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AGRO Potential in West Bengal
AGRO Potential in West Bengal
Ascon Agro PE & B Pvt. Ltd. which is a Pailan Group company who have entered into a joint
venture with AFT/PB Counseil of France for setting up a food processing unit in Dhaniakhali,
the state
Arambagh Hatcheries was set up in 1975 and has grown by over 30% per year marketing
poultry products and has also ventured into a chain of mini supermarkets selling groceries to
cold meat and ready-to-cook food items.
Agro & Food Processing Industries form a very important part of the States economy. The West
Bengal Government is setting up a number of policies & plans to focus on the selected areas like
vegetables, fruits, fisheries, rice, poultry, dairy & floriculture.
The major thrust areas of the policy are:
Increase agricultural production & productivity vertically through wider adoption of
appropriate eco-system-specific & cost effective technology.
Bring more area under High Yielding Variety (HYV), hybrid & improved varieties of crops.
Emphasize increase production of pulses & oil seeds in non-traditional areas & nonconventional seasons.
Create employment opportunities in this sector to improve the socio-economic status of the
Recommendations of Products & Services in which there are a host of business opportunities for
entrepreneurs:
The state has been making commendable efforts in the Horticultural sector, and the agri-business has
been identified as a key area for sustainable economic growth. There is a whole range of business
opportunities for entrepreneurs:
Pre-Harvest Sector
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Processing Sector
Fruits and Vegetable processing
Processed food - Frozen Fruits and Vegetables Pulp / concentrates from Mango, Banana,
Papays, Tomato, Guava, Pineapple and Litchi, potato granules / flakes, dehydrated potato
cubes and slices, aseptic banana puree, tomato paste, canned fruits and vegetables, dehydrated
fruits and vegetables, candid and crystallized fruits, button mushroom cultivation and
processing
Poultry and Meat processing
Meat Processing
Integrated poultry hatching, farming and processing
Fish processing
Frozen and Dehydrated fish
Fish Products
Dairy
Rice Bran Oil, Spice Oils and Oleoresins
Support services and Infrastructure such as Cold Chain / Marketing Centre, Cold chain
facilities for preservation of fruits, vegetables and flowers, Efficient post-harvest handling
system right from farm to retail marketing, Setting up of pre-cooling facilities, refrigerated
transport system and refrigerated retails outlets, Marketing with storage facilities at controlled
and modified atmosphere, Modern Slaughter house, Modern harbour, mechanized boats and
(pouch).
Flexible packaging materials with different types of good laminates
Vacuum packaging and glass flushing (Nitrogen & carbon dioxide) machine
Retort packaging system (Retortable packaging materials and machinery)
Metal container (OTS cans)
Canning machinery
Floriculture
Floriculture including ornamental plant production is an emerging industry in West Bengal with very
high prospects. The state produces around 58,000 tonnes of flowers every year and has more than
10,000 acres of land devoted for that purpose.
Major flowers produced in the state are:
Tuberose
Gladiolus
Rose
Gerbera
Carnation
Cockscomb
Flowers in West Bengal are mainly grown in places like, Kalimpong, Panskura, Ranaghat,
Thakurnagar, Bagnan and also other places around the state. Therefore there is huge potential to
capture the booming export markets of Europe and Japan provided the cold chain and supply chain
support of the state are improved upon. The countries that import flowers from West Bengal are
Holland, Middle East (mainly Sharjah) and the UK.
State Government Initiatives
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The State has set up a floriculture park at Mungpoo in North Bengal, which will provide
common infrastructure to the entrepreneurs. It will have cold storage facilities, grading /
packaging room, tissue culture lab and refrigerated vans to collect flowers and then transport
it.
A mega flower-mart in Mullickghat, Kolkata, is being set up at a cost of Rs 250 million with
dedicated flower stalls, state-of-the-art cold chain infrastructure for preserving flowers and
also plush stalls offering handicrafts and other ethnic treasures. There is comprehensive
multi-storied flower market with facilities for cold storage at Panskura build at cost of more
Tea
West Bengal is the second largest tea growing state in the country contributing almost 21% of the total
production in the country. There are three tea-growing zones in the state.
Darjeeling
Terai
Dooars
Darjeeling tea is considered to be one of the finest in the world. There are 343 tea gardens in West
Bengal covering 1,03,950 hectares planted area. Some of the major players in the Tea industry in West
Bengal include Tata Tea Ltd., a US$ 178 million company which has a joint venture with UK based
James Finlay & Company. Both of them together represent the worlds second largest global branded
tea operations with product and brand presence in over 50 countries. Goodricke Group Ltd. (GGL) a
part of the UK-based Cammelia Plc is the third largest tea producer and the leading producer of
Darjeeling tea in India. Hence there is still some untapped potential in this industry that companies
can tap into.
