IWIN PROJECTS   > Agro & Food Processing

Horticulture, Agriculture and Food Processing Industry
in the State of West Bengal

West Bengal’s six agro-climatic zones offer an extensive & diversified variety of environs for the development of temperate, sub-tropical and tropical produce to cater to the market round the year. Though horticultural cultivation is an age-old practice in West Bengal, the establishment of a Research Station, on a small 25-acre farm at Krishnanagar, Nadia, in 1934, marked the beginning of scientific horticultural activities in the state. Horticulture thereafter grew through research and development programmes over the years.

In agriculture, the state has achieved significant growth in agriculture production over the past decade (CAGR of 4.5% during 1996-2001). The state is now among the country’s top-two producers in a wide variety of agricultural produce and has attained self-sufficiency in most key crops. This self-sufficiency has resulted in reasonable amounts of marketable surplus for most key crops. Natural resources and bold government initiatives, like comprehensive and sustained land reform, have helped the state achieve strong growth in agriculture.

West Bengal’s 2010 Agribusiness Vision: The state has already identified agribusiness as a priority sector that would play a pivotal role in driving overall economic growth of the state. Therefore transition from agriculture to agribusiness is central to West Bengal’s 2010 Agribusiness Vision.

Horticulture Crops of the state: The state is a leading producer of a wide range of horticulture items. It produces significant quantities of traditional vegetables like brinjal (aubrgines), tomato, cabbage, cauliflower, cucurbits and lady’s finger (okra). It also produces non-traditional vegetables like broccoli, gherkins, baby corn, brussels sprouts, celery etc. Among fruits, the major ones are pineapple, lychee, guava, banana, mango and sapota. The state is the largest producer of pineapple and second largest producer of lychee. The state also grows coconut, cashewnut, arecanut, betel vine and various spices in abundance.

Besides this, the state enjoys favourable agro-climatic conditions and abundant water supply to grow a variety of high-value, exotic flowers. Historically, the Darjeeling hills of North Bengal have played a pioneering role in the development of floriculture in India. In fact, nurseries at Kalimpong in the Darjeeling district were among the first to export floriculture products from India to the USA, UK and other European countries. Tuberose, Rose, Chrysanthemum, Gladiolus, Marigold, Jasmine, Sunflower, Gerbera, Gypsophila, Balsam, Chinarose, Cosmos, Orchid and Lily are some of the major ornamentals grown in the state. West Bengal has the scope for commercialization of flora, especially in North Bengal and in some parts of South Bengal.

The state also has immense possibilities in Medicinal plants and herbs. Out of the 145 different medicinal plants grown in the state, the State Medicinal Plant Board has stressed upon cultivation of 32 medicinal plants which are in demand in both domestic and international markets.

Contribution of West Bengal to All India Production of Certain Horticulture Crops for the year 2001-2002

Horticulture Crops	Production in West Bengal (‘000 MT)	Production in India (‘000 MT)	West Bengal to All India Production (%)
Fruites
Pineapple	279.50	1221.10	22.88%
Lychee	42.00	412.00	10.00%
Guava	112.20	1631.50	6.87%
Banana	335.20	6167.04	5.43%
Sapota	27.50	674.00	4.08%
Mango	380.30	10237.00	3.71%
Vegetables
Cauliflower	1670.00	4694.60	35.57%
Cabbage	1929.90	5617.10	34.35%
Brinjal	2388.50	7676.90	31.10%
Tomato	588.60	7277.10	8.00%
Total Vegetables	17779.40	93921.50	18.93%

Agriculture Crops of the state: The state has significant production in some of the key crops on an all India level. It is the largest producer of rice and second largest producer of potato. The average yield of potato in the state is not only higher than the India level but also higher than the world average yield.

Grains produced in the state include cereals like rice, wheat, maize, barley and a variety of pulses like tur, masur, mung, gram and khesari. In rice, the state produces a wide range of varieties, both scented and non-scented. The state is also a significant producer of oilseeds where the main varieties are groundnut, linseed, mesta, nigerseed, rapeseed, mustard, sesamum and soyabean.

