India, the world's second largest potato producer, is potentially a huge market for western machine builders, breeders and processors. However, copying the model from here, as the Chinese do, does not fit into their culture. Innovation does: there is even a Ministry for the Food Processing Industry.
India, a country that is very well developed in the field of computer technology, but which still has to throw away more than 40% of the fruit and vegetable harvest every year due to a lack of knowledge and infrastructure. There must be room for improvement here. At least, so you would say, but in practice it is more unruly. In places where the oxen still walk over the backs during the harvest, you do not have to come up with all kinds of smart and expensive Western technology. Yet almost all of the western potato companies are there.
The figures behind potato cultivation are impressive. India produces 48 million tons of potatoes annually, making the country the second largest potato producer in the world (after China). The majority grows on small farms with less than 1 hectare. Most of the total population of 1 billion are farmers. The larger potato companies can be found in the north of the country, where collaborating families sometimes grow several dozen hectares of potatoes. This is also where the focus of the processing industry and the cultivation of seed potatoes lies.
McCain is the largest western processor in India, but the other big names have since followed suit. Despite a modest share of 3% in consumption, the demand for processed products continues to rise. Potato consumption is 27 kilos per person annually and is rising. Nevertheless, the potato market has been struggling with low prices in the past 4 years. Insiders blame this on the stagnant growth of the Indian economy, which has fallen from 10% to 5%.
Stripped planter
Doing business in India is what western companies call 'challenging'. Where China often opts for large projects with copies of the western production model, India sticks much more to the traditional culture and changes have to come from within. This does not alter the fact that knowledge and technology from Western countries are gladly used.
For companies that invest in the country, it is a matter of patience. After having focused on the Indian market for about 10 years, machine builder Dewulf entered into a joint venture with the Indian engineering company Mahindra 2 years ago. Together they respond to the emerging demand for more modern mechanization. "The result of the collaboration is a simple cup planter, especially for the Indian market," says Ion Dhondt of the Belgian brand. "We provide expertise, Mahindra puts it on the market. That cooperation is going well. We are now putting the finishing touches on a simple harvesting machine."
Kiremko, a manufacturer of processing lines, has also been exploring opportunities in India for years, but has only sold limited equipment. Nevertheless, things are moving forward, Maurice La Lau, the area sales manager, says. The reason is that the Indian government has allocated money for subsidies on the purchase of processing and storage equipment. "That subsidy can go up to €5 million. We recently sold several new units." India established a Ministry of Food Processing Industry in the 90s. In doing so, it aims to help farmers add value to their products, prevent food waste, stimulate the economy and give research and development a pendulum.
Kiremko is present in the country with a modest office, but large numbers and after sales are not yet on the agenda. "We do have a local service team, but it must be crazy if the Indians can't make something themselves." India also has various investment programs for refrigeration technology. However, market penetration is not easy for processors, due to the poor infrastructure in the country. There will have to be some catching up to do in this area. This also applies to storage. Just after the harvest in February, there is sufficient supply of potatoes suitable for processing, but there is too little supply from August to January.
'Growing with own varieties'
The propagation of seed potatoes is concentrated as far as Punjab, which is located in the northwest of the country. New starting material then travels up to 2.000 kilometers to growers in other parts of India. There it is propagated, especially without further certification. The breeding of potatoes is largely in the hands of the government and new varieties therefore mainly come from the national potato breeding institute CPRI.
HZPC has been active in India since 2005 and has only been making progress in propagating its own varieties for the past two years, CEO Gerard Backx reports. In partnership with Mahindra, the company started the production of mini tubers in 2. "At the moment we get the largest part of our turnover from propagating free varieties. We use this to build up volume. We help growers with advice and guidance and hope to bind the best growers to us. In the meantime, we are starting to build our own races."
One of those varieties is Colomba, a table variety, because fresh consumption remains the most important market segment for the time being. "We want to offer an alternative to local varieties with certified starting material and good genetics. That means higher yields and better quality." Backx calls the Indian market challenging, but also notices eagerness among the growers. "Information sharing is going very fast. The country is lagging behind, but the changes are happening much faster than here in the Netherlands."
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