CONTENTS Chapter 1: Introduction 1 Project Background 2 Objectives 2 Scope of Work 2 Approach and Methodology 3 Significance of Value Chain Analysis Study 5 Chapter 2: The North East Region: An Overview 7 Strategic Location 7 Topography and Agro-Climatic Characteristics 7 Connectivity/Logistics 7 Demographic and Socioeconomic Characteristics 8 Agriculture 10 Swot Analysis of Agribusiness Scenario in North East Region 11 Chapter 3: Horticulture Scenario in North East Region 13 State-wise Profile 15 Arunachal Pradesh 15 Assam 19 Manipur 23 Meghalaya 26 Mizoram 30 Nagaland 33 Sikkim 37 Tripura 41 Chapter 4: Identification of Focus Crop Groups 45 Product-wise Contribution of States in NER Production Basket (2010-11) 46 Product-wise Contribution of States in NER Production Value (2010-11) 47 Identified Focus Crop Groups Based on the Parameters Identified for Selection Criteria 49 Identified Production Clusters of FCGs 50 Seasonality of Selected FCGs 51 Chapter 5: Value Chain Analysis 53 Pineapple 53 Assam 54 Tripura 56 Meghalaya 59 Nagaland 60 Citrus 64 Assam 64 Manipur 69 Meghalaya 71 Sikkim 73 iv Value Chain Analysis of Select Crops in North Eastern States Ginger 75 Assam 75 Meghalaya 77 Sikkim 79 Turmeric 81 Assam 81 Meghalaya 82 Mizoram 84 Naga Chilli 86 Nagaland 86 Passion Fruit 87 Nagaland 88 Kiwi Fruit 89 Arunachal Pradesh 90 Large Cardamom 92 Sikkim 92 Vegetables 93 Assam 94 Meghalaya 103 Conclusion 107 Chapter 6: Benchmarking with Existing Best Practices 109 Pineapple 109 Mandarin 110 Ginger 111 Turmeric 111 Chapter 7: Conclusion & Recommendations 113 Land Tenure and Ownership System 113 Poor Cultivation Practices and Low Productivity 113 Poor and Weak Extension System 114 Poor Logistics and Connectivity 114 Poor Marketing and Post-Harvest Infrastructure 115 Lack of Processing Industries 115 Recommendations 116 Pineapple 116 Citrus 118 Ginger 120 Turmeric 122 Vegetables 123 Naga Chilli 124 Passion Fruit 124 Kiwi Fruit 125 Large Cardamom 125 Annexure 1 126 Annexure 2 133 Literature Reviewed 163 LIST OF ABBREVIATIONS AGMARKNET Agricultural Marketing Information Network APMC Agricultural Produce Marketing Committee FCGs Focus Crop Groups FGDs Focussed Group Discussions GDP Gross Domestic Product ha Hectares ISAP Indian Society of Agribusiness Professionals KVK Krishi Vigyan Kendra MAPs Medicinal & Aromatic Plants MoDoNER Ministry of Development of North Eastern Region MSL Mean Sea Level MT Metric Tonnes NE North East NEC North Eastern Council NEDFi North Eastern Development Finance Corporation Ltd. NER North Eastern Region NERAMAC North Eastern Regional Agricultural Marketing Corporation Limited NHB National Horticulture Board SFAC Small Farmers’ Agribusiness Consortium VCA Value Chain Analysis PREFACE The North East region of India, comprising of the state Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim, is a reservoir of rich natural resources. All the North-Eastern States have distinct advantages, and provide immense economic and trade opportunities to domestic and international players. The NE region shares borders with China in the north, Bangladesh in the South-West, Bhutan in the North-West and Myanmar in the East. This makes the North-East a prospective hub of international trade and commerce. Unlike the rest of India, North East India has an added demographic advantage, in the sense that it occupies 7.8 percent of the country’s total land space but has a population of only 44 million, which makes it approximately 3.80 percent of the country’s population. Blessed with rich biodiversity, conducive agro climatic conditions, forest wealth, fruits and vegetables, flowers, herbs and aromatic plants, rare and rich flora and fauna, NE India has all the potential to transform into a commercial horticulture hub. The area is a vibrant source of varied horticultural crops, which can be linked to distant markets within the country as well as for export. Horticultural crops in the NE region cover 857 thousand ha, constituting 2.34% of the total horticulture area in the country. From the production point of view, NE region produces about 7815 thousand MT of horticulture produce and contributes 6.79% to the total production basket of the country. Major horticultural crops grown in the NE region include citrus, pineapple, kiwi, mango, guava, litchi, banana among fruits, potato, onion, tomato, cauliflower, cabbage, brinjal, beans among vegetables, chrysanthemum, rose, orchids etc. in flowers, ginger, turmeric large cardamom, coriander, cumin among spices and cashew nut, arecanut and tea among plantation crops. The productivity of many of the horticultural crops in entire NE region is much below the National level. This weakness of the region can be converted into an opportunity, and