Floriculture business in Floriculture business in the Nilgiris - an economic the Nilgiris - an economic

analysisanalysis

T.M. Gajanana, M. Sudha, D. T.M. Gajanana, M. Sudha, D. Sreenivasa Murthy and V. Sreenivasa Murthy and V.

DakshinamoorthyDakshinamoorthyIIHR, BangaloreIIHR, Bangalore

Area and Production of flower Area and Production of flower cropscrops

YearYear Area (ha)Area (ha) Production (t)Production (t)

(lakh No)(lakh No)

1991-921991-92 30,90930,909 1,48,6031,48,603

(22)(22)

1993-941993-94 53,21253,212 2,32,536.322,32,536.32

(5122.75)(5122.75)

1995-961995-96 81,92381,923 3,33,758.793,33,758.79

(5368.4)(5368.4)

1997-981997-98 65,69665,696 3,65,6853,65,685

(6121.523)(6121.523)

1999-001999-00 88,60788,607 5,09,193.605,09,193.60

(6806)(6806)

2005-062005-06 126235126235 6,93,4016,93,401

(27618)(27618)

Major flower growing statesMajor flower growing states

StateState % area under % area under flowersflowers

Tamil NaduTamil Nadu 29.1829.18

KarnatakaKarnataka 22.5322.53

Andhra PradeshAndhra Pradesh 11.5111.51

MaharashtraMaharashtra 8.098.09

West BengalWest Bengal 6.106.10

These five states account for about 71% area under flowers in the country.

Floriculture BusinessFloriculture Business

Non-traditional floriculture/Hi-tech floricultureNon-traditional floriculture/Hi-tech floriculture(Modern/Cut flowers):(Modern/Cut flowers):

The flowers are usually harvested with a long stem The flowers are usually harvested with a long stem which are used for vase purposes, office which are used for vase purposes, office arrangements, bouquets, hand posy and for gift arrangements, bouquets, hand posy and for gift purposespurposes..

Modern/Cut flowers : Modern/Cut flowers : GladioliGladiolihi-tech Rosehi-tech RoseCarnationCarnationGerberaGerberaOrchidsOrchidsAnthuriumsAnthuriums

LiliumLilium

Trend in Export of Floricultural Trend in Export of Floricultural products (Rs. Millions)products (Rs. Millions)

ParticularParticularss

1991-921991-92 1994-951994-95 1997-981997-98 2001-2001-0202

CGR* CGR* (%)(%)

Cut Cut flowersflowers

3.993.99 29.9829.98 189.41189.41 557557 64.0364.03

Dried Dried flowersflowers

64.3564.35 195.78195.78 581.10581.10 940940 33.5533.55

Live Live plantsplants

40.1540.15 60.4360.43 33.7333.73 1515 -12.17-12.17

Dried Dried plantsplants

23.9923.99 10.3510.35 48.3848.38 -- 9.459.45

Bulbs, Bulbs, Tubers Tubers etcetc

12.0612.06 11.8311.83 29.8129.81 2525 11.9311.93

TotalTotal 144.54144.54 308.37308.37 882.43882.43 15351535 29.4729.47

* Compound Growth Rate; The total export value for the year 2005-06 is Rs. 2994 million.

Export of Floriculture productsExport of Floriculture products

29%

51%

14%

2%4%1996-97

61%

1%

0%2%

36%

2001-02

49%

3%

18%

30%

Cut flowers

Dried flowers

Live plants

Dry plants

1991-92

Floriculture business in the Nilgiris, Floriculture business in the Nilgiris, TNTN

GenesisGenesis Established comparative and competitive advantage for TeaEstablished comparative and competitive advantage for Tea Agro climatic potential for a variety of flower crops– untappedAgro climatic potential for a variety of flower crops– untapped Changing global order demands crop diversification?Changing global order demands crop diversification?

ObjectivesObjectives To examine the present production and marketing To examine the present production and marketing

opportunities for floricultural crops in Nilgiris district and opportunities for floricultural crops in Nilgiris district and To estimate the market potential and there of the marketing To estimate the market potential and there of the marketing

strategies for boosting floriculture business in the district.strategies for boosting floriculture business in the district.

