OVERVIEW OF FRUIT BUSINESS IN INDIA

Introduction:
India is the second largest producer of fruits in the world. India produced 45.2
million tones of fruits contributing 10.50 percent of the world output (National
Horticulture Board Report 2002-03). But India’s contribution to world trade is rather
insignificant in spite of being the second largest producer of fruits in the world. Even in
the field of tropical fruits, which is its major strength it has not been able to penetrate
global markets. India’s share in the world trade of fruits is a mere 0.25 percent. In this
essay we would focus on growth, issues of concern, strategies adopted, success of the
strategies,potential,future and suggestions for improving fruit business of India.

History of Horticulture Development:

Fruits fall in the category of horticulture corps. There have been no concerted
efforts for planned development of horticulture after independence. The efforts were
focused on addressing the specific problems example technical support and development
efforts were made for certain specific commodities like spices, coconut etc. From 1980-
1992 there was consolidation of institutional support and starting of planning process for
the development of horticulture. The decade from 1993-2003 can be called the golden
period of Indian horticulture. This is because of
 focused attention was given to horticulture with an enhancement of plan
allocation
 knowledge based technology driven efforts were taken for the development of
horticulture.
 It was in this decade that horticulture was recognized as an effective tool for
diversification of Indian agriculture.

Growth:
India has an inherent advantage for producing fruits. India has eight agro climatic
zones that are suitable for cultivation of fruits. Fruits are widely distributed across the
country. Commonly cultivated fruits are Mango(Mangifera Indica), Banana(Musa Sip),
Citrus fruits like Orange (CitrusSativa), Lemon (Citrus Indica),Apple (Malus
Indica),Pear,Grapes (VitisVinifera),Papaya (CaricaPapaya),Litchi (Litchi
Chinesis),Sapota,Guava (Sizium Guazeva),Pomegranate.Minor fruits include Aonla,
Strawberry, Amla (Emblica Officinalis). The below table presents the area, production
and productivity of fruits from 1991-92 to 2001-2002.

Table:1 Area, Production and Productivity of Fruits (Source: NHB,2003)

Year Area(in million Production(in Productivity(in

HA) million tones) MT/HA)
1991-92 2.87 28.63 10.0
1992-93 3.20 32.95 10.3
1993-94 3.18 37.25 11.7
1994-95 3.24 38.60 11.9
1995-96 3.35 41.50 12.4
1996-97 3.58 40.45 11.3
1997-98 3.70 43.26 11.7
1998-99 3.72 44.04 11.8
1999-00 3.79 45.49 12.0
2000-01 3.86 43.13 11.1
2001-02 4.01 43.00 10.7

In the last decade there has been 38 percent increase in area, 50 percent increase in
production, and an average of 15 percent increase in productivity. Since 1961, area,
production, and productivity of fruits have increased by 3,6.2 and 2 times respectively.
We can have an overview of target for from the below table.
Table: 2 Fruit Production achieved and Projection for the Future.
Commodity Production(in million tones) Growth
1998-99 2007-08 2011-12 2020-21 rate(percent)
fruits

Fruit 44.04 75 81 98 7.8

Source: State of Indian Farmer, Horticulture Development, Vol-11, Pg: 42

The rate of growth of Agriculture is 2 percent (2005).In order for economy to grow at 8
percent agriculture should grow at 4 percent and horticulture like fruits should grow at
7.8 percent because the food grain growth is low. The above figures show the potential
offered by fruits.

Issues of Concern:
We are faced with the task of producing high quality produce to face stiff competition
under the liberalized economy. In this context the major concerns for fruit business in
India are as follows,

1. Small Land Holding: Majority of the land holding fall under marginal
category.Below is a table that depicts land holding pattern in India.

Table No: 3, Land holding and Area Operated in percentage

Category Land Holding Area Operated
(Percentage) (Percentage)
Marginal Farmers 61.6 17.2
(Less than 1 Hectare)
Small Farmers 18.7 18.8
(1-2 Hectares)
Semi-Medium Farmers 12.3 23.8
(2-4 Hectares)
Medium Farmers 6.1 25.3
(4-10 Hectares)
Large Farmers 1.3 14.8
(Greater than 10 Hecta)

Source: Agricultural Census-2004.

