Study of wine industry policy in India

Abstract

There are many policies, programmes, plans and schemes have been formulated for the development of Agriculture and Rural development since independence by the Central and State Governments. In this regard, the promotion of cultivation of wine grapes and consumption of wine is also one of the policy of the State Governments of Maharashtra and Karnataka to provide better income to farmers and provide healthy beverage like wine. This can be learnt that, out of the promotion of cultivation of wine grapes and manufacture of wine, the European and Latin American countries are able to improve the welfare of their farmers and contribute to the growth of the GDP of their country. With the consumption of wine the ill effects of consumption of hard liquor on health and safety of the consumers like trauma, violence, organ damage, various cancers, unsafe sexual practices, premature death and poor nutritional status of families can be minimised. India is not traditionally a wine drinking country, however, recently the state government of Karnataka has formulated the Karnataka Grape Processing and Wine Policy 2007 aimed at improving welfare of the farmers of the State. This policy has a potential of a dual advantage in improving societal welfare. On the one hand, consumption of wine among alcohol is considered better for improving health conditions of people and on the other, proper growth of this sector can enhance farmer s welfare. Therefore both producers and consumers gain from the development of this sector. As the consumption of alcohol increases, it is better if a shift towards wine consumption is achieved and wine consumption share increases which is negligible today. The consumption of other types of alcohol dominates Indian consumption at present which is considered not desirable from the viewpoint of health of people, foreign exchange outgo and impact on poor. At this stage of economic development when the alcohol consumption is growing at a faster rate it is important to achieve the shift in consumption. Therefore wine sector development policy assumes importance. In Karnataka Grape Processing and wine policy, it was also thought that by providing proper impetus to the wine production and marketing the wine grape farmers will get good remuneration for their produce. In the absence of a proper study, evaluating the impact of this policy, it was thought that an analysis of the impact of this policy would be useful to understand the impact and arrive at suggestions to improve the policy effectiveness, how has the wine production and consumption changed after initiation of this policy .The objective of this study to analyse the impact of this policy on the production and consumption of wine in India with special reference to the states of Delhi and Karnataka The data of the consumption of different liquor like whisky, Beer, rum and vodka month wise for the years 2008-12 for the states of Delhi and Karnataka will be analysed and share of the wine consumption in the total Alcoholic consumption in Delhi and Karnataka will be ascertained .Further, it is also researched that what extent the Karnataka Grape Processing and Wine Policy 2007 has contributed in getting the remunerative prices for grape-growers?. In this research, the rate of growth of wine consumption in Delhi and Karnataka is determined as compared to other beverages. By analysing the growth rate of wine of these two states, which contribute about 32% of the total consumption of wine of the country. This can give fairly a good idea of the trend of wine consumption in the country. Besides this, the data collected out of the interviews, surveys and focus discussions with stakeholders of the wine industry like farmers, retailers, wholesalers and distributors of liquor, excise officials, wine board officials and different customers. These data helped in knowing the production and consumption of wine and also the feedback from the farmers regarding the viability and profitability of the cultivation of wine grapes. After the detail analysis of liquor data collected ( primary) regarding the consumption of different liquor like wine, Beer, whisky, rum and vodka in the states of Delhi and Karnataka for the five years from 2008 to 2012 . I have concentrated on the growth of consumption of wine in these states and how the Karnataka grape Processing and Wine Policy 2007 has impacted on the growth of wine In this analysis, the impact of this policy on the growth of wine consumption in Delhi is not substantial but there is marginal impact of this policy in the growth of wine consumption in Karnataka. This analysis based on the real data and facts provided by the Excise departments of Government of Delhi and Karnataka. In Karnataka, the stakeholders of the wine Industry as such farmers, wine makers, Distributors and retailers expected many benefits and very hopeful of getting the benefit from this policy and hence invested large amount of finances in expanding the cultivation of wine grapes and in setting up of the wineries, most of the farmers and wine makers have taken large amount of loans from the banks at high interest rates. Finally, after five years of implementation, instead of making the profits, most of the farmers and winemakers incurred losses as the farmers could not get the good returns by selling the wine grapes. In the analysis of Karnataka Grape Processing and wine Policy 2007there is not much help in taking care of reducing the cost of cultivation of grapes and most of the subsidies and concessions are kept for setting-up of the Wineries and for the marketing and sale of wine. Only one subsidy is accorded to the cultivation of Wine Grapes from National Horticulture board, Ministry of Food processing Govt. of India. With the help of data collected out of interviews with different stakeholders particularly farmers, the cost of cultivation of wine grapes comes to about Rs. 28,223 per tonne (if the cost of land taken) or Rs.21,556 (if the cost of land not taken) and the returns for the farmers comes to about Rs. 32,469.50 per acre which is not an encouraging proposal to go for the cultivation of wine grapes. Moreover, the cultivation of wine grapes requires the knowledge of modern technology, and this crop is always gamble with the climate and pests. Even after passing through all these difficulties, the farmers are not getting the better remunerative prices for their produce as the consumption of wine is not picking- up as examined in my research. I have made sincere efforts to suggest the measures to enhance the growth of Wine Industry in India which in turn, help to improve the condition of Grape- farmers and promotion of Healthy Alcoholic Drinks i.e. Wine. The Government should give policy help to formulate and develop a Policy Platform for Wine and transform state policies, delink/ differentiate the Wine from other beverages and spirits, focus on Lowering duties and taxes on wine, rationalizing Inter-State Regulatory and tariff barriers, promotion of single window clearances facility, strategize to reduce costs, develop export markets, innovative packaging, develop branding and marketing of Indian Wines and other different suggestions are being made in my research for the growth of wine industry in India.