productivity and production levels can be increased significantly to enhance the total production at national level, to meet the ever-growing demand for horticulture produce. Since horticulture provides higher return per unit of land and generates higher employment, development of horticulture also helps in alleviating the economic condition of people below the poverty line. However, despite these distinct advantages, North-East horticulture has not grown at par with the rest of the country, and the region’s horticulture potential has not been tapped, mainly due to lack of market led production practices, poor commercial understanding of farmers, insufficient infrastructure at the farm level, poor transportation system, inadequate road network, lack of post harvest infrastructure like dedicated markets, pack houses, cold storages, sorting grading lines, processing industries etc. Due to the lack of adequate post harvest infrastructure in the region, not only are post harvest losses high, but dependency of farmers on intermediaries for marketing is very high. viii Value Chain Analysis of Select Crops in North Eastern States With significant initiatives taken by the Government of India to promote horticulture development in the North-East region, appropriate strategies like adoption of market- driven production system, enhancement of productivity, appropriate post-harvest handling through proper packaging, loading/unloading of commodities and promotion of pack house concept including collection centre in the production clusters, cold storage, processing and value addition, creation of adequate transportation infrastructure and organised marketing system are necessary additions to current interventions to provide remunerative prices to farmers. With necessary infrastructure development within the region, and the building of connecting links between North-East and the rest of India, and North-East and South-East Asia, the horticulture potential of the region can be suitably exploited. Time-bound implementation of projects, monitoring of fund–flows and necessary marketing and branding of the region can truly transform this goldmine region into a vibrant hub of horticulture business and trade. This value chain study by Small Farmers’ Agribusiness Consortium is an initiative to understand the working of the production and supply chain of major high value works in the NE region and recommend or strategy to achieve the goal of making the North-Eastern region a true horticulture hub, not only of India but of the entire South-East Asian region. 1 CHAPTER INTRODUCTION The North Eastern Region (NER) of India includes the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. The eight states share a number of attributes such as frontier locations, rich natural resources, variety in agro- climatic conditions and inherited potential of growing various types of crops. Out of a total geographical area of the region, 65% is under undulating tracks and hills and remaining 35% is plain. The North Eastern Region falls under the high rainfall zone and the climate ranges from tropical to alpine. The region is physiographically characterised by difficult terrain, wide variations in slopes and altitudes and traditionally indigenous cultivation practices. Agriculture constitutes of 26% of the total GDP of NER and is one of the major contributors to the economy of North Eastern States, engaging one-third of the total work force in the region. The eight contiguous states of undulating terrains cover a total geographical area of 2.62 lakh Sq Km, out of which the gross cultivable area is 65,500 Sq Km. Paddy and maize dominate the rain-fed hill ecosystem, however, in selected areas, horticulture is emerging as a primary source of income for the farmers due to conducive physiographic conditions of the region. Assam and Tripura are the major states producing fruits and vegetables, with Assam leading with a contribution of 60 percent to the total horticulture produce of NER. State-wise share of horticulture in NER is as follows: Figure 1: State-wise Contribution to Horticulture in NER Sikkim 2% Tripura 15% Nagaland 2% Mizoram 1% Meghalaya 9% Manipur 7% Assam 60% Arunachal Pradesh 4% Source: ISAP Analysis & NHB Data, 2011 2 Value Chain Analysis of Select Crops in North Eastern States Project Background North East Region is endowed with diverse agro-climatic conditions which are conducive for cultivation/production of varied horticultural crops. Though NER has the potential to achieve maximum productivity, but it has not been capitalised so far because of various factors In order to evolve a strategic module for the wholesome development of horticulture, there is a need to identify gaps, efficiency levels, inherited