Contribution of West Bengal to All India Production of some Important Crops

Crops	2000-2001		2001-2002		West Bengal to All India Production (%)
	West Bengal	India	West Bengal	India	2000-01(P)	2001-02
Rice	12428.00	84870.00	15256.70	93100.00	14.60	16.40
Wheat	1058.60	68760.00	961.50	71800.00	1.50	1.30
Total Foodgrains	13815.20	195920.00	16501.20	212000.00	7.10	7.80
Oilseeds
(i) Sesame	92.30	590.00	90.80	...	15.60	...
(ii)Rapeseed and Mustard	417.00	4210.00	336.90	5000.00	9.90	6.70
Jute & Mesta (a)	7512.00	10480.00	8927.50	11600.00	71.70	77.00
Potato	7673.10	22100.00	7822.40	22100.00	34.70	35.40

 P = Provisional
(a) = Production in thousand bales of 180 kgs. each.

McKinsey, in its vision document for West Bengal, has stated that the state should aspire to be ‘the Food Bowl of India’ by 2010. This is because the state has already achieved self-sufficiency in critical food crops and has assumed leadership across a wide range of agricultural produce.

Yield Rates of Some of the Important Crops of West Bengal and India

Crops	2000-2001		2001-2002
	West Bengal	India	West Bengal	India
Rice	2287	1961	2514	2086
Wheat	2485	2708	2215	2770
Gram	917	744	851	865
Jute	2182	2026	2440	2174
Potato+	26	18	26	18
Tea	1689(R)	1682	1718 (R)	1662

R = Revised
+ = Tonnes per hectare

West Bengal’s intrinsic strengths in agriculture/horticulture:
• Favourable agro-climatic conditions: the state has six agro-climatic zones within three agro-climatic regions, classified by the Planning Commission, Govt. of India, which offers distinctly different and diversified tropical, subtropical and temperate crops.
• High Growth rate of agriculture.
• Fertile soil.
• Low cost of cultivation.
• Large pool of educated farm labour at competitive rates, which is substantially lower than the wage rates in Malaysia, Philippines and even Sri Lanka.
• Entrepreneurial spirit of the small farmers.

State Initiatives in agriculture/horticulture:
• Successful land reforms.
• Democratic decentralisation of the Panchayat system.
• State support for agricultural inputs.
• Statewide extension services network.
• State research and development initiative.

Food Processing Industry in the state: The state is a leading producer of many horticulture and agriculture items. It is also a significant producer of freshwater fish, shrimp, eggs and meat. Thus good investment opportunities exist in the areas of food processing industries, the important ones being fruit and vegetable processing, meat, fish and poultry processing, confectionaries, beverages, fast foods and milk products.

The growth potential of this sector is enormous and it is expected that processed food production will increase substantially in the next decade with the rapid escalation in consumption of value-added food products. According to McKinsey’s FAIDA report, West Bengal is one of the three front-running states in India in the food and agro-processing sector.

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Salient Features of West Bengal Horticulture/Agriculture:
• Largest producer of rice, pineapple and vegetables in the country.
• The state produces 0.25 million tons of fruit and over 10 million tons of vegetables.
• The pineapple variety found in the state is entirely processable, making West Bengal the ideal destination for Pineapple processing units. On an average, the state accounts for 23% of national pineapple production.
• Second largest producer of potato and lychee.
• The varieties of lychees grown in the state are Bombai and Muzaffarpur, which are similar to Shahi and Rose Scented – considered among the best varieties across the world in terms of taste and flavour. Thus West Bengal has the opportunity to export and tap the world market.
• A significant producer of mango, mandarin orange and sapota.
• The state grows the best processable variety of mango – the Pickling variety.
• The state ranks third in India in flower production. Floriculture turnover in the state is more than Rs.63 crores annually.
• The state also grows medicinal plants and herbs, which offer exciting possibilities. A foundation in Bangalore has developed a new drug for obesity control from the rind of a fruit of the garcinia species, a plant that grows abundantly in West Bengal.
• In the last few years, the state has witnessed a boost in the production of spices, coconut, cashew nut, arecanut and betel vine.
• Five Agri Export Zones across the state for Pineapple, Lychee, Mango, Potato and Vegetables where the investors could enjoy both Central and State Government incentives and benefits.

