FLORICULTURE-WORLD WIDE PRODUCTION, TRADE, CONSUMPTION PATTERN, MARKET OPPORTUNITIES AND CHALLENGES
Amita Abrol and HS Baweja
Abstract
Floriculture is a specialized branch of horticulture which deals with commercial production of cut flowers, loose flowers, cut greens, seeds, bulbs, landscape plants, their marketing and production of value added products from them. The production of floricultural products has grown quite consistently over the last 20 years with an average yearly growth of 6 to 9%. Top ten major flower producing countries in the world during 2018 are The Netherland (52%), Columbia (15%), Ecuador (9%), Kenya (7%), Belgium (3%), Ethiopia (2%), Malaysia, Italy, Germany, Israel (1%) of global market share. According to Interactive System Productivity Facility, 2017, among continents Asia has maximum area under floriculture i.e. 7,39,125 ha but the production value is maximum in Europe i.e. 11,191 euro millions. Total area and production value under bulbous crops is maximum is in The Netherlands i.e 20,577 ha and 570 euro millions, respectively. Europe, the trade center of world floriculture shares about 77% of the global market. The consumption per capita has increased strongly over the years. Largest international flower market is situated at Aalsmeer in The Netherlands. FloraHolland and Bloemenveiling Aalsmeer, two largest companies of The Netherlands have joined hand together w.e.f. 1st January, 2008 and are working under the name of FloraHolland, the Netherland. The floriculture gained a great deal of commercialization rather than subsisting farming on account of varied agro climatic zones and specific production technologies. The international trade of ornamental products has increased, following the development in consumption also increases. All in all, competition in the world flower industry looks likely to become more intense. Rapid innovation is a promising avenue for high-cost growers, to stay competitive in the world’s floriculture market.
Keywords: Floriculture, Production, Trade, Consumption, Marketing
INTRODUCTION
Floriculture is a specialized branch of horticulture which deals with commercial production of cut flowers, loose flowers, cut greens, seeds, bulbs and landscape plants, their marketing and value added products from them. Beauty, purity, love and passion — symbolized by the flowers e.g. lily conveys purity, rose love, pansy thoughts and narcissus egotism. The feelings of love, affection and joy are conveyed effectively with these non-speaking beauties of nature, for example a lily conveys purity, rose love, pansy thoughts and narcissus egotism. Flowers have a definite role to play at almost all occasions of human affairs like birth, marriage, worship, adornments and death. Besides flowers, other ornamental plants also play an important role in environmental planning of urban and rural areas and from wasteland development to overcoming pollution. An important aspect of floriculture is that it is a good avenue to generate gainful employment for youth and women of peri-urban and rural areas (Chawla et al., 2016). Floriculture is a dynamic, global, fast-growing industry characterized by important changes in the distribution network (Rikken, 2010). Floricultural production contains a wide variety of different types of plants and plant materials. It comprise of commercial production of cut flowers, loose flowers, cut greens, seeds, bulbs and landscape plants, their marketing and production of value added products from them. The production of floricultural products has grown quite consistently over the last 20 years. Based on Dutch and American articles the production was estimated 11 billion dollars in 1985 growing to 44 billion dollars in 2000. This means an average yearly growth of 6 to 9 % (Van Uffelen and Groot, 2010).
COMPONENTS OF FLORICULTURE INDUSTRY
Cut flower cultivation: Cut flowers like rose, gerbera, tuberose, gladiolus, chrysanthemum, etc. are very popular and widely cultivated in the country. Paschimbanga, Karnataka, Maharashtra, Andhra Pradesh, Orissa, Uttar Pradesh and Gujarat are the leading cut flower producing states.
Loose flower cultivation: Loose flowers include many traditional flowers like marigold, china aster, jasmine, crossandra, barleria, etc. occupy major flower cultivated area of the country as the domestic consumption is very high. Andhra Pradesh, Tamil Nadu and Karnataka are the leading loose flower producing states.
