Issue 59 - 10th August, 2011

Food+Agri Strategy
Henk van Duijn

As the 2nd largest exporter of agricultural products in the world, The Netherlands has been a formidable player in the food & agri sector for over 400 hundred years. Today, Dutch innovation and knowledge has the power to substantially improve Indian practices agricultural sector. Henk van Duijn, Counsellor for Agriculture, Nature & Food Quality at the Embassy of the Kingdom of the Netherlands, New Delhi believes that the Dutch presence in India can yield benefits for both nations.

What is the broad objective of the agriculture office in India?
Agriculture trade is one of the pillars of the Dutch economy and agricultural contributes about 2/3rd of the net revenues of the Dutch Government. We therefore have a foreign agricultural network to facilitate that trade.

Primarily, the idea is to source raw material, to which we add value in the Netherlands through processing and then sell them to neighboring countries at a considerable profit (to the tune of Euro 20 billion last year). To secure the supply of raw materials, we have to be in the country of the origin. Consumers in Europe demand fresh produce 365 days a year, for which too we need to be sourcing across the world.

Dutch companies also invest in local production facilities worldwide, further ensuring supply to European markets through Dutch ports and processing facilities. Grapes are a great example in this context. In March and April, India is the only country in the world where table grapes are available. We are invested in many activities in Maharashtra that support the activities of growing, testing and exporting grapes.

Dutch companies are also simultaneously transferring cutting edge technology to local players. For instance, our top seed companies are here in India to propagate new seed varieties that produce crops that reduce the use of pesticides use less water and other suitable innovations. Therefore though we are traders, the Dutch foreign agriculture service is not only export-oriented but looks at the total trade situation. We believe we have to be local to be part of the total trade scenario.

Moreover, for many years, we have in the Netherlands an institutionalized public private partnership that involves the government, the private sector and knowledge institutions that together invest in R&D and implement it. For example, though the Netherlands does not grow cacao, Dutch institutions and government work together to improve the crop and take forward the sustainable cacao agenda because the Netherlands has interested in improving yields and quality in Ghana, Ivory Coast or wherever else cacao is being produced. Our success is largely because we look to innovate faster than out competitors and think from the consumer’s perspective. All this places us in a very different position, we believe, compared to other trade partners.

What is the focus in India at present? 
In India, our office works to strengthen our trade position. At times, this means improving market access—in the grape episode, our task was to solve that problem and guarantee supply. When a company only wants export to India and the idea is to only sell, we help them find the right partners. We also help reduce trade barriers by addressing registration or taxation issues and facilitating permissions, for instance. On a government-to-government level, we work together closely with officials from India to help them set up a stronger capacity. We are involved, for example, in a collaborative venture between the Dutch and Indian food safety authorities to exchange knowledge and train 5000 food safety personnel from India. The Indian government has been open and enthusiastic and it creates confidence on both sides.
What’s the strategy for growing the food and agri collaboration with India?

In India, we see rapid urbanization changing consumer patterns. With the opening of modern retail, technology, logistics and indeed new types of products will be in demand. We have in place a strategic five-year plan that concentrates on five major areas where the Netherlands has technology and innovations to offer India—floriculture, food processing targeting potato, meat and dairy, and to tie this all together, logistics.

The approach is to invest across the chain. We start with green genetics—since you can only improve the quality of product when you start with genetic materials—moving to crop/livestock management, processing and then finally cold chain and logistics.

In floriculture, the Netherlands controls 90-95% of world trade. Tissue culture in India is well advanced and we develop partnerships between Dutch and Indian companies to extend their portfolio. India is climatically diverse and can support many varieties. Besides the export market, domestic demand is also growing rapidly. Consumers are not willing to pay Rs 120 (Euro 2) for roses that last only two days! Dutch technology for better genetic material and cold chain will be critical and should be localized for maximum benefit to Indian consumers.

Netherlands is largest producers of potato equipment; 60% of all French fries in the world are cut on Dutch machinery and The Netherlands produces 85% of the seed potatoes needed to grow good quality potato. India was a difficult market now because if illegal copies (in contrast, we have 90% of the seed potato market in Bangladesh, which is better organized). Today, consumers are demanding more potato product; we see more convenience foods like chips, dosas and samosas. Besides, potato is one of the healthiest and nutritious products and you can do much more with potatoes than eating them as table potatoes, by processing them in a special way. We have that kind of technology.

The meat industry is another potential area for us. All over the world, when people get richer, their lifestyles change and they consume more animal protein, especially meat. We can add value once again by good genetics and know-how in farm and feed management. Dutch feed companies are already active in India and there is more interest. It is also important they are slaughtered in a way that all the animal parts are used properly without losing valuable protein. Today, 85% of the modern slaughtering in India is done on Dutch machines like Stork and Meyn. The idea is to use technology to optimize the profits in the chain.

The third pillar in food processing is dairy. Liquid milk is the cheapest form of milk, whereas value-added products like yoghurt and paneer, already popular in India, are ways to earn a higher income with the same raw materials. Here also we focus on dairy herd improvement, herd management, etc.

The Dutch also specialize in the production of exclusive products. For instance, there is a major development in the Netherlands by which you can use male calves to produce a certain exclusive calf meat- highly in demand in hotel industry.

In all these above focus areas, cold chain and logistics are also key. Without investment in the right technology, it is impossible to make the profits.

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