Production leadership across several crops at a glance

Crops	Country Rank (2000)	Country Share (2000)
Vegetables	1st	24%
Pineapple	1st	27%
Rice	1st	18%
Potato	2nd	30%

Investment Opportunities across several crops:

• The state has identified crops where it has strength and which present the most significant opportunities. These are: Pineapple, Lychee, Mango, Potato, Tomato, Papaya, Green Vegetables, Rice, Betel vine, Mushroom, Coconut and Cashewnut.
• The state is a major center for vegetable production, with good off-season production of temperate types. There is a lot of scope for fresh vegetable exports. There must be emphasis on premium quality and high yields to replace high priced supplies from Australia and USA.
• Market opportunities also exist in selling the fresh fruits and vegetables in local and interstate market.
• The state being the first largest producer of rice in India offers scope for supplying the excess produce to the interstate markets. This would help channel the surplus to other markets, preventing a glut in the local market.
• The state is a significant producer of different varieties of scented rice, which has potential both for domestic branding and export.

Investment Opportunities across Farming, seeing the huge potential in Horticulture are:

• Production of Hybrid Seeds, Plants, Tissue Culture.
• Setting up of Nurseries and Export Oriented Horticulture Estates – Organic Farming.
• Growing Processable Varieties of Fruits and Vegetables.
• Green House Production.

Investment Opportunities across Floriculture/Medicinal Plants and Herbs:
• There is a booming market for cut flowers in Western Europe. Since October to February is a lean season for flower production in Europe (because of the snowfall), West Bengal, particularly the northern part of it, can take advantage of this and engage in flower production as this period is perfectly suitable for production in the identified area.
• There is good potential for exporting flowers like Gladioli, Gerbera, Tuberose, Rose and Orchids to countries like Netherlands, Middle East, U.K and Japan. Japan is a large consumption market for flowers. It is one of the largest importers of orchids.
• Indoor plant and foliages like – Thuja, Asparagus, Palms, Cycads, and Ferns, which grow profusely in West Bengal, also have very good demand.
• Plant-lets, bulbs and corms, growing extensively in the state also have export potential.

West Bengal accounts for 70% of dried flower export. Besides, there is a scope for ‘Pot-pourri’ on a commercial scale. An analysis of Strength, Weakness, Opportunities and Threat (SWOT) of the floriculture industry with special reference to international market has shown good potential for exporting floriculture products from the state.

• Other than export markets, flowers can also be sold in the local and interstate markets.
• The state also grows different varieties of medicinal plants and herbs, which have significant demand in India as well as abroad. WHO has predicted that by 2020, the total transaction in medicinal plants would amount to 3 trillion US Dollar per year and by 2050, the market for medicinal plants and its derivatives would be valued at 5 trillion US Dollar. The state also grows various aromatic plants and the State Medicinal Plant Board encourages farmers to cultivate different aromatic plants.

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The agro and food processing industries sector is one of the largest in terms of production, consumption, export and growth prospects. This sector ranks fifth in the country in size, employs over 1.6 million workers (20% of the nation’s labour force) and accounts for 15.19% of total industry output and 5.5% of the GDP. India’s growing domestic demand for value-added processed foods and its self-sufficiency in supply will help in the fast growth of this sector.

The state of West Bengal is a significant producer of many horticulture and agriculture items, which give it a natural advantage to invest in Fruit and Vegetable Processing, Spices and Grain Processing industries. Besides this, the state also produces other Food Products like fish, meat and poultry products in abundance, which also have enormous processing prospects.

