Strategy for gross national happiness (sgnh) Annexures to the Main Document
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- Floriculture industry Background
- Floriculture potential of Bhutan
- Dried flowers and plants
- Other floriculture related services
- Strategies for the establishment of a Floriculture Industry
- Institutional development and policy support
- Institutional support for infrastructure development
Supply chain management Major players in the supply chain management include producers, processors, traders, and the government. The farmers will be the primary producers of organic foods with each Dzongkhag specializing in specific crop production. Considering the small landholdings of the farmers, farmer cooperatives will be formed to make up the volume and to maximize economic returns of the crop growers. To facilitate farmers to market their products, three Regional Cluster Centres (RCCs) supported by 19 Dzongkhag Cluster Centres (DCCs) will be established for collection/distribution of organic produce from the nearby areas. The proposed locations of the RCC are Paro for the western region, Sarpang (Gelephu) for the central region, and Mongar for the eastern region. As far as possible, the locations of the RCC and DCC are being proposed based either on their close proximity to already earmarked urban hubs or on the ongoing programme on integrated food processing plant (IFPP) of the MoA. In addition to providing essential services required by farmers for organic farming, each cluster centre is expected to serve as a commercial hub for the organic food industry at both Dzongkhag and regional levels. A range of micro and small scale businesses including ICT kiosk, retailing shops, agro processing, packaging, transportation, and other service related centres will be housed in each centre generating ample employment opportunities in the community. The DCC will be the collection point for all organic produce from various gewogs at the Dzongkhag level, which will be transported to the RCC. Each DCC must have the following facilities:
Basic facilities to be established at each Regional Cluster Centre include:
The bulk of the produce collected at the regional level will be transported to the nearest airport for export to the designated countries. Till the second airport is built, goods from all three regions will have to be routed through the Paro Airport. The RCCs and the DCCs will also serve as central agents for supplying organic foods to the hotels, hospitals, schools, and training institutes within the respective regions and the Dzongkhags. Floriculture industry Background The mountainous ecosystem of Bhutan has bestowed it with great diversity in ecological conditions which have led to the great diversity in both flora and fauna that Bhutan is known for. In terms of floricultural production, it means an ideal opportunity for harnessing the unique environmental production potentials for specialized floricultural crops under specific ecological conditions. This will mean sourcing, through research and development, appropriate floricultural crops (in terms of market opportunities of the floriculture crop under development and production potential of the crop in terms of altitudinal range that the crop can be cultivated without compromising the total yield and quality) for specific ecological zones and also looking into the potential and possibilities of developing our native floriculture crop for specific markets. Thus far, the floriculture potential in Bhutan is untapped and under developed. However, the market for floricultural crops outside Bhutan is insatiable. Global and regional demand for specialized flowers like cut flowers and ornamental plants is ever growing. This implies that market penetration, both in international and regional markets, through strategic planning will be imperative. For instance, promoting Foreign Direct Investment (FDI) and commercial floriculture combined with small-scale production will enhance the market penetration. The domestic market for many flowers is growing and this trend could be expected to grow as our economy progresses and as multinational companies begin to invest in Bhutan. Besides the economic benefit, promotion of floriculture industry in Bhutan will contribute immensely to our goals of environmental conservation and providing employment. The Buddhist values of conservation and protection must be embedded into the program of floriculture industry promotion so as to promote the culture of respect for our environment. The proper promotion and establishment of floriculture in the country will not only contribute to the aesthetic value of the country but will also support, in terms of species conservation and diversification, employment generation and earnings through export. Situation Analysis Increasing productivity of agriculture through diversification and increased market access to raise the living standards of the rural people is a growing concern in Bhutan. Encouraging floriculture could be one of the ways to diversify agriculture as floriculture in most parts of the world is a thriving and dynamic part of production agriculture. It can be characterized as a sector experiencing rapid changes. In Bhutan, the idea of floriculture as an industry has just begun and a few nurseries have sprung up in Thimphu and Phuentsholing. Floriculture, as an industry, is yet to take off but considering the favourable climate and the abundance of native and rare flowers, it can be assumed without doubt that floriculture in Bhutan can be viewed as a high growth industry. Commercial floriculture can become important from the export angle. However, the government intervention in this area thus far has been gray and neither strategies nor developmental plans have been drawn up to initiate floriculture as an industry. There exist also no specific regulations or Acts covering this industry, though certain regulations do apply to imports. No quarantine requirements have been developed for export. With regards to research and development of the industry, no priority has been accorded to the industry though one researcher has been stationed at RNR-RC Yusipang. Annual planning workshops on horticulture are held every year, but floriculture, as a subject, is yet to gain any attention. Market perspectives All over the world, the floricultural sector is experiencing rapid changes. With globalization (WTO) and its effect on income development in the different regions of the world, there is a growing per capita consumption in most countries. At the same time competition is increasing.