Focus Area and cropsFocus Area and crops

Focus areaFocus area Udhagai (42%) Coonoor (19.87%) and Udhagai (42%) Coonoor (19.87%) and

Gudalur (32.9%) – production centresGudalur (32.9%) – production centres Bangalore and Coimbatore – Destination Bangalore and Coimbatore – Destination

centrescentres

Focus cropsFocus crops Carnation (28.98%), bird of paradise Carnation (28.98%), bird of paradise

(22.3%), anthurium (15.55%), lilium (22.3%), anthurium (15.55%), lilium (11.88%), rose (10.8%), alstroemeria (11.88%), rose (10.8%), alstroemeria (5.19%) and gerbera (2.48%)(5.19%) and gerbera (2.48%)

MethodologyMethodologySurvey and Rapid AppraisalSurvey and Rapid AppraisalDetailed costs, returns and profit Detailed costs, returns and profit

analysis of selected cropsanalysis of selected cropsMarket survey and analysis Market survey and analysis Estimation of demand and supplyEstimation of demand and supplyMarket potential estimationMarket potential estimation

Study areaStudy area

HADP, NilgirisHADP, Nilgiris

Analytical Tools- Market Supply Analytical Tools- Market Supply estimationestimation

Market supply or production of cut Market supply or production of cut flowers flowers

Sj = Qj x AjSj = Qj x Aj Where Where

Sj = Total production of jth cut flower Sj = Total production of jth cut flower crop per annum in lakh numbers crop per annum in lakh numbers

Qj = Yield per hectare of jth cut flowerQj = Yield per hectare of jth cut flower

in lakh numbers in lakh numbers

Aj = Area under jth flower crop in Aj = Area under jth flower crop in hectareshectares

Market demand estimationMarket demand estimation

Dj = {∑Qij(WS) } + Qj(RL) Dj = {∑Qij(WS) } + Qj(RL) i = 1 to n marketsi = 1 to n markets WhereWhere Dj = Demand for jth cut flower crop per Dj = Demand for jth cut flower crop per annum in lakh numbersannum in lakh numbersQij (WS)= Quantity demanded of jth flowerQij (WS)= Quantity demanded of jth flower crop per annum by the wholesalers in crop per annum by the wholesalers in

thethe ith market in lakh numbersith market in lakh numbersQj(RL) = Quantity demanded of jth flower crop perQj(RL) = Quantity demanded of jth flower crop per annum by the retailers in the local annum by the retailers in the local

market market in lakh numbersin lakh numbers

ItemsItems CarnatioCarnationn

GerberaGerbera LiliumLilium Rose Rose (without (without subsidy)subsidy)

Rose Rose (With (With

subsidysubsidy))

CostsCosts 187652187652 149477149477 12334141233414 121911219122

9458694586

GRGR 393120393120 160560160560 16880001688000 9975099750 9975099750

NRNR 205468205468 1108311083 454586454586 -22162-22162 51545154

Yield (No)Yield (No) 144000144000 4896048960 8000080000 5250052500 5250052500

Cost of Cost of Production Production (Rs/stem)(Rs/stem)

1.301.30 3.053.05 15.4215.42 2.322.32 1.801.80

Price Price (Rs/stem)(Rs/stem)

2.732.73 3.283.28 17.1017.10 1.901.90 1.901.90

NRNR 1.431.43 0.230.23 1.681.68 -0.42-0.42 0.100.10

BCRBCR 2.092.09 1.071.07 1.371.37 -- 1.051.05

Comparative Economics of Flowers grown in Ooty (Rs/500 m2)

Margin of wholesaler in cut flower Margin of wholesaler in cut flower tradetrade

FlowerFlower PurchasPurchase pricee price

MarketinMarketing costg cost

Selling Selling priceprice

wholesalerwholesaler’s margin’s margin

CarnationCarnation

Star HotelsStar Hotels 3.003.00 -- 5.005.00 2.00(67%)2.00(67%)

BangaloreBangalore 3.003.00 0.140.14 3.503.50 0.36(12%)0.36(12%)

CoimbatoreCoimbatore 2.502.50 0.100.10 3.00 3.00 0.40(16%)0.40(16%)

KolkataKolkata 3.003.00 0.390.39 4.004.00 1.00(33.31.00(33.3%)%)

GerberaGerbera

BangaloreBangalore 3.003.00 4.004.00 1.00(25%)1.00(25%)

Bird of paradiseBird of paradise

Star HotelsStar Hotels 10.0010.00 -- 15.0015.00 5.00(50%)5.00(50%)

Margin of retailer in cut flower sale at Margin of retailer in cut flower sale at OotyOoty

