Chapter No. 8. Conclusions and Recommendations for Commercial Tissue Culture Production

Transcription

1 Chapter No. 8 Conclusions and Recommendations for Commercial Tissue Culture Production

2 CONCLUSIONS AND RECOMMENDATIONS FOR COMMERCIAL TISSUE CULTURE PRODUCTION Contents 8.1 Introduction 8.2 Financial Constraints 8.3 Technical Constraints 8.4 Political Constraints 8.5 Marketing Constraints 8.6 Constraints in Commercial Tissue Culture Production Faced by Agriculturists 8.7 Recommendations for The Successful Implementation of Plant Biotechnology Activities in Maharashtra 8.8 Conclusion 8.9 Scope for Further Research

3 CONCLUSIONS AND RECOMMENDATIONS FOR COMMERCIAL TISSUE CULTURE PRODUCTION 8.1 Introduction The plant tissue culture technique has proved its importance in today's world of science and agriculture. It has been proved that with the help of the tissue culture technique, a large number of disease free and high yielding plants can be produced. Plant tissue culture also has a capacity to cater to today's world demand for food. With the help of this technique, millions of plants can be produced within a short period of time. Conventional plant propagation methods are incapable of meeting the huge demand from the agriculture industry. Plant tissue culture as a method of plant propagation has proved itself in the world of biotechnology. To cater to the huge plant demand, commercial plant tissue culture laboratories should be encouraged. With the growing demand from the agriculture sector, the plant tissue culture business should be given the status of a full-fledged industry and all possible help should be extended. Like any other industry, this industry has its needs, which are to be fulfilled to make the entire project financially viable. Till now, tissue culture industry is not considered as an agriculture industry because the plants are grown in the artificial media and not in the soil. Though in this technique, plants are grown in an artificial media, ultimately the plantation is done in the fields, hence, this industry should be recognized as an agriculture based industry and all possible benefits such as taxation, subsidies etc. should be extended by the Government. The process of commercialization of plant tissue culture was not so simple and it started in Maharashtra sometime around Since then, many laboratories 294

4 came up. The activity flourished and many plantlets were produced and sold. Unfortunately, this did not last for long. It was found that some of the laboratories closed down their activities and some were struggling hard for their existence. Though the plant tissue culture technique was the solution for the green revolution in the country, due to certain commercial and financial problems, many projects failed. To overcome this problem, it was relevant to diagnose these problems, solutions to be found out and strategies to be evolved. In commercial tissue culture venture, two agencies are important from the cost point of view. They are commercial tissue culture laboratories and the agriculturists. Both have their own constraints and problems in achieving the desired financial goals. Constraints in Commercial Tissue Culture Production of Bananas faced by Commercial Tissue Culture Laboratories: 8.2 Financial Constraints 1. Tissue Culture - A Highly Capital Intensive Proposition: For propagating bananas. Tissue Culture as a method of plant propagation was the costliest amongst all other propagation methods. This technology involved large amounts of initial capital investment, the major expensive requirements being Building, costly laboratory equipments. Green house and other mandatory material. 2. Constant working capital requirement: Banana plant tissue culture required a constant flow of working capital. Working capital was needed for the actual production, which required hi-grade chemicals, energy for running the different gadgets requiring heavy electricity, labour and other miscellaneous items. It was found that in the initial period of about one 295

5 year, laboratories were not able to start the full-fledged production and were not able to sell their produce. During this period, they had to incur the cost for the entire year, which gave them returns in the next year. 3. High project gestation period: Tissue culture projects have a high gestation period. Laboratories who have procured loans from sources like Banks and other financial institutions suffered due to long project period. Laboratories could not start repayment in the agreed period. Interest amounts went on increasing, resulting into a sick unit. 4. Vicious financial cycle: The commercial laboratories sustaining on bank finance found it difficult to reach the production anticipated in the project due to several laboratory level problems. Banks provided less moratorium period until which the laboratories were unable to start making profits. The project period got delayed and interest amount mounted up and the laboratory got trapped into a vicious financial circle. 5. Difficulty in procuring finance from outside sources: Commercial tissue culture laboratory was not considered as an industry; hence it was very difficult for the tissue culture laboratories to procure the loans from Commercial Banks. It was found that NABARD was refusing to refinance tissue culture proposals in absence of the witness of viable projects. 8.3 Technical Constraints 1. Commercial Tissue culture laboratories ran far below installed capacity: It was found that all the tissue culture laboratories were running below their installed capacity. These laboratories were underutilized. Production was not sufficient enough to earn profits. 2. Lack of Technical Background in the current industry: Laboratories starting commercial propagation need a strong technical base of field 296