Protected cultivation: Area under protected cultivation has been expanded in recent years from 500 ha to around 5000 ha. Major flowers cultivated are rose, gerbera, carnation, etc. under polyhouse mainly in Maharashtra, Karnataka, Uttrakhand and Gujarat. Orchids and Anthurium are grown under net house or polyhouse in Sikkim, Arunachal Pradesh, Goa and Kerala.
High value flower crops: High value flowers like Asiatic ginger lily, protea, heliconia, orchids, bird of paradise, etc. are being cultivated in comparatively smaller area but these fetch higher returns per unit area owing to high flower value. Such high value flowers are being cultivated in southern states of our country.
Essential oils and flower perfumes: Flowers like rose, jasmine, tuberose, etc. are generally known to rich in essential oils. Rosa damscena is exclusively cultivated for extraction of essential oils, rose water, attar, gulkand, etc. in Haldighati (Rajasthan) and some parts of Kanaouj (UP) and Himalchal Pradesh.
Flower seeds and bulbs production: Production of seasonal flower seeds for all three seasons is also a highly lucrative business which is well established in Punjab and Karnataka. Bulbs, corms and tubers production of plants increased as the demand of people is increasing. Hybrid seed production is money making business which ultimately helps in quality flower production.
Landscape gardening: This includes landscape consultancy, landscape planning and designing, establishment and maintenance contracts, etc. This is highly money spinner business owing to the growing industries, population along with general eco-friendly awareness and need for green view. There is regular demand for systematic avenue plantation, traffic island landscaping, landscaping of public places and societies.
Allied-industries associated with floriculture: Allied-industries associated with floriculture like green house construction and installation, shade net manufacturing, grading- packaging machines, etc. have come up and flourishing well owing to high demand with the expanding area under protected cultivation.
Nursery: Ornamental plant nursery is today’s lucrative business where we have a wide range of nurseries based on whole sale or retail, indoor/shade loving plants, tissue culture plants, commercial flowering plants, shrubs, climbers and tree seedlings for landscaping, annual plants, bulbous flowers, etc. are flourishing well throughout the country. Besides, there is high demand of lawn species for landscaping as well as plant rental services in the nurseries.
Floristry: The technique of floristry consists of bouquet designing and making, flower arranging in western and eastern styles and decoration for stage shows, mandaps, vehicles, banquet halls, etc. for different occasions, shows, weddings, celebrations, etc. This is highly remunerative flower based business that fetches high returns in comparatively short period.
Value addition: Value addition of floriculture produce through drying or extracting of colour pigments and can add value to the tune of 30–100% to fresh flowers. Dry flowers contributes around 70 per cent revenue of total floriculture export. Unfortunately, very little importance has been given to this industry, which has tremendous export potential. Our country has 10 per cent share of the total global dry flower market. USA, UK, the Netherlands, Germany, Italy,etc are major export destinations for India. Lotus pods, popy seed heads, camellias, straw flower, statice, delphinium, lavender, dahlia, bell caps, African marigold, jute flowers, wood roses, etc. are major flowers that are air dried and used. For making dry flowers, flowers and plant parts are generally collected from wild sources. Tuticorn (Tamil Nadu) and Calcutta are major centres of dry flower industry in India. Natural dyes, colours and pot pourri are also value added products of flowers. Natural dyes make from marigold, hibiscus, Bixa, Butea monosperma, etc. are substitute for the synthetic colours which are harmful for human health.