FlowerFlower PurchasPurchase pricee price

MarketinMarketing costg cost

Selling Selling priceprice

Retailer’s Retailer’s marginmargin

CarnationCarnation 3.003.00 -- 5.005.00 2.00(67%)2.00(67%)

AlstroemeriAlstroemeriaa

1.501.50 -- 2.502.50 1.00(67%)1.00(67%)

RoseRose 4.004.00 0.160.16 6.006.00 1.84(46%)1.84(46%)

GladioliGladioli 4.004.00 0.160.16 6.00 6.00 1.84(46%)1.84(46%)

Margin of retailer in cut flower sale in Margin of retailer in cut flower sale in CoimbatoreCoimbatore

FlowerFlower PurchasPurchase pricee price

MarketinMarketing costg cost

Selling Selling priceprice

Retailer’s Retailer’s marginmargin

CarnationCarnation 3.003.00 0.160.16 4.004.00 0.84(28%)0.84(28%)

AlstroemeriAlstroemeriaa

1.001.00 0.100.10 1.501.50 0.40(40%)0.40(40%)

BouquetsBouquets 50.0050.00 -- 75.0075.00 25.00(50%25.00(50%))

BouquetBouquet 125.00125.00 -- 200.00 200.00 75(60%)75(60%)

BouquetBouquet 150.00150.00 -- 300.00300.00 150(100%)150(100%)

ArrangemeArrangementnt

500.00500.00 -- 1000.01000.000

500 500 (100%)(100%)

Estimated Supply and Demand for Estimated Supply and Demand for flowersflowers

(Lakh stems)(Lakh stems)

Cut flowerCut flower Annual Annual supplysupply

DemandDemand Excess Excess DemandDemand

CarnationCarnation 201.15201.15 238.01238.01 36.86 (18%)36.86 (18%)

GerberaGerbera 10.0610.06 21.9821.98 11.92 (118%)11.92 (118%)

LiliumLilium 49.5049.50 50.3150.31 0.81 (1.63%)0.81 (1.63%)

RoseRose 31.2531.25 ** --

AlstromeriaAlstromeria 36.0036.00 39.6539.65 3.65 (10%)3.65 (10%)

AnthuriumAnthurium 5.605.60 5.855.85 0.25 (4%)0.25 (4%)

Bird of Bird of ParadiseParadise

2.322.32 2.942.94 0.62 (27%)0.62 (27%)

Sl.No.Sl.No. YearYear Value (Rs.lakh)Value (Rs.lakh) Major importing countriesMajor importing countries

11 1996-971996-97 1808.151808.15 Japan(39), Netherlands(28), UK(8), Japan(39), Netherlands(28), UK(8), USA(8), Germany(7), Singapore(3)USA(8), Germany(7), Singapore(3)

33 1998-991998-99 2511.662511.66 Japan(33), Netherlands(19), Japan(33), Netherlands(19), Singapore(6), Australia(6), USA(6), Singapore(6), Australia(6), USA(6),

UK(6), UAE(4), Switzerland(3)UK(6), UAE(4), Switzerland(3)

33 2000-012000-01 3909.683909.68 Japan(23), Netherlands(19), Japan(23), Netherlands(19), Switzerland(8), Italy(8), Switzerland(8), Italy(8),

USA(6),Singapore(5), UAE(5)USA(6),Singapore(5), UAE(5)

44 2002-032002-03 4323.384323.38 Japan(49),Netherlands(7), France(7), Japan(49),Netherlands(7), France(7), Germany(4), Australia(3)Germany(4), Australia(3)

55 2004-052004-05 3611.903611.90 Japan (40), Netherlands (19),UAE(5), Japan (40), Netherlands (19),UAE(5), Australia(5), Singapore (4), Italy(4)Australia(5), Singapore (4), Italy(4)

66 2005-062005-06 7413.077413.07 Japan, (72) Netherlands(5), UK(2), Japan, (72) Netherlands(5), UK(2), USA(3), Australia(2), UAE(3), USA(3), Australia(2), UAE(3), Switzerland(1), Italy(1),France(1)Switzerland(1), Italy(1),France(1)

Export of cut flowers from India

Recent developments in Recent developments in marketing of cut flowersmarketing of cut flowers

Contract price – carnation, gerbera, lilium, Contract price – carnation, gerbera, lilium, rose, alstromeriarose, alstromeria

Infrastructure park – cold storage, packing Infrastructure park – cold storage, packing etc.etc.