6 experts. Most of the laboratories functioning currently do not seem to have a sufficient technical strength of experts for the commercialization of the species they have undertaken. 3. High cost of production compared to other propagation methods: Tissue culture being a highly capital-intensive project, the cost of the final product was also high. The main target customer i.e. a farmer was unable to afford this costly planting material. Due to high product cost, it was difficult to market the product and the sometimes the laboratory faced losses due to unsold plants. 4. Lack in Production Planning: It was found that the laboratories were lacking in planning the entire production cycle. Due to this, the laboratories were not able to anticipate the production. 5. High contamination rate in the laboratory: It was found that the percentage of contamination in the laboratories was high. Most of the laboratories were not aware of their losses from contamination, but the losses ran from less than One to Fifty percent. While considering the high cost of production, no losses from contamination were acceptable. 6. No Quality Control techniques followed by the laboratories: It was found that commercial laboratories were behind producing more and more number of plants irrespective of the quality of the plants. The planting material supplied to the farmer was not of good quality due to extensive multiplication cycles. Such plants faced genetic problems like Mutation where growth of the plant was retarded and there was no yield in the farm. Some farmers had experienced low yields, virus attacks and in some cases there was no fruiting, even in spite of a healthy growth of the plant. However the laboratories avoided virus testing because that would ftirther increase the cost of production. 7. Limited product diversification: It was found that commercially many species were not produced in Maharashtra. There was a limited scope for 297

7 product diversification and laboratories were not diversifying due to fear of instable market conditions. 8. Lack of technology improvement for reducing the cost: It was found that commercialization of the tissue culture technique involved high cost. There was a lack of technology improvement for reducing the total cost involved. 9. Inadequate infrastructure: It was found that the commercial laboratories were having inadequate infrastructure facilities due to nonavailability of funds. It was found that due to these constraints, production took time resulting into a portion of loss. The availability of chemicals and consumables for research was often delayed as a result of poor infrastructure. Unreliable power supply in many cities in Maharashtra was a serious constraint for the efficient application of even basic tissue culture techniques. 10. Lack of skilled human resources: In a commercial tissue culture laboratory, it is very much important that skilled manpower is recruited. It was found that unskilled labour was recruited and then trained for the laboratory job. Due to the absence of skilled manpower, the contamination rate was found to be increased resulting into reduced production rate. 11. Availability of research equipment and facilities: Constant research is a part of plant tissue culture. It was found that the commercial laboratories did not have enough facilities for further research on their produce. 8.4 Political Constraints There is a lack of national/regional priority for the tissue culture sector in agriculture. As a result, no specific policy or strategy can be formulated by the National Agricultural Research Centers in the country on the application of plant biotechnology. Research & development programs currently in the state are often isolated and are of no use to the commercial sector. 298

8 8.5 Marketing Constraints 1. Lack of awareness amongst the target customers: Many farmers were not aware about this plant propagation technique. Those who were aware about the technique did not have adequate information. As a result, they were reluctant to try the new method of production. It was found that they had not seen the benefits of the technique themselves. 2. Absence of Market Research: The study showed that many of the laboratories were producing Bananas because other laboratories were producing the same. They did not do market research to learn about the market potential. It was also found that many of these laboratories were not taking advance orders form the farmers for the plantlets. 3. Lack of marketing planning: There was a trend in the commercial tissue culture market that one laboratory started and others followed without studying the market. They lacked in planning their marketing activities. 4. Lack of advertising and promotion: Commercial laboratories producing bananas were not able to reach out to the farmers. They were unable make use of the proper advertising and promotional channels. 5. Lack of linkages and networks: Laboratories producing bananas failed in the commercial distribution of the plantlets due to lack of arrangement of the linkages between the laboratory and the fields from different villages in Maharashtra. There was absence of network arrangements and the plants could not reach to the farmers. 6. Product planning: The commercial laboratories found it difficult to anticipate the banana production; hence the laboratory could not undertake marketing efforts. 299