PRODUCTION
According to Institute of Foreign Trade Services (IFTS), 2004 there are more than 90 countries which are active in world floriculture. A very conservative estimate of world floriculture products at $20 billion (Papademetriou and Dadlani, 1998). Three leading production countries are The Netherlands, US and Japan. In terms of areas under floriculture cultivation, China and India are dominant (Xia et al., 2006). The main floriculture products are: Germany cut flowers (45.3%), The Netherlands cut flowers (48.5%) and potted flowers (34.8%). In the US, bedding and garden plants (51.8%) and 15.7% cut flowers are produced; in China potted flowers (39.1%) and cut flowers (31.6%) are produced. While in Columbia cut flowers dominate at 99.3% (Xia et al., 2006). Cut flowers are thus the dominant products in world floriculture sale value. In 2001, fresh cut flowers shared 50.5% of the world trade value of floriculture, the top four crops are roses, chrysanthemums, carnations and lilies.
The Global production of floriculture products will continue to expand, especially in new producing countries in Asia, Africa and Latin America, and the productivity in these countries is expected to go up further. Traditional flower producing countries such as The Netherlands, Japan and the US continue to lead global production, working towards higher productivity per worker and per unit area. The trend in production of cut flowers which is very labour-intensive, will tend to be located in areas with lower labour and other production costs (Xia et al., 2006).
PRODUCTION AREAS
Europe
Mostly ornamentals are produced. The Netherlands is known for cut flowers and potted plants, as well as bulbs, for annuals and perennials. Germany has a name in nursery stock and garden plants. In Italy lots of flowers and potted plants are produced. While Denmark is famous of their potted plants. France is a broad player when it comes to the different types of products. UK, Belgium and Spain are small players in this field. The total production value is about 10 billion dollars, and has stabilized. Countries with the largest share in cut flower production are Germany (11%), Italy (18%) and the Netherlands (35%) (Uffelen and Groot, 2010).
North and South America
Ornamental production mainly consist of flowers and cuttings. In North America (USA and Canada), 80% of the flowers and potted plants are grown; California and Florida are the most important production regions. In South America, Colombia (6%) and Mexico (3%) together with Costa Rica and Ecuador have developed rapidly over the last decade as producers of flowers and parental material. Also Brazil (6%), for a long time, has been a producer of parental material and cuttings of potted plants (Uffelen and Groot, 2010).
Africa
Production in Africa has increased over the last decade, with Kenya in the frontline followed by Tanzania, South Africa and Uganda. Flower production of roses in particular has made enormous progress. Production in countries like Zimbabwe and Ivory Coast has decreased because of the political situation in the country. In Africa rapid growth occur with an estimate of 0.2 billion dollar production of ornamental (Uffelen and Groot, 2010).
Asia/ Middle East
Japan is traditionally a producer of ornamentals. South Korea, India and Thailand are coming up strongly as producers of ornamentals, followed by Taiwan. Export is starting from countries like China, Vietnam, India, etc The production of cut flowers in Israel has decreased because of the political situation. Local production for local markets seems to be big (Uffelen and Groot, 2010).
Most flower-producing countries can be divided into the following four groups
Group : Includes countries such as the US, Japan, India and China, which are largely self-sufficient and mainly produce for domestic markets. Almost 95% of demand in the Japanese market is met by local producers, 98% in China and 85% in the US. However, per capita and overall consumption are expected to increase in these countries.
Group 2: Countries which have sizeable markets where imports satisfy most demand, such as Germany in which imports making up 70% of total demand.
Group 3: Having a small home market but a large volume of exports such as Colombia and Kenya. Colombia exports about 95% of the floriculture production.
Group 4: Large home market combined with a large import and export share such as the Netherlands according to Certified Management Accountant, 2005.