Value addition – bouquets, pot arrangements, Value addition – bouquets, pot arrangements, office arrangements, office arrangements,

E-marketing – dew drops - online marketingE-marketing – dew drops - online marketing IFAB – Online marketing of flowersIFAB – Online marketing of flowers AEZ – Coorg in Karnataka for Anthuriums, AEZ – Coorg in Karnataka for Anthuriums,

Ooty in TN for carnation, gerbera, Ooty in TN for carnation, gerbera, Uttaranchal for GladiolusUttaranchal for Gladiolus

Constraints in production and marketing of Constraints in production and marketing of cut flowers in Nilgiriscut flowers in Nilgiris

Quality planting material – bulbs to be Quality planting material – bulbs to be imported. imported.

Flower cultivation is capital intensive – Flower cultivation is capital intensive – lack of technical knowledgelack of technical knowledge

Problems of pests and diseases - botrytis Problems of pests and diseases - botrytis Local markets absorb small quantity – Local markets absorb small quantity –

dependence on intermediaries for external dependence on intermediaries for external demanddemand

Credit sales of flowers – payment defaultCredit sales of flowers – payment default Absence of specialized packing and Absence of specialized packing and

transport –wastage of flowerstransport –wastage of flowers Export of Ooty flowers is not yet a realityExport of Ooty flowers is not yet a reality

Existing Institutional support for cut flowers in Existing Institutional support for cut flowers in NilgirisNilgiris

Department of Horticulture, Government of Tamil Department of Horticulture, Government of Tamil Nadu Nadu

Hill Area Development Programme (HADP) and Hill Area Development Programme (HADP) and Central Sector Schemes through Tamil Nadu Central Sector Schemes through Tamil Nadu Agricultural University, Ooty Agricultural University, Ooty

UPASI Krishi Vigyana Kendra UPASI Krishi Vigyana Kendra Nilgiris Integrated Flori-tech Company Ltd. Nilgiris Integrated Flori-tech Company Ltd.

(NIFCO) - SHG, women (NIFCO) - SHG, women

Future strategyFuture strategy

Identifying regional specialization pockets Identifying regional specialization pockets Expansion of area under floricultural cropsExpansion of area under floricultural crops Supply of quality planting materials by Supply of quality planting materials by

opening up of public/private plant material opening up of public/private plant material multiplication centre at Ooty itself multiplication centre at Ooty itself

Training growers on production technology Training growers on production technology and drying of flowers and drying of flowers

Exploring the possibilities of opening up an Exploring the possibilities of opening up an auction centre for cut flowers in Ooty auction centre for cut flowers in Ooty

Developing working models that integrate Developing working models that integrate

production with marketingproduction with marketing Model 1: Integrating production Model 1: Integrating production

with marketingwith marketingModel II : Integrated production Model II : Integrated production

with marketing and value with marketing and value addition-Establishing a model addition-Establishing a model ‘Flower boutique’ ‘Flower boutique’

Establishing Floriculture Establishing Floriculture Infrastructure Parks (FIP) Infrastructure Parks (FIP)

Setting up of e-commerce in cut Setting up of e-commerce in cut flower trade flower trade

Shade net and open ffield cultivated flowers

Ant huriums Bird of paradise

Carnations

Gerbera

Rose Liliums

Polyhouse grown flowers

Flower packing and Flower packing and arrangementsarrangements

ACKNOWLEDGEMENTSACKNOWLEDGEMENTS

Sri. S.J. Chiru, IAS, Project Director, Sri. S.J. Chiru, IAS, Project Director, HADP, UdhagaiHADP, Udhagai

Dr S. D. Shikhamany, Director, IIHR, Dr S. D. Shikhamany, Director, IIHR, BangaloreBangalore

Mr. Shivan, NIFCO FlowersMr. Shivan, NIFCO Flowers Chairman, CPC, IIHR, BangaloreChairman, CPC, IIHR, Bangalore Department of Horticulture, Department of Horticulture,

Udhagamandalam and GudalurUdhagamandalam and Gudalur Producers of cut flowers, Nilgiris Producers of cut flowers, Nilgiris

districtdistrict Flower Traders in Ooty, Bangalore Flower Traders in Ooty, Bangalore

and Coimbatoreand Coimbatore

Thank YouThank You