Some of the key features of West Bengal’s other Food Products:
• In fisheries, the state ranks first in freshwater fish production and second in shrimp aquaculture.
• The state has the largest brackish water resources for shrimps in India and has been a major player in shrimp exports from India.
• In total meat production (including poultry), the state ranks a close second in the country.
• In duck meat production, the state ranks first in the country.
• The state ranks fifth in the country in egg production.
• The state offers vast opportunity for value added dairy products and sweetmeats. The sweetmeat industry in West Bengal is famous throughout the world for its wide range of products.

Investment Opportunities in Food Processing Industry in the state:

• The state is considered to be one of the most attractive poultry markets in India accounting for 13% of the country’s consumption. It is the highest per capita consumer of eggs and a significant consumer of poultry meat. The state also consumes significant amount of sheep and goat meat. All these above features identify the potentials for investing in poultry and meat processing, which has both domestic and international market demand.
  
  West Bengal’s percentage share to India in Livestock & Poultry Population (million) in 2000-2001
  

  Livestock/Poultry	West Bengal’s share to India
  Goat	13.80%
  Poultry	13.20 %
  Cattle	9.40 %
  Pig	8.50 %
  Sheep	2.50 %
  Buffalo	1.10%

  
  Source: Animal Resources Development Department, Govt. of West Bengal
• MILK AND MILK PRODUCTS
  The state of West Bengal offers extensive scope in the area of processed milk products as 90% of the demand for value-added milk products is presently met by imports. Considering the big gap between demand and supply within West Bengal, investments in the dairy sector will be extremely profitable, if properly synchronized and organized.
  Investment Opportunities exist in the fields of:

  • Liquid milk: Largest opportunity and potential for processors to provide UHT milk to the urban and semi-urban consumers. There is also scope for supplying milk to the local sweetmeat industry, as this sector requires a huge quantity of milk.
  • Processed milk products like butter, cheese, milk powder, baby food and condensed milk.
  • Indian Sweetmeat: West Bengal is considered to be the hub of Indian sweetmeats for its favourite ‘Rosogolla’ and ‘Sandesh’.
  • Ice Cream manufacturing: One of the most lucrative of all value added dairy products. But for manufacturing ice creams, the state requires investment in the form of better cold storage and transportation facilities. The state, being one of the few power surplus states in the country, enjoys an advantage in this aspect.
    
• CONFECTIONERY, BEVERAGES, FAST FOOD
  The state is well poised to invest in this segment as demand for these products is growing at a rapid pace. The range of products include Confectioneries, Chocolates, Cocoa products, Soya-based products, Ready to eat foods, Soft drinks, Mineral water, High Protein foods etc.
  
  Why invest in Food Processing Industry
• The Food Processing Industry in India is on an assured track of growth and profitability over the coming decades. It is estimated that it will attract phenomenal investment-capital, human, technological and financial of over Rs.1,40,000 crores in the next decade.
• Changing Lifestyle with traditional joint family systems giving way to ‘nuclear families’ where husbands and wives are both working, demand for ‘packaged & preserved’ food products is simply rising. Very soon, the vast sector of fast foods, ready meals, snacks and processed foodstuff will hold centre-stage.
• Rapid urbanisation, increased literacy, rising per capita income and western influences have all caused rapid growth and changes in demand patterns, leading to tremendous new opportunities for exploring the large latent food processing sector.
• An average Indian spends about 50% of household expenditure on food items.
• India has got ready demand for processed food products since it is considered to be one of the biggest emerging markets, with over 1 billion population and a 250 million strong middle class.
• India as well as West Bengal has identified food processing as one of the thrust areas. A Proactive West Bengal government is determined to bring about rapid investment in this sector and therefore eager to meet specific needs of the investors.
• Liberalised overall policy regime, with specific incentives for high priority food processing sector, provide a very conducive environment for investments and exports in the sector

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