Table 1: Top 10 major flower producing countries along with global market share in 2018
1 The Netherland-52%
2 Columbia-15%
3 Ecuador-9%
4 Kenya-7%
5 Belgium-3%
6 Ethiopia-2%
7 Malaysia-1%
8 Italy-1%
9 Germany-1%
10 Israel-1% (Khan, 2018)
World Trade
The value of world import and export are increasing every year. The total value was about $2.5 billion in 1982 and $7.5 billion in 1996 (de Groot, 1999). Seven countries exported 72.5% of the world’s floriculture products: The Netherlands (50%), Columbia (7.5%), Italy (3%), Belgium (3%), Denmark (3%), The US (3%), and Ecuador (3%) (British Colombia Ministry of Agricultural, Food and Fisheries (BCMAFF), 2003). The 2001 import statistics reported to the United Nations (UN) from more than 95 countries show world trade value in dollars of floriculture was $7.9 billion. Cut flowers accounted for about 50.5% of sales value, live plants for 40.7%, and cut foliage for 8.8%. Eight countries imported 72.7% of the world floriculture products: Germany (17.6%), US (14.5%), France (11.2%), The Netherlands (11.0%), The UK (7.8%), Switzerland (4.1%), Italy (4.1%) and Japan (2.5%) (Institute of Foreign Trade Services (IFTS), 2004). Europe, which shares 77% of the market, is the trade center of world floriculture (Xia et al., 2006).
African countries, with an increasing share coming from Kenya, Zimbabwe, and Tanzania, mainly export to European markets. The second export region is South and North America. The US and Canada will be increasingly supplied by South American countries, especially Colombia and Ecuador. Asia-Pacific countries are the main suppliers to Japan (Asia’s main market), and although they have the largest area for floriculture production globally. With the development of economy, population and urbanization, the world floriculture industry has improved significantly. The number of countries entering floriculture production and market are still growing (Xia et al., 2006).
Globally, the export of flowers has increased phenomenally from 8 billion US dollar in 2006 to 13 billion US dollar in 2015. The number of countries reported to have exported flowers in 2006 was 50 which has increased to 118 in the year 2015.The Compound Annual Growth Rate (CAGR) of World’s flower export during 2006–2015 is 5 percent. The Netherland is an important producer for cut flowers (54% in Global Market of Production), as well as a key importer from developing countries. Besides being one of the market leaders for cut flowers, the Netherlands are also a main trade hub, especially in the area of Aalsmeer. Every year roughly 1,200 to 1,500 new flowers and plants are bred and cultivated by growers. New types of cut flowers contributed massively to the flower industry. The leading export markets for Dutch floriculture are European, with Germany, UK and France among the top three countries importing flowers from the Netherlands. USA are emerging as leading flower importers (22%) in World (Vahoniya et al, 2018).
INTERNATIONAL EXPORT POTENTIAL
Dutch Rose is primarily being exported from India. Main export destinations are European countries & USA and U.K. International trade for cut flower was estimated to be US$ 2.78 billion1. Bangalore is considered export hub with many export-oriented units in the nearby regions. The major importing countries of cut flowers are Netherlands, USA, Germany, France, UK, Switzerland, Italy and Japan. The five flowers namely Rose, Chrysanthemum, Carnation, Tulip and Lily account for 70–75 per cent of the world trade. India has exported 22,086.1MT of flowers worth of Rs.548.74 crore in 2016–2017. Netherland Exported Maximum in value and Germany imported maximum in value in year 2017 (www.trademap.org). USA and United Kingdom are two best destination of India in floriculture (www.apeda.gov.in)
TRADE PATTERNS
CUT FLOWERS
Europe
By far its the largest market for cut flowers. An export value from Europe is 2660 million US dollar. Imports from main suppliers like South America (228 million. USD), Africa (196 USD), Asia (174 million USD) and North America (65 million USD). The export in and outside totals about 3425 million USD.
North America
North America is the second largest market. USA and Canada have an export to each other of about 108 million USD. The continent imports large amounts of cut flowers from the countries in South America (859 million USD). Europe is with 141 million USD the second supplier, followed by Asia with 26 million dollar export value on cut flowers. The export in and outside totals up to 1100 million USD.
Asia
Asia shows an internal export between countries of about 94million USD. This is added by export of cut flowers of 53 million USD out of European countries, 22 million USD out of Oceania and 15 million USD out of South America. This adds up to 184 million USD in totality.
