An Upsetting Applecart

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Kashmir’s fruit basket is losing weight and many other factors are sending fruit growers into the red. A Kashmir Life report.

For decades, apple has been the prime mover of Kashmir’s rural economy. But the story is not as rosy as it used to be in the recent past. Initially it was the incessant rains. Then the unrest took over and created problems, which growers and policy makers had not anticipated. An early snowfall in parts of south Kashmir devoured thirty percent of the crop that was ripe for picking. Together, all these crises cost Kashmir a fortune.

Traditionally Kashmir would transport its produce directly to the mainland markets. Though there are as many as 21 markets that consume Kashmir apple, Delhi’s Azadpore continues to be the main market. Major traders would advance money to the Kashmir growers and get huge cuts from the sale turnover.

Off late, two major developments changed the system. Firstly, the emergence of a chain of satellite markets emerged within Kashmir. Secondly, a pro-active J&K Bank liberally financing the local growers directly, reduced the exploitation of the growers by the commission agents in Delhi market. It resulted in hundreds of major buyers from outside flying to Kashmir in autumn to make purchases in these mandis (wholesale markets). The growers would get cash almost at doorstep without getting involved in transportation and other issues. The ongoing cocktail of shutdowns and curfews crippled that system, at least for this year. Not many buyers could visit these markets in Kashmir forcing growers to revive the old system of taking the crop to markets outside.

Growers who are desperately looking for immediate marketing of their produce say they are battling a host of problems. “Immediately, it is the selling price,” said Shabir Ahmad, a resident of a Shopian village. “The produce would fetch better rates with buyers from outside in the local markets but their absence this year has already seen the rates nose-dive by around Rs 200 a carton (18 kgs),” he said.

Non-availability of transport is the second major problem. With Kashmir shut down, few trucks were coming to Kashmir. Desperate growers even paid Rs 110 per box (which is more than double the normal freight) to get their produce transported. The crisis led the government to intervene. “We managed the crisis by sourcing empty trucks from outside – 1727 in October alone,” M S Qasba, Director Horticulture (marketing) said, adding, “so far we have despatched 510 thousand metric tonnes of fresh fruit that 48847 trucks ferried out of the valley till October 28.” This, he said, makes higher despatches this year as compared to 448 thousand tonnes of the last year in the same period.

Kashmir producers an average 12 lakh metric tonnes of apple a year but Director Horticulture Dr G H Shah said the produce was 30 percent more this year. “It would have been double but inclement weather, hailstorm and speedy winds destroyed most of the additional crop,” he said, adding, “it is still better than last year.” Even if Kashmir’s apple production is presumed to be constant, it would still require another 50,000 trucks to ferry it to the markets. The process concludes by late February but it all depends on the weather conditions that impact the road connectivity.

Authorities ensured that no truck leaves Kashmir empty. Initially they even got a few thousand trucks from outside to guide them to a hungry market. As the situation improved, growers rushed their produce and it proved counterproductive. “The daily requirement in Azadpore is 300 truckloads,” said an agri major who is into third generation of growing and marketing apple. “But we are sending 700-800 truckloads a day and it lead to a glut and triggered fall in the selling price.” The net margins are down by around Rs 200-250 a box.

=It seems as if the dice was loaded against Kashmir this year. Kashmir apple is suffering for two immediate reasons that are not of its own making – over-production and delayed monsoons in Himachal Pradesh. “Usually there was a gap of one month between the harvesting in Himachal and Kashmir. By the time there was Diwali our produce would start going to the market,” said Syed Altaf A Bukhari, Managing Director of the FIL Industries Ltd, Kashmir’s major agriculture entrepreneur. “This year that gap is erased because Himachal is still in the market while we started supplying to the market.”

In such a situation, authorities should have intervened. They could have guided the growers towards opting for a staggered supply. But officials are keen to see the last box of apple moving out of the Jawahar Tunnel so they encourage despatches!