Smaller land holding is a discouraging factor for taking up Fruit cultivation. Marginal and
small farmers are not inclined towards crops with high gestation period like fruits(except
Banana).59 percentage of the area operated are under marginal, small and semi-medium
farmers. This has placed a limitation on the area that can be covered under horticulture.
2. Yield Potential of Fruit Crops in tones/Ha:
The below table gives an overview of the yield of major fruits in the year 1996 and
the potential that the fruit growers of India can achieve.
Table: 4,Present yield(1996) in MT and the potential that can be achieved
CROP Present Yield Potential
Mango 8.11 15
Banana 26.40 58
Citrus 8.06 30
Apple 6.11 30
Guava 10.77 20
Pineapple 14.45 85
Sapota 13.75 80
Papaya 16.94 80
Grapes 19.20 25
Fruits 10.28 42
Source: Survey of Indian Agriculture

Table No: 5, Comparison of yield of Major Fruits( Brazil,China,India)in Kg/Ha

Fruits Brazil China India

Apple 238888 113634 58800

Banana 135557 233042 247353
Citrus 216493 93446 179584
Grapes 164265 125728 200000
Mangoes 125000 84709 67500
Orange 220251 75493 231343
Papaya 452055 275862 87500
Pineapple 267042 193634 144444
Source: FAO Statistics for 2005
India need to catch up in the productivity of fruits with the best in the world. Emphasis
should be laid on increasing the productivity of Apple,Citrus,Mangoes,Papaya and
Pineapple. Productivity of fruits in India is very low compared to many other countries.
Due to this and other factors, the cost of fruits used for processing in India is almost 3 to
4 times more than that in the world markets. There is also problem of non availability of
suitable varieties of raw materials for processing Increase in productivity apart from
giving the farmers more income will also reduce the cost of raw material for processing
industry.This will lead to optimum utilization of the processing facility and lead to
decrease in cost of purchase of processed foods to the consumer and thereby creating
more demand. Indian produce will also become competitive in export market.

3.Lack of Infrastructure:
The fruit processing industry is not developed. Farmers also lack knowledge of doing
preliminary processing which can extend the shelf life of fruits so that it can be
transported for further processing. Non existence of cold storages and connectivity from
farm to factory or market also adds to the problem. India processes only 2 percent of
fruits compared to 70 percent by Brazil and USA.Over 22 percent of the produce is
spoiled due to lack of processing facilities. Post harvest losses in horticultural produce are
in the range of 5 to 30 percent, which result in a loss of Rs.8000 crore per annum.The
main problems in Infrastructure are,
 Lack of cold storage,freezing chambers,dehumidified temperature controlled
storage and common processing units near the farm gates.
 Absence of proper Link Roads that can connect producers with the market.
 Fragmented retail and agriculture supply chain.
 Lack of cold chain transportation system eg-airconditioned cargo,coaches in
railways,roadways,and refrigerators/insulated containers for perishables,processed
products to minimize post harvest losses at transportation stage and at retail level.
 Lack of quick handling facilities in Airports and Ports.

4.Problems in Processing Fruits:

 Processed fruits hold a share of 27 to 57 percent in the export of fruits. In this, context
problems faced in processing fruits assume significance. They are
 There is no assured supply of raw materials for the processing plants.
 Relatively indifferent quality of the output.
 Non competitive prices because of high energy costs and high packaging costs
 Imposed by the strict quality standards of importing countries.
 There is also problem of non-availability of suitable varieties of raw materials
for Processing.

5. In case of exports, the quality of products and their packaging has to conform to Codex
standards laid under WTO agreement. India should also make her products confirm to
Sanitary and Phyto Sanitary measures.
In the recent past countries like Japan,China,Austraia have imposed ban on imports of
Mangoes and Grapes from India on account of presence of certain fruit flies.
Standardising the techniques and educating the growers about the special post harvest
treatments such us Vapour heat treatment(VHT) of fruit for disinfections for export to
developed countries.
Pesticide Residue In fruits:
Export to European countries requires stringent regulation on the pesticide residue levels
in the fruits. The export quality standards have not yet been determined in a number of
horticultural crops.

