Muzaffarpur:The Litchi District Of India

India enjoys a prominent position in the litchi map of the world both in terms of production and productivity.

Over the years, India has recorded significant growth in production and productivity of litchi, though the trend is not consistent Both the Indian and world markets for litchi are fast expanding. During the Indian litchi season (May to July),good quality litchi is not available from other parts of the world except for Thailand (May and June) and Israel (July). In spite of these advantages, India has negligible share (less than 1%) in the world trade, with exports of 155 tonnes valued at Rs. 1.5 crore during 2000–01. As of now, the major mode of marketing of litchi in India is through interstate trade.

Presently Muzaffarpur, renowned as the litchi district of India has a share of 64 % of the litchi trade in the country. The stake of the district in litchi trade is expected to touch 1.5 lakh T by 2012. In view of its prominence in Indian litchi trade, both in terms of quantity and quality,an analysis of the marketing aspects of Muzaffarpur litchi is depicted in the following sections.

Prevailing system of litchi trade

Litchi growers of Muzaffarpur sell the standing crop to pre-harvest contractors at flowering stage for a year

or more. In certain cases, the crop is leased out to preharvest contractors for 2-3 years. The crop contractors

negotiate and settle the price to be paid and the terms and conditions of payment directly with the growers.

Most of the produce is sold through this mode.The pre-harvest contractors have a clear picture of the yield potential of the orchard as a whole and performance level of individual trees in the orchard. The price offered on a per tree basis varies according to the age category. i.e.,.a tree in its prime bearing stage (10 to 30 years) with an annual yield of 100 Kg fetches Rs. 500 per year from pre-harvest contract whereas the rate for trees in the early bearing period (5 to 10 years) is Rs. 300 per tree per year.. Harvesting of fruits is done by the contractor.The farmers receive 50 per cent of the settled price in advance (at the point of firming up deal) and the rest at the time of harvest. Harvesting, sorting, packaging are done in the farms by the contractor. Loading the truck for transport to distant cities is done at the farm gate  itself.

The pre-harvest contract system prevailing in the district has an impact on the health and life of the litchi orchards. In the case of pre-harvest contract arrived at leaf or flowering stage, and valid only for that year, the owners are responsible for cultural operations except for spray against fruit fly carried out by the contractor. However,the cost incurred, on this count would be deducted by the contractor from the final settlement. In cases where the contract is for 2 to 3 years, though the contractor is responsible for all operations, he works with a short term, profit motive in mind and does not care much for the upkeep of the orchard. Contractors are not keen on investing in the orchard as they are not sure of continuing the contract during the next term. Most of such orchards,belong to absentee land lords and suffer in the long run.Further, if the orchard owner is not present, harvesters may damage the twigs and branches while harvesting causing harm in the long run.

Commodity movement

Pre-harvest contractors market over 90 per cent of litchi produced in Muzaffarpur. Most of the pre-harvest

contractors are commission agents of wholesale merchants in cities like Mumbai, Delhi, etc. Some of them are financed by wholesale fruit merchants and are obliged to sell the fruits to their financiers.The pre-harvest contractors directly supply the commodity to the local processing units and export houses located in the district. Some of the established processing units and export houses in the district directly purchase the orchards from growers by making advance payments.The commission agents and wholesale merchants play

a greater role in the distribution of the produce after purchasing it from the pre-harvest contractors. They

forward the produce to important cities in the country.At the terminal market, agents who operate on

commission basis arrange to sell the produce. The daily arrivals at terminal markets are sold either by auction

or through negotiations.