Africa
They import cut flowers out of other continents or in between its countries (Van Uffelen and Groot, 2010).
POTTED PLANTS
Europe
Europe has an internal export between its countries with a value of 3013 million US dollar. In addition Europe imports from Asia for about 47 million USD. This is followed by imports with a value of 42 million USD from Africa and 39 USD from South America. In perspective of potted plants, this mostly concerns propagation material and cuttings for production in Europe. This totals 3140 USD value of imported product for Europe.
North America
The internal export between USA and Canada is 329 million USD. This market imports from Europe mostly end product with a value of 54 million USD.
South America
South America is a main supplier with 47 million USD of products; propagation material as well as potted plants for the markets.
Asia
Asia shows an internal export of ‘potted plants’ between countries of about 52 million USD. This is added by export of potted plant of 76 million USD out of European countries.
Africa
They import potted plants out of other continents or in between its countries (Van Uffelen and Groot, 2010)
Flower trade in the world in 2017 (Export)
Total Value Flower trade in the world: 7,465 euro millions/ 597200 millions Rs
• Cut flowers: 2,738 euro millions/ 219040 million Rs
• Pot plants: 1,554 euro millions/ 124320 million Rs
• Garden plants: 1,319 euro millions/ 105520 million Rs
• Bulbs: 1,854 euro millions/ 148320 million Rs
(FloraHolland Facts and Figures, 2017)
FLOWER SEED INDUSTRY
The origin of flower seed industry in the USA can be traced back to 1784 when the David Landreth Company opened a retail store in Philadelphia, Pennsylvania. It was the 1st store which offered seeds of flower to consumers.
World seed business of ornamental seeds — $ 1.0 billion. World seed consumption — $ 50 billion. The Netherlands — leading exporter of nursery stock — 85% share. Major importers of nursey stocks — Germany & U.S. India exports nursery stock & flower seed — worth of 2 million USD
World cut-green trade
Cut-green trade in the world:
Export — 1,232 million US $
Import- 1,173 million US $
The Netherlands is the largest exporter (33%) as well as the largest importer of cut greens (19%) in the world.(Eurostat, 2016).
DRY FLOWER INDUSTRY
Most promising area in floriculture is the dry flower industry. Dry flowers have good demand both in Indian and international markets. India is one of the leading countries in this field. Export of dried flowers from India is worth Rs 252.26 crore. Exports 500 varieties of flowers to 20 countries (APEDA, 2017).
Components of Dry Flower Industry
· Handmade paper Greeting cards
· Pomander
· Flower wreaths
· Wall hangings
· Flower arrangements
· Book holder
· Pot pourries etc.
The flower arrangements including dried samples of cone, foliage, bulb rushes, flowers like rose buds, lilies and plant material enhances the beauty of dry flowers, adding more export value to the floriculture industry.
EXPORT OF DRY FLOWERS
• The Netherlands (51.20 %)
• Israel (14.20 %)
• Nigeria (5.60 %)
• India (4.80 %)
IMPORT OF DRY FLOWERS
The UK is the largest importer of dry flowers accounting for 65 million US$ import, amounting to 40.7% of the total, followed by France and Japan (UNComtrade, 2015–16). Major import destinations of dry flowers from India are USA, The Netherlands, UK, Germany and United Arab (APEDA, 2017).
NATURAL DYE INDUSTRY
Herbal dyes being natural tend to be softer and their range of tones are very pleasant. At present total market of herbal dyes are about US $ 1 billion and is growing tremendously @ of 12% per annum. Per capita consumption of dyes is 400g to 5 kg in developed and underdeveloped countries for their utility in paints, inks, textiles, polymers, etc. Nature has gifted more than 500 colour yielding plants (Gokhale et al., 2015).
FLOWER PIGMENTS
· Anthocyanins — red, purple, and blue colors; water soluble.
· Flavones — pale yellow colors; water soluble.
· Carotenes — yellow, orange, and red colors; oil or fat soluble.