The world export market for flowers is valued at US$10 billion per annum and is growing at 6% - 9% each year. The Netherlands is the world’s largest exporter of flowers, accounting for 60% of international trade. The most important flower traded in the international market is still the Rose. However, other flowers like Chrysanthemum, Carnation, Gerbera, Dahlia, Poinsettia, Orchids, Lily, etc. are also marketed in large quantities in the major markets of the world. b. Regional market In the region, India is the largest flower market. The domestic market value for cut flowers in India stands at about Rs. 300 crore and its export value is about Rs. 100 crore. Cut flowers still dominate the world as well as regional markets and rose is the most traded flower.
The coming up of few nurseries clearly indicates that there does exist a domestic market for floriculture in Bhutan. More and more people are getting interested in setting up gardens and decorating the interiors of their houses to give a green touch. Besides the local nurseries, consumers often bring in ornamental plants from the neighbouring town of Jaigaon and there are also instances of people importing flowers all the way from Bangkok. The use of cut flowers and ornamental plants has also gained a place in landscaping and interior decorations during government functions, weddings and promotions. Though the value of flowers in the domestic market is not known, it can be assumed that there is a growing demand for flowers in the country. Floriculture potential of Bhutan The diverse agro-ecological conditions in Bhutan make the country suitable for the cultivation of a wide variety of flowers, which have market potential. Some of the flowers that can be promoted and cultivated for export are listed in the following table.
The prospects for some of the important group of floriculture products in the order of market potentials and importance are as mentioned below: Flower seeds: Seasonal flowers are in demand all over the world and the climatic conditions do favour seed production in Bhutan. Micro-propagation could be a useful technique in large-scale production of flower seeds/seedlings and as we do not have expertise in micro-propagation, collaboration with international renowned institutes/ companies should be encouraged. Some of the promising planting materials for export would be gladioli, liliums, tulips, liatris, etc. and even blue poppy. Dried flowers and plants: The most promising area in floriculture is in dried flowers. Dried flower technology is still an unknown art. In the world flower industry, cut flower business, dried flower technology and rare pot plants are the driving force, and it is growing each day. The export value of dried flowers from India is about Rs 100 crore per year. Dried flower and plants are popular due to the non-perishability of the produce and are in high demand in the US and UK markets. All kinds of flowers and plants can be dried and preserved in various forms. This is one area that Bhutan should focus on as wild flowers are bountiful and materials can be collected from the natural forests, dried and marketed. Higher income can be generated through value added products like potpourris, collages, cards, decorations, etc. There may not be domestic market for dried flowers and plants but there definitely is market for such produce in Japan, Germany, USA, Netherlands, UK and Italy. Floral extracts: There is a growing demand for natural extracts in the world market. Though a wide range of synthetic aroma chemicals and reconstituted essential oils are available in the market, the demand is more for the expensive natural products. Floral extracts could also pave its way in the domestic market with bigger hotels and spas catering to tourists. Bhutan could be made known for the use of natural extracts in the spas that are to come up in the future. Another area for floral extracts is the cultivation of saffron which is widely used as a food colouring agent and aromatic plant in India and most countries in Asia. This is a low volume high value flower. Other floriculture related services: With the Bhutanese society already developing a taste for flowers, as is evident from the imports from Thailand and India, there could be a new dimension to the use of ornamental plants in Bhutan. Hiring out and rental for interior decoration of homes and offices especially during promotions, weddings, banquets and other governmental functions could create a good domestic market. Ornamental trees: Christmas celebration is becoming an important festival even in non-Christian countries and the demand for Christmas trees is on the increase. There should be a large population of high and middle income Christians in Kolkata and it would be worth investing in Christmas trees as such tree species are fast growing. Ornamental plants: refer mostly to potted plants used for a “touch of green” in places where they have little or no open space for gardening. The plants used as ornaments are foliage plants or green plants where the leaves provide the decorative value. Cultivars of ficus, dracaena, dieffenbachia, aglanomea, philodendron, monstera, calathea, cordyline, aralia, etc. are the popular ornamental plants. Cut flowers: The modern day cut flowers refer to the stem used for decoration purposes in arrangements, bouquets, etc. Bhutan, at the present moment, may not be able to compete with other countries but can make a small beginning. With increasing incomes, one has noticed a definite change in consumer behaviour in the country. The small florists in Thimphu say that there is a growing demand for flowers and definitely a scope for a thriving domestic market. Laying of khadar as a wreath is an age old tradition in Bhutan and there can definitely be a paradigm shift from the “khadar” culture to a flower culture. Enabling conditions
