AQUACULTURE
Over A Shrimp's Dead Body

It's a hot September day and Jairaj is lounging in his work clothes, a lungi and banian. Before him is his factory, a windswept pond, and behind him is his home-cum-office: a two-room thatched hut with a television set and VCD, a kerosene stove, a creaking bed, and two wooden almirahs. The hut has no drainage, no toilet. But for 10 months of the year, Jairaj lives here, 45 km out of Chennai. Just him and his TVS Max motorcycle, his two pie-dogs who serve as guards-and the shrimps.

At midnight, he feeds his beloved shrimp, no more than a cm-long today. Two hours later he will check to see if they have dined. With good care, they will become seven-inch tiger prawns. Any change in feeding pattern is a sign of disease, a major factor in the dramatic decline of the aquaculture industry of the early 1990s. ''In the 10 crops I've had, I've had diseases in only two,'' says Jairaj proudly in impeccable English.

Aided by four women and two male workers, Jairaj raises only three crops over two years, but his prawns are fat and succulent, enough to fetch him anywhere between Rs 350 to Rs 500 per kg. A zoology graduate and former medical rep, he is a modern aquaculture entrepreneur who's learned to live with the land, harvest his shrimp, and earn Rs 2 lakh from a crop, enough for a tenuous sustenance.

Jairaj, is particular that he does not abuse the land, carefully applying non-toxic chemicals to break down effluent into protein chains that go back into the shrimp's food cycle. The excreta from thousands of shrimp is toxic and over years aquaculture gained a terrible rep because the early entrepreneurs wantonly polluted neighbouring farm lands with the filthy effluent. For the delicate shrimp of course, it was a holocaust. Finally, a Supreme Court directive in December 1996, banned shrimp culture in the Coastal Regulation Zone, a swathe of land between 100 and 500 metres from the shoreline.

The early motivation was easy finance and the lucrative Japanese market. Companies dug up thousands of acres of coastal land, splurged on airators, pumps, other equipment, feed, and housing. But when the white-spot disease (signalled by white spots on the shrimp) wiped out crops between 1994 and 1996, working capitals were wiped out and chastened lending agencies pulled the plug.

''Many of the corporates were not prepared to learn and profit from the disease-cycle. They wanted 'profits yesterday' and that is not possible in this industry which is prone to more risks than agriculture,'' says M. Sakthivel, President, Aquaculture Foundation of India. Many could have benefited from their experience, but chose not to. They took shelter under a Supreme Court ruling restricting shrimp cultivation per acre, said they didn't fulfil it and quit. Sakthivel says a corporate 9-to-6 culture and a supervisor without feeling for his shrimps don't seem to work in this industry. Thus the need for small-scale farmers.

''This requires intense management which necessarily comes with ownership and not through dependence on company officials,'' confesses one of Andhra Pradesh's high-profile early entrants into the field. He's accumulated losses of Rs 30 crore in six years. Little wonder that many corporates, who set up integrated capital-intensive projects as large as 400 acres (10 or 20 acres is the largest size recommended) suffered.

Today, the larger survivors scrupulously avoid grand projects. Nekkanti Sea Foods of Vishakapatnam, a giant with Rs 100 crore turnover, sources shrimps from farmers all along the coast, small-timers like Jairaj. Instead of farming shrimp, Nekkanti focuses its energies on processing, packaging and building its brands, Akasaka Star and Akasaka Special, sold in seven countries. ''We have very low overheads and almost no term loans,'' says Atluri Subba Rao, Chairman of Nekkanti. This, he says, has helped the company survive even in today's market of falling rates and new competition coming from countries like Vietnam. Similarly, Thapar Waterbase, a Thapar company that plunged into the red in the late 1990s turned around after leasing the land to farmers and doing the rest.

Aquaculture's return has been better than granite. There are about 100 companies along the coast, half a dozen with exports between Rs 100 to Rs 200 crore. Many of the others are small and medium players with exports in the region of Rs 20 to Rs 25 crore.