The inter and intracontinental trade of ornamentals
Europe- the largest trade-activity with 3,425 million USD and 3,140 million USD for cut flowers and potted plants respectively. North America- second with about 1100 million USD imports of cut flowers and 440 million USD for potted plants. Asia comes in third place followed by South America. If the world wide trade of cut flowers is compared with that of potted plants it becomes visible that streams of cut flowers are much bigger. An import reason is that potted plants are heavier per volume and therefore more expensive to transport. In export for potted or ornamental plants, an amount of propagation material like tissue culture plants and cuttings are involved.
Incentives for growing International trade
Information technology that computers will manage the production process. The introduction of RFID-tags (Radio Frequency Identification Devices) and micro sensors- tracking and tracing of products throughout the chain. The development of communication technology, with web-based applications all kind of stakeholders of the product chain can access.
Developments in packing and transporting
Packaging: Modified Atmosphere can slow down the process of deterioration of products. The product can be transported for longer period of time and have good quality.
Transport: Stimulated with a ship. This will increase possibilities of sending orders by ship instead of by plane, which makes transportation a lot cheaper.
International economic integration
There are different economic trends which will have their effect on the trade in fresh produce. Countries more and more unite themselves in trade unions and these unions are getting more powerful.
Different examples are:
• The European union existed out of 15 countries. May first 2004, another 10 Eastern European countries joined.
• ASEAN, a same kind of integration developed in Asia.
• The USA, Canada and Mexico have there NAFTA-treaty (North American Free Trade). Trade within these unions is getting easier and cheaper by decreased regulations and trade barriers.
• The activities of the World Trade Organisation (WTO-rounds) globally breaking down all kind of trade barriers. This means market is more mechanized.
(Van Uffelen and Groot, 2010)
CONSUMPTION PATTERN
The consumption per capita has increased strongly over the years. Because of a growing income people have started to buy more ornamentals for personal use as well as the gifts. Also the institutional use has risen; companies, events and recreation has started to use more flowers and plants for attractive decoration. In Europe and USA, small households occur of one or two persons, with a higher than average salary. So the amount of homes to be decorated per capita is rising. People in Europe and USA especially have started to spend more time at home, to get a feeling of peace and safety. Doing so they started to make the home cosier, with decorations like ornamentals. The trend of individualisation results in that people want to show their own life style. They also use ornamentals to do so. Finally there is a demand for quality products has grown.
In Europe there is also a trend in bringing nature back in the daily life, by using natural products. All these developments have contributed to a growth in the consumption of products per capita (Van Uffelen and Groot, 2010). The three most important floriculture consumption regions were Europe (66.7%), the US (19.3%) and Japan (10.7%). At floriculture consumption, the US was the biggest consumer at $6.99 billion, sharing 19.3% of the world total value. Germany was second largest (18.8%), followed by Japan (10.7%), France (8.5%), United Kingdom (UK, 8.5%), Italy (6.8%), the Netherlands (4.1%), Spain (4.1%), Switzerland (2.6%), and Poland (2.6%). These ten countries shared 85% of the world total floriculture consumption. On a per capita basis, floriculture consumption varies greatly in different countries. European countries in general have a higher consumption per capita. The value was: Switzerland ($136), Norway ($114), the Netherlands ($93), Denmark ($83), Germany ($83), Austria ($78), Sweden ($77), Belgium ($69). Outside Europe, Japan ($31) and the US ($51) have relatively lower consumption per capita. The total world cut flower market was about $23.1 billion. The world floriculture market is experiencing increasingly global competition. A number of traditional markets are showing signs of saturation. While new countries are trying to get their place on the market. At the same time, with increased living standards, new markets will develop in some regions of the world such as Eastern Europe and Asia (Xia et al., 2006).