CONTRACT FARMING
The benefits of Contract Farming are:
To reduce the load on the central and state level procurement system.
To increase private sector investment in agriculture.
To bring about a market focus in terms of crop selection by Indian farmers.
To generate a steady source of income at the individual farmer level.
To promote processing and value addition.
To generate gainful employment in rural communities, particularly for landless agricultural
labour.
To flatten as far as possible, any seasonality associated with such employment.
To reduce migration from rural to urban areas.
To promote rural self-reliance in general by pooling locally available resources and expertise
Officially, West Bengal is opposed to corporate bodies interfacing with farmers under the banner of
Contract Farming. However, West Bengal has not been opposed to any of the collaborative farming by
firms such as PepsiCo. West Bengal has not amended the Agriculture Produce Marketing Committee
Act (APMC), and thus contract farming is not allowed in the state.
Earlier, Arup Roy, Agricultural Marketing Minister, West Bengal, had indicated that the state was
preparing a draft to amend the act, but had specifically said that the state was sceptical of contract
farming, hence would continue to oppose it.
However, for all practical purposes, contract farming, under the name of collaborative or partnership
farming, is gaining popularity among farmers in West Bengal. Contract farming raises income of
farmers, but it should be linked to a government body or any other representative body to safeguard
the interest of farmers.
Potato farming is quite a risky job for the farmers and their gains depend on the losses of the other
producing states. Therefore if the farmers are assured of a price for their produce in lieu of a higher
quality, it is a win-win situation for both the farmers and the entrepreneurs. PepsiCo has made
commendable progress in such an area and in their own words the present scenario is illustrated
below.
Today PepsiCo Indias potato farming programme reaches out to more than 12,000 farmer families
across six states. We provide farmers with superior seeds, timely agricultural inputs and supply of
agricultural implements free of charge.
We have an assured buy-back mechanism at a prefixed rate with farmers. This insulates them
from market price fluctuations.
Through our tie-up with State Bank of India, we help farmers get credit at a lower rate of interest.
We have arranged weather insurance for farmers through our tie-up with ICICI Lombard.
We have a retention ratio of over 90%, which reveals the depth and success of our partnership.
In 2010, our contract farmers in West Bengal registered a phenomenal 100% growth in crop
output, creating in a huge increase in farm income.
The remarkable growth has resulted in farmers receiving a profit between Rs. 20,000 40,000
per acre, as compared to Rs. 1000020,000 per acre in 2009.
In other states there are many such MNCs that have collaborated with the farmers and
achieved success in contract farming. BCC therefore can push the government to change its stance
towards contract farming and encourage private investment in the agricultural sector of the state.
COLD CHAIN
India is an agricultural-based economy. More than 52 percent of Indias land is cultivable, compared
to the global average of 11 percent. Each year, India produces 63.5 million tons of fruits and 125.89
million tons of vegetables. India is also the largest producer of milk (105 million metric tons per
year). India produces 6.5 million tons of meat and poultry, as well as 6.1 million tons of fish a year.
The perishable products transaction volume is estimated to be around 230 million metric tons.
Although India has the potential to become one of the worlds major food suppliers, the countrys
inefficient cold chain network results in spoilage of almost 40 percent of its total agricultural
production. The total value of the cold chain industry is estimated to be as high as USD 3 billion and
growing at 20-25 per cent a year. The total value is expected to reach USD 8 billion by 2015 through
increased investments, modernization of existing facilities, and establishment of new ventures via
private and government partnerships. As a result of the Government of Indias new focus on food
preservation, the cold storage sector is undergoing a major metamorphosis. The Government has
introduced various incentives and policy changes in order to curtail production wastage and control
inflation; increase public private participation and improve the countrys rural infrastructure.
Currently, most of the refrigerated transport in India is operated by small, non integrated firms that do
not make use of state-of-the-art technology.
UNICEF conducted a field study in Chennai and West Bengal in order to see the condition of cold
storage facilities and the report paints a dismal picture of both. However there have been some
government initiatives in this sector and 51 percent FDI clearance in multi brand retail have made
investments in the cold chain industry a lucrative business opportunity. For these reasons the cold
chain industry is being considered as the sunrise sector of the country. There are chances of fall in
potato cold storage as they might be replaced with multi-purpose cold storage. There are considerable
data and figures that attest to the fact that India being one of the highest producers of milk, fruits and
vegetables, can also become the largest supplier of the same, given that there are ample storage
facilities and backward and forward linkages to support the cold chain facilities. Therefore the
government can start attracting foreign capital and also set up discussions with the Centre so that
appropriate funds are allocated in the development of the same.