Most of these companies have learned to spread their risks, splicing operations into separate divisions or entire companies: one for farming, one for processing, one for exports, one for consultancy. ''Each aspect gets the dedication and focus it requires with people having the required skill sets,'' says G. Viswanathan, Senior Advisor, BMR Hatcheries, Chennai. It also allows personal contact with and increased responsibility for personnel. It's a model followed by the biggest: Devi Fisheries, Chennai, (Rs 150 crore in exports), and Ashwini Sea Foods (Rs 100 crore in turnover).

However, the turnaround is only beginning. Here's one to keep the recovery in perspective. Thailand earns as much as $4 billion from aquaculture-in half the space.

FLORICULTURE
The Rose That Stayed At Home

In the last eight years, K. Natarajan has partnered Thais, Australians, and Singaporeans in his attempt to sell orchids to the world. He's seen floods destroy his plants and moved his business when the Tamil Nadu government decided to build an industrial estate over his greenhouses. No, it hasn't been easy, but Natarajan turned a profit every year, save one, since 1993.

It's all because of the orchids.

The floriculture boom was sparked off by roses. As the 1990s rolled in, rose prices peaked worldwide, and much like they rushed into portals in 1999, entrepreneurs rushed to grow roses in 1993. But so did counterparts in other countries, all rushing roses to the great flower auctions in Holland.

By the middle of the decade, there was an oversupply and a worldwide floriculture downturn. It was too late for many Indian floriculturists who had splurged on imported greenhouses, equipment and consultants. Some who foolishly set up greenhouses in the searing heat of the north-only a couple of 15 companies set up here survive-crumbled under soaring cooling costs and an uncertain distribution chain.

Roses survive for only five days with airconditioning unlike orchids that go on for 15. Natarajan grew the hardy orchid on waste land in humid Chennai. And unlike rose growers who must keep pace with the new varieties that hit the market every year, he knew an orchid is a classic.

Unlike Natarajan, Nadeem Ahmed did it the hard way. With a turnover of Rs 7 crore and a profit of Rs 2 crore, CCL Flowers is one of the biggest in the business. He grows flowers over 15 hectares, double the size of his nearest rival. And yes, Ahmed-a lawyer from Hyderabad who set up greenhouses in mild Bangalore-did it with roses. Says Ahmed: ''We survived mainly because of our economies of scale and indirect exports to markets other than Holland.''

There are about 62 floriculture units today, (40 are in South India), but most are crippled by inflated costs. ''The early players imported green houses at double the price, plant material at three times the present day value, then had to pay technical collaboration fees-often going up to Rs 40 lakh for projects of Rs 7 to Rs 10 crore,'' says Anne Ramesh, 45, President, South India Floriculture Association. It isn't hard to see what happened. ''In all, those who have not overcapitalised have survived,'' says Anil Swarup, 41, Chairman, Agriculture and Processed Food Products Exports Development Authority (APEDA).

It's a story similar to aquaculture: success is in the details. Flowers are best when they are cut at 4 am. They must be meticulously examined and any with signs of wilt must be discarded before making the long journey to the world's markets. And it's best to sub-contract farmers to grow the flowers: they have a stake in the crop, know it best, and don't mind getting their hands dirty. ''Uneducated farmers,'' Natrajan says firmly, ''are better than corporates''.

Nursed properly, floriculture could greatly expand. A government-sponsored study ranks it as a ''sunrise industry'', and so APEDA is drafting a rehab plan for 34 sick units.

Selling flowers is a boom industry worldwide, and world trade data show that the share of developing countries amounts to more than 20 per cent, but Indian contribution in floriculture has never been more than 0.5 per cent of the world's flower trade.

According to the South India Floriculture Association, total flower exports increased from Rs 60 crore in 1995-96 to Rs 81 crore in 1997-98, to around Rs 100 crore now.

But that's plant fertiliser when you consider that of the 4 billion flowers are sold at auction centres globally every year, India supplies no more than 60 million flowers. For those who try, the domestic market-where demand is almost doubling every year-holds great promise. They just need to try.

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