STUDENTS' CORNER

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CBS LINE

Volume 3(11)

From farm gate to global plate: analyzing the potential for a sustainable fruit-based value chain in Kerala

The agricultural sector in Kerala is undergoing a major shift, marked by the rapid growth in exotic fruit cultivation, which is steadily replacing traditional crops like rubber for many farmers. Crops like Rambutan and are thriving due to the state's favourable agro-climatic conditions and the promise of higher income compared to existing crops. Rambutan, the most cultivated exotic fruit, alongside Mangosteen and others, is seen as highly profitable, with Rambutan fetching retail prices of Rs 200–300 per kg. This profitability is fueling a significant expansion in the cultivated area and to more farmers and geographic regions, a trend that is strongly supported by the optimistic attitude of both farmers and nursery owners. The high-value nature of these crops is driving discussions for their inclusion in the plantation sector through an amendment to the Kerala Land Reforms Act, which would incentivize even larger-scale production.

The success of Kerala's exotic fruit sector in the long term, however, rests on a strategic pivot toward value addition. The sheer increase in planting and overall production in recent years suggests that the market price for fresh fruit could decline in the near future, despite new local and global markets opening up. This potential price pressure is compounded by the fact that the discussions about adding these crops to the list of plantation crops could lead to an even more significant boost in output. Therefore, shifting focus to products like jams, juices, and dried fruits is critical for resilience and sustained profitability. These value-added products are a new set of products in the local market, offering enterprises the significant benefit of a first-mover advantage. Furthermore, there is a clear potential profit from exporting these items, especially when comparing the prices of value-added products available abroad. This strategic move is also becoming easier, as both central (e.g., PMFME Scheme) and state government policies and subsidy schemes these days are also supportive of value addition and food processing infrastructure.

Despite the high potential and supportive conditions, embracing a value-added strategy cannot be done impulsively. It is vital to recognize that, though all these favourable factors are present, proper research should be done before moving with a value addition opportunity. Before investing in processing units, entrepreneurs need to conduct thorough market research and competitive analysis to accurately gauge consumer demand for specific processed exotic fruit products, refine product concepts (e.g., flavour, packaging), and develop an effective go-to-market strategy. This essential background study reduces the risk of product failure and ensures that the financial and technical assistance provided by the government is utilized effectively for sustainable and profitable ventures, thereby realizing the full economic potential of Kerala's emerging exotic fruit sector.


Narayanan

Calicut University Campus


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