Latest trends in consumption
Despite the economic crisis, the Northern European countries are exhibiting stability. Due to the crisis, the consumption volumes are falling in the severely affected countries, e.g. Greece, Spain and Portugal. In the Eastern European member states, the markets are developing positively once again with a rising demand. The BRIC-countries i.e. Brazil, Russia, India and China are gaining importance (Wageningenur, 2016).
MARKET DEVELOPMENT
People from all over the world use floricultural products for culture and traditions. In the more prosperous countries they are also used to express themselves with their life style. Furthermore businesses and organisations also use these products for decorations to create a certain atmosphere contributing to their image.
In Europe, USA and in the big cities all over the world there are local florists selling ornamentals and decorations. Adapting of development to form chains, i.e. in Holland a Business Florist Association was established for the business segment. Then floricultural products can be bought at local garden centres and warehouses. Furthermore in Europe more and more floricultural products are sold in supermarkets. In the U.K. for instance, the main part of flowers and potted plants are sold (Van Uffelen and Groot, 2010).
Local florists and garden centres may buy their product at the auction directly or at the cash. In Germany, France and England product can also be acquired at wholesale markets. The chains of florists, garden centres, warehouse and supermarkets have their supplier. It concerns with large quantities. More and more these supermarket chains have, lead by the choices consumers make, a clear market position in either the discount segment or service retailing with added value product.
Because of fast growth of these chains, their economies of scale increase and than price battles are the result. The supply chain therefore is forced to further reduce costs. Ornamentals in supermarkets i.e. in the U.K, France, Germany etc. occur under private label. Supermarkets use to make money, fresh product requires professional approach.
The wholesalers / traders specialise, professionalize and grow rapidly, to be of sufficient scale for their clients. They operate as a logistical service provider to their clients to met their demand. The marketing departments of these wholesalers develop new product concepts with their chain partners (Van Uffelen and Groot, 2010).
Global Trend in Marketing
Socio-economic status of people is increasing day by day rapidly at global level where per capita flower consumption also has a positive correlation with it. This has given promotion to the floriculture industry and to the development of new production centers in Asia and Africa which were earlier concentrated in Europe and USA. In Asia, India, China and Thailand are emerging leading countries with respect to floriculture. In last 20 years, Indian flora industry stepped into international market and the area under flower cultivation has been expanding continuously. International floriculture trade is US$ 17 billion, which is increasing 10–15 % annually and is expected to reach US$ 25 billion by 2025 (Reddy et al., 2007).
MARKET CONDUCT AND PERFORMANCE
· Market conduct refers to the pattern of behaviour of firms (participants) in relation to pricing and practices in adjusting and adapting to the market in which they function.
· Market performance refers to the end result which flow from the structure and its conduct.
A list of suitable criterion for defining an adequate cut flower market included:-
• Pricing practices which encouraged picking, pre-cooling, pulsing, grading, packing, transport, storage and market intelligence etc.
• Policies which encouraged quality of product.
- Pricing practices free of collusion and unfair or exclusionary tactics as well as black marketing (Singh P, 2017).
- FLORAHOLLAND
- Largest international flower market is situated at Aalsmeer in The Netherlands. FloraHolland and Bloemenveiling Aalsmeer, two largest companies of The Netherlands have joined hand together w.e.f. 1st January, 2008 and are working under the name of FloraHolland, the Netherlands.Total area in Aalsmeer is around 100 ha (1 million m²).
- FACTS ABOUT FLORAHOLLAND
- • Over 20,000 varieties are auctioned daily.
- • Has over 5200 owned members.
- • Daily over 9000 growers across the globe sent their flower material to this cooperative.
- • Has over 4500 employees.
- • Total turnover of the company is over 4 billion Euros annually.
- • Each day over 19 million cut flowers and 2 million plants are sold.
- Supply chain management
- The product, from all over the world solely used to be sold at the auction to all kind of buyers, more and more product is sold directly to supermarkets and specialised wholesalers. The trend is that supermarkets, garden centres and warehouses want to be sure the products are produced in a sustainable way. This is called production in the triple P-concept;
- Profit: A way of producing combining making money. The word Profit contains items like assets, return on investment, partnerships, mergers etc.