6.Organic Farming:
There is a need to promote Organic farming in production of fruits. Organically
cultivated fruits can fetch higher price in the international market and also provide new
market opportunities. There is urgent need to develop technology for Organic farming
and create awareness on the benefits provided.
.
7. Human resource requirement for research and development and skill of farmers in
cultivating fruits need to be taken care off.
8.Lack of in-house quality control and testing facilities in conformity with international
standards.

Strategies Adopted:
The horticulture research and development was at very low ebb till the third five
year plan and had received limited attention even thereafter. The plan allocation for
research in horticulture crops which started with modest allocation of Rs.3.48 crore
was enhanced to Rs.31.90 crore in seventh plan and 213 crore in ninth plan. Below is
a table giving account of amount allocated for horticultural development in various
plans.

Table:6,Amount Allocated in Various Five year Plans

Plan Amount allocated in Rs crore
7 24.19
8 789
9 1453.56
10 2105

Source: State of Indian Farmers, Vol: 11, Horticulture Development, Pg: 49.

Indian Institute of Horticulture was established in 1968 to give further impetus to

research. Department of Horticulture was also setup in many other Agricultural
universities. National Horticulture Board was setup in 1985.

The period 1991-2003 has been a period of development for horticulture. The
period witnessed the movement of horticulture from a rural confine to commercial
production resulting in adoption of improved seeds, and technologies like micro-
irrigation, protected cultivation, precision farming, integrated management of the insect,
pests and diseases. All the links in the chain of production and consumption was
addressed. Productivity of crops increased many fold and the sector sustained the growth
rate of 6.5 percent .This strategies and mission approach led to increase in area under
cultivation of fruits, production and productivity also. Refer Table 1 for the data.

Results of the Strategies:

The results of the above strategies are summarized in the below table for major fruits.
Table No:7 Showing the Result of Strategies in the Decade 1991-2001.
Crop Area(Lakh Ha) Production(lakh Productivity(tones/Ha)
tonnes)
1991-92 2000- 1991-92 2000-01 1991-92 2000-01
01
Apple 1.95 2.4 11.48 12.30 5.88 5.12
Banana 3.84 4.9 77.90 161.71 20.27 33.30
Citrus 3.87 5.00 28.22 44.50 7.21 8.80
Grape 0.32 0.50 6.68 10.60 20.87 21.20
Guava 0.94 1.51 10.95 16.31 11.64 11.30
Litchi 0.49 0.56 2.44 4.33 4.97 7.60
Mango 10.78 15.20 87.51 102.10 8.11 7.00
Papaya 0.45 0.71 8.05 17.70 17.88 27.50
Pineapple 0.57 0.80 7.69 12.25 13.49 13.60
Sapota 0.27 0.23 3.96 7.00 14.66 12.40
Others 5.26 5.75 41.44 68.80 7.87 -
Total 28.74 40.10 286.33 430.00 - -
Source: State of the Indian Farmer,Vol:11,Horticulture Developement
Future Strategy:

National Horticulture mission:

National Horticulture Mission (NHM) will be implemented in all the States and Union
Territories of India except the North Eastern States, Himachal Pradesh, Jammu &
Kashmir and Uttaranchal (for which a separate Technology Mission for integrated
development of horticulture exists) to promote holistic growth of the horticulture sector
covering fruits, vegetables, root & tuber crops, mushroom, spices, flowers, aromatic
plants, cashew and cocoa. This will be a Centrally sponsored scheme in which
Government of India shall provide 100% assistance to the State Missions during Tenth
Plan. During the XI Plan, the Government of India assistance will be 85% with 15%
contribution by the State Governments.

1. MISSION OBJECTIVES

The main objectives of the Mission are:

 To provide holistic growth of the horticulture sector
 To enhance horticulture production , improve nutritional security and income
support to farm households;
 To establish convergence and synergy among multiple on-going and planned
programmes for horticulture development;
 To create opportunities for employment generation for skilled and unskilled
persons, especially unemployed youth

