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Posted at: Apr 29, 2019, 7:15 AM; last updated: Apr 29, 2019, 7:15 AM (IST)

Reaping fruits of labour

Assured marketing of horticultural crops can help to extricate farmers from the web of unprofitable farming, writes SS Chhina

The procurement of wheat and paddy by government agencies has confined the cropping pattern to these two crops at the cost of the cultivated area for other equally important crops. India is at the number two spot, after China, with respect to horticultural products. China is also on top in the export of processed fruits and vegetables, but India is far behind (19th). In 2017, China exported processed fruits and vegetables worth $8,805 million, but India’s exports were to the tune of just $1,085 million. In the export of fresh fruits and vegetables, China is No. 6, while India is No. 28. During the same period, China exported these products worth $5,837 million, way ahead of India ($1,166 million). 

Apart from low exports, these products are not within the reach of every Indian. Fruits that should be part of the diet of every individual are beyond the reach of 90 per cent of the Indians because of the high prices. If it may be assumed that there is no potential to enhance the production of these products, the cropping pattern and the depleting area under these crops negate that conception. Positive co-relation between farm holding and the area under these crops was observed in a number of studies. As the size of the holding is increasing, the area under these crops is also rising. 

While analysing the volatility of the prices of vegetables and fruits and the oft-repeated circle of fluctuations, the lack of assured marketing has been observed as the main impediment. As 93 per cent of the landholdings are below 5 acres, farmers are reluctant to grow such crops because of the risk, either of price or of output. Assured marketing of wheat and paddy is the main reason for the escalation of area under those crops. The small farmers are prepared to forgo the high profits if there is an element of risk.

Fruits and vegetable crops are yielding more income, as established by the fact that with 13 per cent area under these crops, their contribution to the agricultural GDP is 30 per cent. While there is underemployment in agriculture, these crops have the capacity to absorb more labour. Central and state governments are stressing upon diversification of the cropping pattern as a measure to enhance the farm income, and there is high potential of income and employment in horticulture products. Assured marketing is the issue that needs to be addressed by a judicious policy.

It is being reported that 18 per cent of the horticultural products are wasted every year because of inadequate preservation facilities. Hardly 0.4 per cent of these products reach the cold stores. The farmers have the least involvement in the cold storage services. About 96 per cent of the cold stores are being owned by private entrepreneurs and 4 per cent belong to co-operative societies and the government. The distribution of cold stores is also uneven. About 60 per cent of the cold stores are located in Punjab, Uttar Pradesh, West Bengal and Gujarat. The co-operative movement could not spur the farmers to build their own stores. 

Four per cent of fruits and 2 per cent of vegetables are processed for value addition, whereas in developed countries, 85 per cent of the horticulture products are processed to prolong their shelf life. In Thailand, 35 per cent of the products are processed; China is far ahead in this respect. The role of processing is imperative for exports. 

While analysing the slow progress of agro-processing, particularly of fruits and vegetables, inadequate supply of these products to avail the full capacity of the unit is cited as the major factor. There is volatility in production as well as prices. Instances of dumping potatoes on the roads in one year and depending on their imports in another are common.

This volatility of prices of fruits or vegetables never affects its traders. No risk is involved in their business. It is a daily affair, not seasonal. They may purchase from the market or the cold store. Even during the period when the potatoes were dumped, traders were enjoying profit. Often the consumer price is double or three times the prices obtained by farmers for most of the vegetables and fruits. But what is the share of the farmer in that price? This share can be created through the co-operative model, similar to the model of dairy co-operatives in India. 

The Centre has announced a policy under which some crops would be added to the state procurement list in collaboration with the state governments. It is imperative to add some fruit and vegetable crops that are most suited to those areas. Even in the same state, the zone system can be adopted on the basis of high-yield crops of the zone. The contract farming system of developed countries like Canada, Australia and the US, in which the contracts are made for quantity and price with the farmers, must be emulated. The horizontal constraint of space in our country can be compensated by vertical expansion by growing fruit trees. A prudent policy assuring marketing of horticultural crops can be helpful in extricating the farmers from the web of unprofitable farming.


India’s diverse climate ensures availability of all varieties of fresh fruits & vegetables. It ranks second in fruit and vegetable production in the world, after China. As per National Horticulture Database published by National Horticulture Board, during 2015-16, India produced 90.2 million metric tonnes of fruits and 169.1 million metric tonnes of vegetables. The area under cultivation of fruits stood at 6.3 million hectares; vegetables were cultivated on 10.1 million hectares.


India is the largest producer of ginger and okra among vegetables and ranks second in production of potatoes, onion, cauliflower, brinjal, cabbage etc. Among fruits, the country ranks first in production of bananas (25.7%), papaya (43.6%) and mango (40.4%).


Mango, walnuts, grapes, banana and pomegranate account for a chunk of fruits exported from the country. Onion, okra, bitter gourd, green chilli, mushroom and potato contribute largely to the vegetable export basket.


Though India’s share in global market is nearly 1% only, there is increasing acceptance of horticulture produce from the country.


Fruits and vegetables’ export, 2017-18
Rs 9,410.81 crore 

Fruits 
Rs 4,229.03 crore 

Vegetables 
Rs 5,181.78 crore


The major destinations for Indian fruits and vegetables are UAE, Sri Lanka, Netherlands, Bangladesh, Malaysia, Nepal, UK, Saudi Arabia and Qatar.

The author is Senior Fellow, Institute of Social Sciences, New Delhi

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