Challenges Despite a bright future in floriculture, there are a number of challenges which, if not addressed, can hinder the promotion of a floriculture industry in the country. Some of the challenges that the country faces are:
Strategies for the establishment of a Floriculture Industry Floriculture can be expected to thrive in Bhutan and be one of the major important export commodities. Besides the international and regional markets, there is also a growing demand for flowers and other decorative plants in the domestic market with increase in income and change in taste. Bhutan too can take active part as a supplier of flowers through active participation in the world market. The cost benefit analysis for a small-scale floriculture with one green house shows positive cash benefits from the second year onwards and with increasing net profit cash ratio from the second year onwards. This is, however, based on the assumption that our growers have the required skills and technology. In order to generate such profits and overcome the constraints in the setting up and smooth functioning of floriculture industry, the following strategies would have to be followed to begin with: Floriculture promotion Floriculture can be promoted as a business enterprise and not necessarily connected to agriculture. When it comes to the actual promotion of floriculture, small, medium and commercial growers should be encouraged in parallel. Large scale or commercial growers should be encouraged amongst the business corporations, as it can be capital intensive. FDI must be invited to invest and work in collaboration with the large-scale growers. Encouraging FDI would assist in keeping up with the need for modern technologies, the skills required, post harvest technologies, infrastructure requirement and a ready market. However, the minimum investment required for FDI under the current FDI Policy is US$1 million and if FDI is to be invited for floriculture then this needs to be reviewed. The small and medium scale growers can serve as satellite farms for the large-scale growers to ease marketing, through a strong legal contract to ensure the smooth flow of business.
As floriculture is a new industry in the country, there would initially be plenty of hurdles especially in the form of technical skill and investment. The first and the foremost requirement would be developing an institutional set up that would be responsible for research, development and technological backstopping. Floriculture and landscaping can be instituted as a division under the DoA to carry out the research and developmental activities related to floriculture. Human Resource Development would be a key component. A subject matter specialist has to be put in place to coordinate the floriculture activities at the national level followed by lead researchers in each of the growing zones. Floriculture should be included in the curriculum and taught as a core subject in the Natural Resources College at Lobesa and should also be featured as an alternative course in the Rural Development Training Institute (RDTI) where school dropouts are trained in the field of agriculture and livestock. The existing School Agriculture Programme (SAP) should also incorporate floriculture as one of the sub-programmes to inculcate and develop a culture for flowers in the country. Government support would be needed for the establishment of modern floriculture demonstration plots at the existing RNR-RCs and Sub-centres. These plots can serve as the focal units for regional development of floriculture. This means that a floriculture programme should be established in each of the research centres and their mandate should be the transfer of technologies through on farm/on-station demonstration and training.
Floriculture can only be started with heavy investment in production infrastructure including green houses, net houses, good irrigation and drainage, post harvest infrastructure including pre-cooling and cold storage, and refrigerated vans. Upon investment on these, the turnover is not immediate as there is a gestation period and the risks involved are high. The government could consider some subsidy for investment in floriculture development. The existing tissue culture laboratories with DSC and RNR-RC Yusipang should be upgraded to support the floriculture industry. This would help in seedling production required by the growers while at the same time promote the efficient use of the laboratories. Another area for infrastructure development is the establishment of flower gardens showcasing both endemic and exotic flower and ornamental tree species. Such a venture would create a flower consumption culture and thereby lead to a domestic market in the country. With the country promoting tourism, these gardens could also be a tourist attraction. The gardens should have controlled atmosphere growing conditions such as glass and poly houses to have flowers and foliage throughout the year. Such activities should be taken up by the Department of Tourism (DoT) in collaboration with City Corporation and Ministry of Agriculture.
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