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Friday, August 1, 2014
- Neat rows of pampered-looking rose plants, drip-irrigated and ‘misted’ by tiny sprinklers, grow inside temperature-controlled greenhouses with high domes opened periodically for fresh air, offering 10 million cut-rose stems for export each year.
The 25-hectare farm, located roughly 35 km outside the southern Indian city of Bangalore, belongs to Suvarna Florex, arguably India’s largest cut-rose exporter.
But though the plants are thriving, the industry is hassled by such thorny issues as the high royalty rates of its foreign-bred roses and steadily increasing input costs.
Major export destinations are Europe, the United Arab Emirates (UAE), Japan, Canada and Australia.
Until 2010, the Bangalore-based operation Karuturi commanded nearly 10 percent of the cut-rose market in Europe and expanded rapidly from rose farms in Kenya to agricultural crops in Ethiopia.
Tangled in a web of bankruptcy, violations of labour and taxation laws in Kenya and money troubles – among others – in Ethiopia, Karuturi faced a storm of criticism over its controversial acquisition on paper of 400,000 hectares of virgin lands in Ethiopia at a very inexpensive rate, beginning in 2010.
The move, which some called a ‘land grab’ and which resulted in the threat of displacement of thousands and the loss of livelihoods for many in the Gambella region of Ethiopia, quickly became synonymous with Karuturi’s notorious founder Sai Ramakrishna, whose reputation tainted India’s operations in Africa.
According to a disgruntled rose-grower and former chief of the forest services in the neighbouring state of Andhra Pradesh, R. D. Reddy, Ramakrishna is “a playboy in all respects; one who speculated in stocks with borrowed money and lost heavily, and now the whole industry in India is being blamed because of him.”
Dr. Manjunatha Reddy, a Dubai-based Indian industrialist with a rose farm located just five km away from Karuturi’s flower operations in the Holata region, near the Ethiopian capital Addis Ababa, says that the ‘takeover on paper’ in the Gambella region is symptomatic of Ramakrishna’s speculative Ponzi-like financial schemes.
“His misdeeds have really turned public sentiment against Indian industry in Africa,” he told IPS, adding that a bad commercial reputation goes viral in a continent where local communities rely heavily on the land for their livelihoods.
Reddy says other Indian enterprises like telecommunications and farming have also been tarnished with the same negative image cast by Karuturi’s actions on the ground.
“We now have difficulty even in raising funds for agri-business from venture capitalists and investment brokers,” Reddy asserted.
Karuturi’s head offices in Bangalore did not respond to IPS’ repeated requests for an interview.
A matter of royalties
Other growers, situated in the elevated Deccan plateau lands surrounding the southern cities of Bangalore and Pune, dismiss Karuturi’s reputation as ‘immaterial’, nothing more than an embarrassment for the sector.
What’s really bothering major players in the industry, according to Suvarna Florex Managing Director Sridhar Chowdary, are the “huge royalties we have to pay foreign breeders for rose varieties.”
An ‘introduced industry’ stemming from the demand for cut-flowers in the international market, India’s flower sector was initially heavily in debt due to huge capital expenses incurred from the purchase of foreign greenhouse infrastructure imported from the Netherlands, along with Dutch patents for its roses.
On average, each grower incurred costs of up to 20 million rupees (roughly 332,000 dollars) per hectare of rose farm. Now, 20 years later, the cost of setting up a farm with indigenous technology costs less than half that amount.
“This is a billion dollar industry, controlled by European [mainly Dutch and French] breeders,” horticultural consultant Dr. Thilak Subbaiah told IPS.
“There is no way we can compete,” he stressed, adding that problem is made worse by Indian horticultural institutes’ lack of attention to breeding research.
According to Anne Ramesh, president of the South India Floriculture Association and chairman of Suvarna Florex, royalty rates for Indian growers average between 0.85 and 1.25 euros per plant for each variety of rose.
“This is the same rate as Kenya, which grows 100 percent [of its flowers] for export, whilst we grow half that percentage at best, the rest being for the domestic market,” he told IPS. “We find it unfair to have the same rate of royalty imposed on us.”
Small steps in a growing industryAs late as 2007 the industry at large was still complaining about a marked lack of awareness on exporters’ needs and a dearth of any government assistance.
Cold-chain systems for transportation, facilitated international flights, phyto-sanitary inspections and the lack of any financial incentives for the industry were among the top concerns over half a decade ago.
Recents developments, however, have stemmed some of the criticisms directed at the administration.
A cold-chain flower-auction centre set up in Bangalore, capital of the state of Karnataka, is described by rose-growers as one of the best in the world market. This, coupled with speedy transportation and easy facilitation at Bangalore’s Kempegowda International Airport, is putting a smile on many exporters’ faces.
In addition, the government has made some important concessions that have greatly reduced the burden on local growers.
“The South India Floriculture Association approached the government with our financial constraints and we subsequently got a one-time waiver of 50 percent of our heavy loans [in 2004-2005] incurred due to imported infrastructure,” Ramesh said.
“Today we have greenhouse-technology pioneers, we have employment at the village-level and small farmers who can put up greenhouses because of state and central government incentives. We managed to progress because the government saw the industry as a way to rural development,” he stated.
In the neighbouring state of Tamil Nadu alone, the rose industry employs 10,000 women and 3,000 men.
Rural farmers now cater mostly to the domestic market, says Satish Aswathappa, co-owner of Nandi Floriculture, based in Devanahalli, about 40 km outside Bangalore city.
“We are farmers ourselves, we deal directly with other rural farmers who give us their roses and we have a same-day system of grading and sending the roses by public bus to Hyderabad [capital of Andhra Pradesh],” he added.
Environmental concerns also influence the industry, whether domestic or export-oriented.
Chowdary says protective environmental measures are perceived by growers as “survival technologies.”
Walking IPS around Suvarna Florex’s huge farm, Chowdary demonstrated how rainwater is collected in aqeducts and then channeled into a central pond, reducing dependency on groundwater.
There are also checkdams, plastic sheeted ‘ponds’ where rainwater is held in troughs, recharge measures around groundwater pumps and wells, and vermicomposting of plant leafage for manuring.
With groundwater sources steadily depleting due to overusage by consumers and mismanagement by the government, the quality of groundwater has also suffered, he said, which could be disastrous for rose-growers since the plants thrive best when fed uncontaminated water.
Rose growers guzzle water at the rate of millions of litres per week for a farm covering 25 hectares. Sustainable rainwater harvesting techniques are crucial, since an hour’s rain provides enough water to sustain a 25-hectare plot for two days.
Still, input costs remain high, since the use of chemicals has increased in “application and in price”, according to Subbaiah. “We also pay more than government-stipulated wages plus incentives just to ensure the [workers] turn up,” he added
Organic compost has depleted too as lands and cattle around the cities disappear into urbanisation.
Despite these problems, a steadily increasing domestic market means the industry will likely be around for a while.