9 8.6 Constraints in Commercial Tissue Culture Production faced by Agriculturists: 1. High cost of tissue cultured plants: Many agriculturists felt that the cost of tissue culture grown plants was high and was not affordable to an average farmer. Though many progressive farmers were trying out tissue cultured plants, other farmers did not buy these plants because they were costly compared to conventional planting material. 2. Same harvest period for entire plantation: Farmers believed that in case of tissue cultured plants, all the plants grew at the same time, as the age of every plant was the same. As a result they became ready for harvesting at the same time. In case of conventional planting, few plants got ready for harvesting every fifteen days and farmers could expect a good rate at some of the harvesting cycles. Tissue culture laboratories stated this point as one of the advantages of the tissue culture technique, but the farmers stated that if the market rates were low at that particular time, they suffered heavy losses. 3. No after sales service by the tissue culture laboratories: Banana tissue culture is a new technique of plant propagation for the farmers. Tissue culture laboratories were not giving any consultation after selling the plantlets regarding pre-plantation, fertigation, pesticides, irrigation, soil information etc. Due to lack of knowledge, mortality rate of these plants increased and consequently the ultimate cost of production increased. Farmers felt that the tissue culture laboratories should assist them in plantation and help them make more profits. 300

10 8.7 The following recommendations are suggested for the successful implementation of Banana Plant Tissue Culture activities in Maharashtra: 1. Feasibility Study should be carried out: Before starting the production, the commercial plant tissue culture laboratory owner or CEO should conduct a feasibility study for that particular plant species and the viability of its commercial exploitation. 2. Preparation of a detailed project report: The laboratory owner or CEO should prepare a detailed project report, which would be the guideline for the laboratory employees. A detailed project report will also be helpful in planning the entire activity related to the product e.g. production, sales & marketing etc. 3. Procurement of loan: Government and Banks should simplify the procedures of financing the high tech agriculture projects such as plant tissue culture, green house cultivation etc. 4. Project Appraisal: In the laboratory, the project should be reviewed at every stage and further steps should be taken. Changes must be made in the development and administration of the laboratory. 5. Monitoring and evaluation studies: Every production cycle should be constantly monitored and evaluated as per the changing requirements of the project. 6. Market research before starting the laboratory: The commercial tissue culture laboratory should carry out a market research before starting the production to know the current market position and the market demand for the product for at least the next two years. The laboratory should also collect information about the currently popular species being planted in the target markets. The laboratory should also find out the current market 301

11 rates of the plants. The total market survey should be carried out to study all aspects of the business. 7. Need of strong Technical Background: Being a high-tech propagation method, the commercial tissue culture laboratory should have a strong technical background. The laboratory should have adequate facilities and equipments for production. The owner or CEO of the laboratory should be a technically sound person to solve all technical problems arising at any point of time. Tissue culture requires hundred percent participation of all employees working at the laboratory including the owner or CEO. 8. Laboratory location, designing and commissioning: The laboratory should be designed as per the nature and scale of production. The laboratory should not be very far from the market place for easy transportation. Communication, transportation, labour, market etc. should be in the vicinity of the laboratory. The laboratory equipments should be bought from renowned companies to avail of after sales services. This point has been discussed in detail in Chapter number Preparation of Accurate flnancial budget: Accuracy in budgeting should be very comprehensive. Factors including likely cost escalation, prospective competition etc. should be given due consideration. (a) Capital Investment: Proper finance arrangements for the current year with estimation of the next two years should be done to avoid scarcity of finance at the time of important stages of product development and marketing. Arrangement of entire capital should be made well in advance before staring the project to make the project viable. Tissue culture being a process industry, once the laboratory work starts, it should not halt for any reason. If the production stops, the entire economics of the project fail. (b) Working Capital: There is constant working capital requirement in the tissue culture laboratory. Farmers buy plants in the month of June/July or 302

