` India's Agribusiness Experiment with Israel - Olive Oil Times

India's Agribusiness Experiment with Israel

Apr. 11, 2013
Probir Banerjee

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Olives are not a sta­ple crop in India. Yet farm­ers from Rajasthan, a desert state in the west­ern bor­der in India, are tak­ing a big leap to pro­duce olives with the help of Israeli agribusi­ness exper­tise. A gov­ern­ment and pri­vate part­ner­ship is aim­ing to change tra­di­tion as more than a 200-hectare yield from cur­rent har­vest makes India a pro­ducer of olives in the world.

The project ini­tially began when a joint ven­ture was formed between Indolive, an Israeli firm and the agri­cul­tural board that rep­re­sented Rajasthan. Later, in 2007, an Indian pri­vate com­pany, Finolex Plasson Industries Ltd got into the busi­ness part­ner­ship through its sub­sidiary Plastro Plasson. These par­ties related with the joint ven­ture are now known as part­ners of the Rajasthan Olive Cultivation Ltd (ROCL).

The inclu­sion of a pri­vate sec­tor com­pany in part­ner­ship has appealed well to the Israeli investor, as there are many com­plex­i­ties in get­ting engaged only with the Indian bureau­cracy. Meanwhile, as Plastro Plasson was already in drip irri­ga­tion busi­ness, they were con­sid­ered to be a per­fect fit for the project.

The ven­ture had orig­i­nally begun as an exper­i­ment, but it has now taken the shape of a sys­tem of orga­nized cul­ti­va­tion that has pres­ence in six regions in Rajasthan. However, it hasn’t always been a smooth ride for the ven­ture. Problems such as bot­tle­necks in resources to the scarcity of skilled labor and water short­ages in the dry west­ern desert have come up as great chal­lenges against ROCL’s plans.

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The Rajasthan gov­ern­ment has put in Rs. 15 mil­lion (about $270,000) toward share cap­i­tal. However, despite such a healthy invest­ment, projects like this are often put on the back burner by gov­ern­ments as they do not rep­re­sent main­stream eco­nomic activ­i­ties. Moreover, there are issues of train­ing peo­ple, cre­at­ing the cor­rect infra­struc­ture and there are report­edly many dif­fi­cul­ties in mon­i­tor­ing the olive crop.

Moreover, as gov­ern­ments see bet­ter returns through Information Technology and ser­vices, the agribusi­ness sec­tor has stiff com­pe­ti­tion for port­fo­lio invest­ments. A wor­ry­ing sta­tis­tic is that, accord­ing to World Bank data, the total share of agri­cul­ture in India’s GDP is about 21 per­cent while 72 per­cent peo­ple of total pop­u­la­tion reside in rural agrar­ian com­mu­ni­ties.

However, the farm­ers in Rajasthan are still inter­ested enough to get in on olive cul­ti­va­tion despite the crop’s lim­ited expo­sure in local mar­kets. In fact, many farm­ers are now will­ing to change their cul­ti­va­tion habits as the yields on many other major crops in Rajasthan are declin­ing. As most of the olive crop is meant to be exported, farm­ers see this ven­ture as a poten­tially lucra­tive option in the long term.

In August, we’re expect­ing the oil press­ing machin­ery to come from Italy,” said Yogesh Verma, man­ager of ROCL. This means we can now press the oil in India,” he said. This will decrease the olive oil imports which now equal 11,000 met­ric tonnes. Moreover, the ROCL man­ager claims that the har­vest will soon hit 5,000-hectares within four to five years.

Apart from the 182 acres of land under us, there is a sep­a­rate 72 acres for local farm­ers,” Verma said. It shows that the trend is catch­ing up. India could soon become a major exporter of olive oil pro­vided the projects such as ROCL become suc­cess­ful.

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