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.