12 November/December when the banana plantation is usually done. To suffice the need of this season, the laboratory has to be ready with the plants for sale. For this preparation, the laboratory starts working three to four months in advance. During these months the laboratory requires more working capital. During off-season, the laboratory requires less working capital. At some phase, the volume of working capital has to be more and at some phase it can be less, but a constant working capital flow is required. If working capital is not available at a proper time, one entire production cycle may be lost which can result into heavy losses. 9. Marketing of the product should be made in advance: Marketing of banana tissue culture plants is a very sensitive area and it requires marketing experts for handling the situation. Therefore the risk percentage is very high. To minimize the risk, marketing efforts should be made in advance to make the farmers aware about the product range of the laboratory. Advance orders should be procured. 10. Exemption from Government charges: Loans and advances provided by the government agencies and Banks for tissue culture projects should be exempted from Stamp Duty and other Government charges. 11. Background of Agriculture or Horticulture business: Companies having seed, agriculture or horticulture activities have an advantage to diversify into banana tissue culture as their additional important branch. With their existing infrastructure like Green houses and established network of domestic and/or overseas market, it is easier for such companies to divert the profits of the original business to satisfy the requirement of huge working capital for this new branch. A first time entry in this business without any agriculture background should be avoided. 12. Product diversification: Banana being a seasonal crop, other plant species should be developed in the laboratory during off-season. Simultaneously with banana production, the laboratory should also produce flowering and 303

13 foliage plants owing to their tremendous export potential which is gaining momentum. With this, the laboratory would be able to achieve a constant rate of return every year. 13. Farmer's education is a must: Many farmers are not yet aware about the tissue culture technique and how it will benefit them. The commercial laboratories should arrange farmers' education and training programs for the farmers in the target market. 14. Demonstration plots: The laboratories should develop Demonstration plots and farmers should be allowed to inspect the plots at any time. Farmers should be given sample plants for trials in their field. 15. Formation of co-operative societies: Farmers' co-operative society in the villages should be started to collect the banana produce and should be carried by the society to the cities as it fetches more profit than selling in the village. 16. Export Potential: Indian banana market tries exporting a small amount of banana. About Three to Four percent of total production was exported between and Maharashtra State Agriculture Marketing Board, Pune exported bananas from the Narayangaon area, District Pune, to M/s. International Foodstuffs Company, Dubai in the year From an exporter, Mr. Basutkar, it was found that banana export did not gear up as expected. He mentioned that ripening of banana fruit was artificially done with the help of calcium carbonate, which was not acceptable in the international market as it posed a health hazard. He also mentioned that fruits produced in local farms required a long time for packing, transport and shipment and were found to be of a deteriorated quality in the process. Mr. Basutkar also stated that the cost of sea transportation was very high. There is still demand for export of bananas, provided Indian Banana plantations give a good quality yield. Tissue culture grown bananas can be 304

14 exported because of the higher yield and the size of the fruit is uniform and bigger than the conventional one. 17. Vertical Integration: The laboratories should collaborate with the banana processing industries and farmers should sell their produce to the laboratories. Farmers should sell banana produce to the laboratories and the laboratories should process products like Banana Puree, Pulp, Chips, Toffees, Juice, Banana powder etc. Laboratories should foray into the processing industry, because it has high export potential. Banana processing technology is available at Central Food Technological Research Institute, Mysore. Laboratories should take advantage of the same and should start such an industry. 18. Need for National Policy for plant tissue culture industry: Tissue culture labs should put forth the demand for formulating a National Biotechnology Policy from the Department of Biotechnology, Central Government, which will decide the standards, rules and regulations to be followed by commercial tissue culture laboratories. In case of technical needs, the tissue culture laboratories should seek technical help from the Micro propagation Technology Parks developed by National Chemical Laboratory. 19. Assistance from Government agencies: Various Central and State Government agencies have been trying hard to boost agriculture business and agriculture processing sector in the State. The lacking factor is a dialogue between the farmers, agriculture industry and the government development agencies. To fill up this gap, government departments have come up with the schemes. These schemes are to be reached to the tissue culture laboratories and the farmers. Government should arrange district level seminars for establishing communication between tissue culture laboratories, farmers and government agencies. 305

