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Floriculture business in the Nilgiris - an economic analysis
T.M. Gajanana, M. Sudha, D. Sreenivasa Murthy and V. Dakshinamoorthy
IIHR, Bangalore
Area and Production of flower cropsYear Area (ha) Production (t)
(lakh No)
1991-92 30,909 1,48,603
(22)
1993-94 53,212 2,32,536.32
(5122.75)
1995-96 81,923 3,33,758.79
(5368.4)
1997-98 65,696 3,65,685
(6121.523)
1999-00 88,607 5,09,193.60
(6806)
2005-06 126235 6,93,401
(27618)
Major flower growing states
State % area under flowers
Tamil Nadu 29.18
Karnataka 22.53
Andhra Pradesh 11.51
Maharashtra 8.09
West Bengal 6.10
These five states account for about 71% area under flowers in the country.
Floriculture Business
Non-traditional floriculture/Hi-tech floriculture(Modern/Cut flowers):
The flowers are usually harvested with a long stem which are used for vase purposes, office arrangements, bouquets, hand posy and for gift purposes.
Modern/Cut flowers : Gladiolihi-tech RoseCarnationGerberaOrchidsAnthuriums
Lilium
Trend in Export of Floricultural products (Rs. Millions)
Particulars 1991-92 1994-95 1997-98 2001-02 CGR* (%)
Cut flowers 3.99 29.98 189.41 557 64.03
Dried flowers
64.35 195.78 581.10 940 33.55
Live plants 40.15 60.43 33.73 15 -12.17
Dried plants
23.99 10.35 48.38 - 9.45
Bulbs, Tubers etc
12.06 11.83 29.81 25 11.93
Total 144.54 308.37 882.43 1535 29.47
* Compound Growth Rate; The total export value for the year 2005-06 is Rs. 2994 million.
Export 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, TN
• Genesis• Established comparative and competitive advantage for Tea• Agro climatic potential for a variety of flower crops– untapped• Changing global order demands crop diversification?
• Objectives• To examine the present production and marketing
opportunities for floricultural crops in Nilgiris district and • To estimate the market potential and there of the marketing
strategies for boosting floriculture business in the district.
Focus Area and crops
• Focus area• Udhagai (42%) Coonoor (19.87%) and Gudalur
(32.9%) – production centres• Bangalore and Coimbatore – Destination centres
• Focus crops• Carnation (28.98%), bird of paradise (22.3%),
anthurium (15.55%), lilium (11.88%), rose (10.8%), alstroemeria (5.19%) and gerbera (2.48%)
Methodology• Survey and Rapid Appraisal
• Detailed costs, returns and profit analysis of selected crops
• Market survey and analysis
• Estimation of demand and supply
• Market potential estimation
Study area
• HADP, Nilgiris
Analytical Tools- Market Supply estimation
• Market supply or production of cut flowers
Sj = Qj x Aj Where
Sj = Total production of jth cut flower crop per annum in lakh numbers
Qj = Yield per hectare of jth cut flower
in lakh numbers
Aj = Area under jth flower crop in hectares
Market demand estimation
Dj = {∑Qij(WS) } + Qj(RL) i = 1 to n markets Where Dj = Demand for jth cut flower crop per annum in lakh numbersQij (WS)= Quantity demanded of jth flower crop per annum by the wholesalers in the ith market in lakh numbersQj(RL) = Quantity demanded of jth flower crop per annum by the retailers in the local market in lakh numbers
Items Carnation Gerbera Lilium Rose (without subsidy)
Rose (With
subsidy)
Costs 187652 149477 1233414 121912 94586
GR 393120 160560 1688000 99750 99750
NR 205468 11083 454586 -22162 5154
Yield (No) 144000 48960 80000 52500 52500
Cost of Production (Rs/stem)
1.30 3.05 15.42 2.32 1.80
Price (Rs/stem) 2.73 3.28 17.10 1.90 1.90
NR 1.43 0.23 1.68 -0.42 0.10
BCR 2.09 1.07 1.37 - 1.05
Comparative Economics of Flowers grown in Ooty (Rs/500 m2)
Margin of wholesaler in cut flower trade
Flower Purchase price
Marketing cost
Selling price
wholesaler’s margin
Carnation
Star Hotels 3.00 - 5.00 2.00(67%)
Bangalore 3.00 0.14 3.50 0.36(12%)
Coimbatore 2.50 0.10 3.00 0.40(16%)
Kolkata 3.00 0.39 4.00 1.00(33.3%)
Gerbera
Bangalore 3.00 4.00 1.00(25%)
Bird of paradise
Star Hotels 10.00 - 15.00 5.00(50%)
Margin of retailer in cut flower sale at Ooty