- Planet: With care for the environment. Planet refers to entities as soil, air, water and the effects of the use of fertilizer, chemicals for pest control, use of energy and the amount of waste.
- People: A social responsible way. People requires that attention is paid to human rights, poverty, workers, health and security (Van Uffelen and Groot, 2010).
- Important aspects of the flower supply chain
- • Disease free propagation material
- • High level crop management
- • Grading according to international standards
- • Independent quality inspection
- • Flexible marketing system
- • Climate controlled storage and transport(www.floraholland.com)
OPPORTUNITIES
• Europe offers opportunities by growth in high quality product with added value.
• The Japanese market will show growth. Besides very high quality products a niche market for a reasonable price/quality ratio is developing.
• Producers and traders have to focus on high quality product.
• USA offers the most possibilities when it comes to an increase of consumption.
• Availability of proper infrastructure.
• Availability of skilled manpower.
• Expanding domestic market rapidly.
• Awareness among farmers.
• Growing awareness for quality production in nurseries and development of several insentive tissue culture units.
• Constant research on hi-tech water and nutrition management in cut flowers in different research centres.
• Availability and adoptability of sophisticated irrigation systems and climate control systems.
CHALLENGES
• Africa offers the least opportunities; there is a lot of poverty and a lot of countries are politically unstable.
• Production in countries like Zimbabwe and Ivory Coast has decreased because of the political situation in the country.
• Inadequacy and high cost of air cargo flight.
• Lack of facilities for research and development.
• Big initial investment on farms.
• Lack of improved systems of marketing.
• Lack of information on plant protection measures.
STRATEGIES TO OVERCOME THE CHALLENGES
• Air-flight should be reduced to a reasonable level.
• Sufficient cargo space may be provided in airlines.
• Establishment of model nurseries for supplying genuine planting material.
• Co-operative florist organizations and joint venture should be established at regional level.
• Training centers for diploma course on the pattern of ITI for training the personnel in floriculture should be set up.
• Exporters should plan and monitor effective quality control measures right from production to post harvesting, storage, and transportation.
• Government Support
FUTURE STRATEGIES FOR BLOOMING FLORA INDUSTRY
• Evolving new high yielding varieties. This will prevent heavy royalty from imported varieties.
• Standardization of crop specific greenhouse cultivation practices.
• Cold-storage facility needs to be created at the air ports and railway stations along with cold-refrigerated vans and compartments for transportation via roadways and railways.
• Joint ventures should be established with the companies in other countries for exchange to technology.
• Direct cargo flights from production centers to auction or destination centers should be arranged for fresh delivery of produce as flowers being highly perishable commodity.
• Sanitary and Phyto-sanitary measures are to be adopted while dealing with exports.
• Traditional flowers should be popularized.
• Awareness should be created for popularizing flower cultivation through seminars, demonstrations, flowers shows and exhibitions.
• Online information system of floriculture products in which growers can participate in the online auction at national and international level needs to be developed.
CONCLUSION
The floriculture gained a great deal of commercialization rather than subsisting farming on account of varied agro climatic zones and specific production technologies. Worldwide the production has expanded. The countries where entrepreneurs see opportunities to enter markets combined with good growing conditions. The world’s cut flower industry is in a state of flux. New exporting countries (Ecuador, Kenya) emerging while countries like India, China, the Republic of Korea are pushing hard to become the next generation of successful emerging exporters. The international trade of ornamental products has increased, following the development in consumption of also increases. Worldwide consumption has grown in the countries where use of ornamentals could increase and the level of prosperity has risen. All in all, competition in the world flower industry looks likely to become more intense. Rapid innovation is a promising avenue for high-cost growers, to stay competitive in the world’s floriculture market.
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