15 20. Efforts to lower the cost of production: With limited resource availability, plant tissue culture should be tried out in the laboratories. Every laboratory should try to cut down on the monthly expenditure and should explore cheaper alternatives for chemicals, equipments and explants without hampering the quality of the plants. 21. Employee training on accuracy factor: It was found that the laboratory operators employeed by the laboratories were only educated till the 12"^ standard. These operators were not aware about the entire laboratory process; hence they did not have an integrated view of production. Their errors caused major losses to the laboratory. They should be made aware about the job accuracy and its importance. Training for achieving accuracy in the production process is essential. 22. Help from other sources: In case if technical help is needed, cooperation from universities, research institutions, private sector and government agencies should be obtained. New scientific partnerships, strategic research alliances, and buy-back arrangements with the technical partners can be made, which will give assurance of a hundred percent sale. 23. Linkages and network development: Linkages between different states and countries should be developed which will prove beneficial in marketing and export. The co-operative societies from different villages should come together and should develop State Federation Society for developing export contracts with foreign countries. For local market a special market network should be developed. 24. Franchise Schemes: Currently tissue culture laboratories involved in banana production use direct marketing methods. Hence, the laboratories directly contact farmers. The laboratories propagating bananas should appoint their franchises in different important villages where banana plantation is done because it is difficult for the commercial laboratories to reach to every village. The franchises should develop demonstration plots 306

16 for that village and should help the laboratory in taking the advance orders of the plants. The laboratory can contact the farmers directly in nearby areas wherever possible. 8.8 Conclusion India is the second largest banana grower in the world and Maharashtra is the leading state in it. Due to the various advantages of the tissue culture technique such as disease free and high yielding plants, it has a constant demand. With the help of the tissue culture technique and other advances in the agriculture field, Bananas could be produced throughout the year. There is tremendous scope for export provided the fruit specifications match with the world standards. With the help of tissue culture, Maharashtra can go into export market of Bananas. There is a year round demand for bananas and only Fifty percent of the demand in Maharashtra was being served. To sum up there is tremendous scope for tissue culture of Bananas. Though tissue culture is still a new plant propagation technique, technologically, Banana tissue culture is well settled. Although the technique is being well researched it still continues to have some problems, which need to be solved. It is found that most of the laboratories faced commercial, technical or market based problems. Some laboratories are underutilized and are facing losses. Aggressive marketing is required for improving the financial viability of the tissue culture project. More and more help from the Government and Agricultural research centers is anticipated. With the constant innovative advancement, tissue culture has a very bright future. It could also be concluded that tissue culture is the current need of Indian agriculture. Tissue culture being a superior method of plant propagation compared to the conventional method, it promises tremendous demand in ftiture. 307

17 Government can definitely help in taking up the tissue culture business in the field of agriculture. Government can help by way of offering different types of subsidies specially for promoting banana tissue culture and also the procedure to avail the subsidies should be simple and transparent. Government can promote the plantation of tissue cultured plants by publishing its advantages for the farmers. Government can help in promoting tissue culture technique in the agriculture field. Tissue Culture industry involves big capital investment, advanced technical know how and apart from this, great patience and commitment. Maharashtra can benefit from the applications of plant biotechnology. This can be done through proper planning, interactive cooperation among and between different cities and villages in Maharashtra. Household food and health security can be ensured through breeding of disease free, higher yielding plants, mass propagation of better quality plants and crops with specific desirable characteristics. Plant tissue culture can therefore be an effective channel in commercializing crops, which can create jobs, earn foreign exchange and ensure a better quality of life for all. 8.9 Scope for further research It was found during the process of research, that there was tremendous scope for export of tissue culture grown bananas. Export market for bananas has very high potential, however, it has to be explored by designing suitable marketing strategies. The domestic market of bananas also needs to be stabilized with the help of suitable marketing strategies. Further research could be undertaken for identifying such marketing strategies. 308