Flower Purchase price
Marketing cost
Selling price
Retailer’s margin
Carnation 3.00 - 5.00 2.00(67%)
Alstroemeria 1.50 - 2.50 1.00(67%)
Rose 4.00 0.16 6.00 1.84(46%)
Gladioli 4.00 0.16 6.00 1.84(46%)
Margin of retailer in cut flower sale in Coimbatore
Flower Purchase price
Marketing cost
Selling price
Retailer’s margin
Carnation 3.00 0.16 4.00 0.84(28%)
Alstroemeria 1.00 0.10 1.50 0.40(40%)
Bouquets 50.00 - 75.00 25.00(50%)
Bouquet 125.00 - 200.00 75(60%)
Bouquet 150.00 - 300.00 150(100%)
Arrangement 500.00 - 1000.00 500 (100%)
Estimated Supply and Demand for flowers
(Lakh stems)
Cut flower Annual supply
Demand Excess Demand
Carnation 201.15 238.01 36.86 (18%)
Gerbera 10.06 21.98 11.92 (118%)
Lilium 49.50 50.31 0.81 (1.63%)
Rose 31.25 * -
Alstromeria 36.00 39.65 3.65 (10%)
Anthurium 5.60 5.85 0.25 (4%)
Bird of Paradise
2.32 2.94 0.62 (27%)
Sl.No. Year Value (Rs.lakh) Major importing countries
1 1996-97 1808.15 Japan(39), Netherlands(28), UK(8), USA(8), Germany(7), Singapore(3)
3 1998-99 2511.66 Japan(33), Netherlands(19), Singapore(6), Australia(6), USA(6),
UK(6), UAE(4), Switzerland(3)
3 2000-01 3909.68 Japan(23), Netherlands(19), Switzerland(8), Italy(8),
USA(6),Singapore(5), UAE(5)
4 2002-03 4323.38 Japan(49),Netherlands(7), France(7), Germany(4), Australia(3)
5 2004-05 3611.90 Japan (40), Netherlands (19),UAE(5), Australia(5), Singapore (4), Italy(4)
6 2005-06 7413.07 Japan, (72) Netherlands(5), UK(2), USA(3), Australia(2), UAE(3), Switzerland(1), Italy(1),France(1)
Export of cut flowers from India
Recent developments in marketing of cut flowers
• Contract price – carnation, gerbera, lilium, rose, alstromeria
• Infrastructure park – cold storage, packing etc.• Value addition – bouquets, pot arrangements,
office arrangements, • E-marketing – dew drops - online marketing• IFAB – Online marketing of flowers• AEZ – Coorg in Karnataka for Anthuriums, Ooty
in TN for carnation, gerbera, Uttaranchal for Gladiolus
Constraints in production and marketing of cut flowers in Nilgiris
• Quality planting material – bulbs to be imported. • Flower cultivation is capital intensive – lack of
technical knowledge• Problems of pests and diseases - botrytis • Local markets absorb small quantity –
dependence on intermediaries for external demand
• Credit sales of flowers – payment default• Absence of specialized packing and transport –
wastage of flowers• Export of Ooty flowers is not yet a reality
Existing Institutional support for cut flowers in Nilgiris
• Department of Horticulture, Government of Tamil Nadu • Hill Area Development Programme (HADP) and Central
Sector Schemes through Tamil Nadu Agricultural University, Ooty
• UPASI Krishi Vigyana Kendra • Nilgiris Integrated Flori-tech Company Ltd. (NIFCO) -
SHG, women
Future strategy
• Identifying regional specialization pockets • Expansion of area under floricultural crops• Supply of quality planting materials by opening
up of public/private plant material multiplication centre at Ooty itself
• Training growers on production technology and drying of flowers
• Exploring the possibilities of opening up an auction centre for cut flowers in Ooty
Developing working models that integrate
production with marketing
• Model 1: Integrating production with marketing
• Model II : Integrated production with marketing and value addition-Establishing a model ‘Flower boutique’
• Establishing Floriculture Infrastructure Parks (FIP)
• Setting up of e-commerce in cut flower trade
Shade net and open ffield cultivated flowers
Ant huriums Bird of paradise
Carnations
Gerbera
Rose Liliums
Polyhouse grown flowers
Flower packing and arrangements
ACKNOWLEDGEMENTS
• Sri. S.J. Chiru, IAS, Project Director, HADP, Udhagai
• Dr S. D. Shikhamany, Director, IIHR, Bangalore
• Mr. Shivan, NIFCO Flowers• Chairman, CPC, IIHR, Bangalore• Department of Horticulture,
Udhagamandalam and Gudalur• Producers of cut flowers, Nilgiris district• Flower Traders in Ooty, Bangalore and
Coimbatore
Thank You