|
|
|
|
A Case Study of India's Horticulture
|
|
|
|
 |  | |
Facts:
- Horticulture accounts for 30% of India’s agricultural GDP from 8.5% of cropped area.
- India's international transportation costs are 20-30% higher than other countries.
- Indian grapes are 40% cheaper than Chile’s but by the time they reach the Netherlands, they cost the same.
- India’s major exports include onions, mango pulp, fresh mangoes, dried walnuts, fresh grapes.
- India’s biggest export markets are South Asian & Middle Eastern countries. |
|
| | India is a large, low-cost producer of fruit and vegetables, and horticulture is a sector with huge export potential. But, high transportation costs, inadequate storage facilities, a fragmented supply chain, and weak quality standards at home are eroding its competitiveness. The study proposes two priorities for reform: 1.Creating an integrated and competitive domestic agricultural market 2.Improving communication, transport, storage, distribution, and agricultural support services. | | Â |
Download Overview » Presentation 1 » Presentation 2 » |
|
|
Chapter 2: International Trade in Horticulture
|
| | Rising incomes and growing consumer interest in a variety of fresh fruits and vegetables year-round is stimulating international trade in horticulture. India has several advantages in the sector. It is one of the world's biggest producers of horticultural products growing nearly 11 percent of all the world's vegetables and 15 percent of all fruit. And its production costs are less than half of those in other parts of the world. Despite these advantages, India's share in the global market is insignificant - it accounts for only 1.7 percent of the global trade in vegetables and 0.5 percent in fruits. | | Â |
|
|
|
Chapter 3: Is there a Rationale for Protection?
|
| | India imposes an import tariff of 30 percent or more on a wide range of horticultural products to protect its own farmers. The study examines a select basket of horticultural commodities and finds that many products such as bananas, onions, and tomatoes are competitive and do not require any protection. In the case of seasonal products like grapes and oranges, the low average price of Indian products compared to imports means that imports are largely restricted to times when domestic producers cannot serve the market. Eliminating tariffs for such products is therefore likely to benefit consumers without affecting producers. The high levels of protection that India maintains also undermine its ability to demand lower protection abroad. | | Â | |
|
|
Chapter 4: What Undermines Comparative Advantage? The Role of Domestic Constraints
|
| | Poor transport infrastructure, inadequate storage facilities, and a fragmented supply chain are eroding India’s advantage as a low cost producer. Poor logistics lead to delays and wastage, and weaken farmers' incentives to improve quality. India’s international transportation costs are 20-30 per cent higher than comparable countries and its marketing chain does not enjoy economies of scale. Many of these inefficiencies are due to restrictions on domestic and foreign competition. Fundamental weaknesses in infrastructure can be remedied by creating the environment for private investment and undertaking the necessary public investment. | |  |
|
|
|
Chapter 5: Is the External Environment conducive to Export Expansion?
|
| | Today, mandatory official standards set by foreign governments are becoming less important than quality standards demanded by foreign buyers. For India to meet the stringent quality standards required abroad, it must first address the weaknesses in its standard setting mechanisms at home. Indeed, foreign trade regimes are often opaque and complex and adopt deceptive forms of protection. But, a willingness to reform its own trade regime - which in any case subsidizes the inefficient intermediary more than the farmer - will enable India to take a more forceful position in the WTO negotiations. It can then more effectively secure not just lower levels of foreign protection, but also greater transparency, simplicity, and predictability in foreign trade regimes. | | Â | |
|
|
Chapter 6: Priorities for Domestic Reform and International Engagement
|
| | Remedying bottlenecks from farm to market is arguably a higher priority than raising farm productivity. In fact, without more efficient logistics, increasing production can lead to gluts that hurt rather than help farmers. Greater liberalization of services including air, maritime, and road transport, as well as improvements in storage and marketing infrastructure and services are critical if India is to emerge as an important exporter in agriculture in general and horticulture in particular. | | Â |
|
|
| | World Bank Program
Website maintained by the World Bank Office in New Delhi, a launching pad to all information on World Bank activities in the country (strategy, projects, publications, etc.) | |  | Visit Page » |
| | India: Country Environmental Analysis
Strengthening Institutions for Sustainable Growth | |  | Visit Page » |
| | Development Data
A wide range of social and economic measures on India, including links to the World Bank's most important online development databases. | |  | Visit Page » |
| | Analysis and Research
Compilation of all the World Bank's publications on India, with 'search' options and links to analysis and research on other South Asian countries. | |  | Visit Page » |
| | World Bank Program in South Asia
Launching pad to all information on World Bank activities in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. | |  | Visit Page » |
| | Request an interview
To interview the report's author e-mail South Asia media contact. | |  | Visit Page » |
|
|
|
|
|
|
RSS