2. STRATEGY

To achieve the above objectives, the mission would adopt the following strategies
 Ensure an end-to-end holistic approach covering production, post harvest
management, processing and marketing to assure appropriate returns to
growers/producers
 Promote R&D technologies for production, post-harvest management and
processing and assist setting up post harvest facilities
 Enhance acreage, coverage, and productivity
 Adopt a coordinated approach and promotion of partnership, convergence and
synergy among R&D, processing and marketing agencies in public as well as
private sectors, at the National, Regional, State and sub-State levels
Promote capacity-building and Human Resource Development at all levels.
Potential:
India for long had been an exporter of fruits in raw form. To get more money out of
export India has to add value to its raw produce.
India exports Mango, Grapes, banana, Apple, Papaya, Litchi,
India exports fruits to Malaysia, UAE, UK, Bangladesh, Saudi Arabia, Kuwait,
Netherlands, Indonesia and Philippines.
The US market for fruit alone is worth US $ 20 billions. The export market for India can
be classified into three regions,
1. USA: The demand for dried tropical fruits is 5000MT.
2. European Union: Dried tropical fruits such as Mango, Papaya, Banana, Pineapple
have good potential in EU.EU is net importer of fruits. Market size of dehydrated
tropical fruits in Europe is 11500MT.
3. Japan: As regards Japan, it is the net importer of most of the dehydrated products.
The average import of dehydrated products in Japan is of the order of 62,000 MT
valued at US$ 133 million in 1998 which is estimated to have gone up to 68,000
tonnes valued at US$ 145 million in the year 2001. The maximum commodity of
import is dried grapes, banana.

India as a nation of billion people also offers potential. India has a potential of absorbing
4MT over the production of 45 MT. There is vast potential to be tapped in fruits in the
world and in India.(Source:APEDA).

Future:
The global population is expected to touch 8.5 billion by the year 2020; there will be
definite increase in food requirement as there would be more stomachs to feed. With
dwindling land and water resources, achieving envisaged production levels would require
visionary approach having integration of all efforts. Horticulture will have a special role
in meeting the food requirements. The focus here should be on increasing the production,
productivity and quality of produce. To ensure that, availability of quality seed and
planting material would be vital. Training and development of human resources would
become necessary. Pre harvest and post harvest management of fruits need improvement.
Tissue culture and bio-technology hold lot of promise and it should be exploited to bring
in better high yielding varieties with inbuilt resistance to plants and diseases. A beginning
has been made in the right direction. We are slowly moving towards a “Golden
Revolution”. The proposed launch of National Horticulture technology Mission at a
massive outlay of Rupees Fifteen Thousand cores, if implemented properly shall put
Horticulture in top growth trajectory.

Suggestion:
India is the world’s second largest producer of fruits. Value addition to fruits become
imperative to earn more profit.
1. Fruits: Fruits are subjected to varied type of products like juice, beverages,
squash, cordial syrup, juice concentrate, juice powder, jams, jellies, marmalades,
canned fruits, fermented products – wine, vinegar, pickles and chutneys, frozen
fruits, puree and pastes. Dried anardana, amchur, fruits bar. Recently fruits are
being utilized for flavors, pigments, freeze drying, anti-oxidant and therapeutics.
India has to tap this vast potential.
2. The process to produces have to be innovative based on the exclusive and exotic
fruits grown in the country.
3. The quality of the products and their packaging has to confirm to the Codex
standards laid under WTO agreement.
4. Market promotion has to be professional in all respects. The Indian
producers/exporters would be required to participate in the International thematic
fairs for good ingredients were the products can be displayed for the interested
global buyers.
5. In house research and development for food processing needs to enhance. Food
Preserving techniques knowledge should be passed on to the farmers so that
preliminary preservation takes place in the farm itself.
6. There should be forward and backward integration from lab to farm and from
farm to market or factory.
7. The farmers should form Co-operative for effective marketing and price
realization of the fruits produced.
8. Infrastructure facilities like cold storages, warehousing, easy transportation need
to be established.
9. Contract or Co-operative farming that bring in the economies of scale,Public
Private Partnership in building markets,infrastructure in total supply
chain,collection and grading centres are also need of the hour.
10. A cluster based approach should be followed for Horticulture development.Eg:
Grape production in Maharasthra,Mangoes in Andhra Pradesh.
11. Provisions for the processing industry to buy directly from the
farmers.Modifications to APMC act.
12. While marketing of fruits and vegetables is expected to be dominated by
cooperatives and middle men in short term, organised direct sourcing
supermarkets are likely to emerge dehydrated products, fruit juices, pickles and
other forms of preserves are likely to emerge as popular processed products.