Rose exports India

Rose Farm in Pushkar, Rajasthan. Photograph by Cathryn Game

Indian rose exporters, hit by a dip in local production, have been bracing for lower margins. Domestic production has been low because rains were spread over more days, depriving rose farms of the sunlight they require for growth. Coupled with higher labour and input costs, weather patterns are "definitely impacting production and bottom lines massively," said Manjunath Reddy, managing director of Bangalore-based Meghna Floritech Ltd and a committee member of the South India Floriculture Association, an industry body, which estimates a reduction of 20-25% in rose production this year.

Indian rose farms are located in two clusters at Bangalore and Pune, and flower growers typically export over 60% of produce between September and March. For the rose trade, the festive season running up to Valentine’s Day on 14 February, is a boom time for sales. Roses from Rajasthan have traditionally been used for fragrance, essence, rose water, and other edible products. But now Rajasthan has a research facility at the agriculture university in Udaipur to help farmers grow roses for consumers overseas.

"We expect this Valentine's to be quite normal and the prices that we are talking about are pretty much the same prices that we did last year, but in rupee context, it is better though our sales currency is euro," said K.S. Ramakrishna, managing director of Bangalore-based Karuturi Global Ltd, the world’s largest exporter of roses. The rupee has depreciated 22% against the dollar, by 9% against the euro and 33% against the yen since the start of this year, according to Bloomberg data. That translates into more rupees for every dollar, euro or yen that is earned by exporters, who had been hit last year by the steep appreciation of the local unit.

India’s floriculture exports for the year ended March were valued at Rs338 crore, according to the Agricultural and Processed Food Products Export Development Authority, or Apeda, a Union government agency. Cut flowers such as rose stems constitute around 25% of India’s floriculture exports, which are less than 1% of the international trade in flowers. Commercial floriculture gives greater yield to farmers and takes less labour and water than traditional foodgrain.

Livemint
Ajay Sukumaran

Invest in infrastructure

In August 1998, the AB Vajpayee government had unveiled two mega road infrastructure projects — construction of national highways, popularly known as the east-west and north-south corridors, and modernisation of the country’s major airports.



The highway projects got off to a flying start and contributed to the growth momentum the economy gained in the following five years. The airport modernisation project got delayed during the tenure of the Vajpayee government. It was the Manmohan Singh government that began its implementation. And an expanded highways project was also taken up for implementation by the Manmohan Singh government.

Government officials admit that there is now need to announce a few more mega infrastructure projects like the ones that were initiated by the Vajpayee government. Not just to earn some electoral dividends six months from now, but also to improve the economy’s prospects of beating the recession.

What Prime Minister Manmohan Singh continues to do (he did that again while in Muscat on Sunday) is only to talk about the need for a $500-billion investment in India’s infrastructure sector. China, in sharp contrast, is not talking. It has announced a $586-billion plan for investments in infrastructure projects to stimulate the Chinese economy.

Considering that the Indian economy is going through one of its worst crises, you would have also appreciated the government’s eagerness to launch schemes that would entail huge expenditure on projects, create jobs and hopefully some more demand.

On November 6, the Cabinet approved a Rs 950-crore project to construct Afghanistan’s Parliament building and the Indian chancery complex in Kabul. In addition, it enhanced the productivity-linked monetary reward scheme for port and dock workers, approved the national biodiversity action plan and ratified the agreement on the transfer of sentenced persons between India and the Hong Kong Special Administrative Region

The Union Cabinet and the Cabinet Committee on Economic Affairs (CCEA) approved a Rs 1,339-crore national project to construct 53 kilometres of new broad-gauge railway tracks in Sikkim. A Rs 574-crore 110-MW hydroelectric project in Arunachal Pradesh, dredging of the Vallarpadam terminal at Cochin at a cost of Rs 381 crore, a Rs 350-crore biotechnology research programme in partnership with industry and some other schemes to set up border check posts and schools in educationally backward areas were among other major decisions taken at that CCEA meeting.

Central government officials concede that this surely does not indicate that the government is just a few months away from general elections. Nor does it show any urgency on the part of the government to announce some big projects to pump-prime the economy as large sections of Indian industry have demanded during their recent interaction with the government in the wake of the global financial crisis.

Business Standard
AK Bhattacharya

Tata Tea rural initiative

The growth of local tea companies in UP, despite the fact that Tata Tea and HUL were also growing, posed uncomfortable questions. Sent out to seek answers, the Tata Tea sales teams as well as the hired consultants, came back with the same answer — Tata Tea was not selling in more than 100,000 villages in UP.

Local industry bought cheaper CTC tea from auctions and packaged it into poly-packs in backyards. With zero advertising, retailers pushed this product for higher margins, often Rs 40 per kg as against the Rs 20 the organised sector could offer. Realising that the local tea industry had resurfaced in rural areas, Sachin Vyas general manager for sales and distribution at Tata Tea, opted to reach rural consumers through NGOs, despite the severe apprehensions of other team members. "These institutions had access to people like none other," says Vyas. Eventually, the Sir Ratan Tata Trust and the Dorabji Trust screened 12 names.

The rural initiative was launched in December 2005. Named Gaon Chalo, meaning "let's go to the villages", the intiative saw Tata Tea joining with 12 NGOs to spread its reach across rural UP. By the end of 2006 Tata Tea added more than 20,000 retailers, including 500 new rural distributors, in 10,000 villages across UP to its distribution network.

"The whole problem with any rural initiative is that people think it’s unviable since a lot depends on retailers’ sincerity and integrity," says Vyas. "You need large investments and the creation of a feasible infrastructure."

MoUs were signed with NGOs (Rural Dealer-1) to act as main distributors at a district level, collecting various products from Tata Tea on credit before giving them to mobile rural distributors (RD-2), also on credit, who would then visit a fixed number of villages periodically to supply tea to small rural retailers (RD-3), who in turn sold to rural consumers. RD-3s made payments to the RD-2s on subsequent visits to replenish stock, and so on up the chain. An average RD3 now earns an additional monthly income of Rs 300-1,000, while an RD2 earns Rs 5,000-7,000. Eventually, NGOs made payments and took supplies from the company.



"Our status as facilitators of rural income has improved our image and financial position," says Raj Shekhar of Irada, an Allahabad-based NGO. And Meenu Tyagi of Sabla, a Rae Bareilly-based NGO, notes that a steady, locally-earned income curbs migration to urban areas to a large extent. "My value and status in society has increased because of the Tata name," says Sanjeev Kaushik, an RD2 supervisor in Muzzafarnagar.

A Gaon Chalo pilot is now being attempted in Madhya Pradesh. The next phase is expected to see most group products (automotives, salt, consumer goods, telecom, insurance) being introduced to this permanent, exclusive distribution chain under a programme called Tata Hut.

Businessworld
Sreevalsan Menon