers.
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