Kashmir is a late riser to the requirement of the post-harvest technology. But it still has around 22000 mts of controlled atmosphere storage (CAS). Of the five CAS stores in India, two are in Kashmir. The facilities are underutilized. FIL’s Bukhari who has pioneered CAS technology in India and owns 18000 metric tonnes of CAS facility in Srinagar says it is yet to pick up. “We are yet to start storing because there is no good response to storage this year,” he said.

Khuram Shafi Mir, who runs a Rs 12 crore  4000 metric tonnes storage capacity (almost half being CAS) in Lassipora Pulwama – in the heart of south Kashmir’s apple belt, however, says he is running half of his capacity.

The system that the market has evolved envisages the CAS store owners either sub-letting their facilities to the major players (mostly MNCs) or entering into partnerships on year to year basis. For a cut, they even act as their agents to make procurements as well. For this year FIL has tied up with Reliance and Mother Diary. “But we are not storing anything. We procure and despatch it to them after grading and waxing,” Bukhari said. “We did more than 1000 tonnes and many orders are there.” Unlike FIL, Shafi has inked some deals with Reliance, Adanis and some other group for supplying the apple early summer. Both are working with Field Fresh.

Mir has studied abroad and understands the crisis that is in store for the apple in coming days. “Growers from Himachal sell their produce for Rs 1800 per box and the imported American apple sells at Rs 2200 per box,” Mir said. “Kashmir apple has never crossed Rs 900 a box for the finest quality.”

But the day New Delhi surrenders before the pressures of the West and does away with the 50 percent of the anti-dumping duty there will be narrow differences between Kashmiri and American apple. “In that case American exports will get an advantage over Kashmir apple,” he said asserting that Kashmir requires immediate investment in the post-harvest technology. “Up market chains are selling Kashmiri apple in summer in place of Californian red delicious and import substitution has started because of the CAS technology,” he said, adding, “it needs to be up-scaled.” Right now there are two more entrepreneurs implementing their CAS facilities in south Kashmir.

But these are not the only concerns. Without being noticed, Kashmir’s overall fruit basket is gradually losing weight and officials said they do not have any clue other than the weather playing a spoiler. Compared to 2007-08, overall fruit arrivals from Kashmir in markets outside J&K have dropped by an unprecedented 23 percent.
Official data available with Kashmir Life suggests that against the ‘export’ of 849471.52 metric tonnes of all the four major fruits in 2007-08, the volumes were down by 127873.09 Mts to 721598.43 Mts in 2008-09. It nosedived further by 33269 Mts in 2009-10 to reach an all time low of 688329.43 Mts.

Highly perishable Cherry, season’s first crop which goes to market along side strawberries, is the only fruit that has shown some signs of improvement last year. Its ‘exports’ plummeted from 3092.43 Mts in 2007-08 to 1969.51 Mts in 2008-09 but seems to have marginally improved in 2009-10 when 2019.64 Mts were sold in mainland markets.
All other fruits are exhibiting a dwindling trend. Plum ‘exports’ fell from 10862 Mts in 2007-08 to 8720.52 Mts in 2008-09 and 3588.96 Mts to 2009-10. Even though it improved, it is still two-third less than the volumes Kashmir sold two years back.

Pear is the same story. From 30203.60 Mts in 2007-08 to 25957.51 in 2008-09 and 20958.37 in 2009-10, pear sales in mainland markets have taken a hit of 9245.23 Mts which means a fall of over thirty percent.

For Kashmir it is apple that matters because it is this fruit that is linked directly to the mobility in the countryside as it brings around Rs 2000 crore of cash every year. In 2007-08, Kashmir supplied 44739638 boxes carrying 805313.48 Mts of apple. It went down to 38052827 boxes with 684950.89 Mts in 2008-09 and finally in the last financial year (2009-10) the total supplies were of the order of 36764581 boxes carrying a volume of 661762.46 Mts of apple. It essentially means around 18 percent fall in number of boxes as well as the total volume.
“It will take us some time to understand if at all the exports are going down,” a senior officer in the state horticulture ministry said. “Weather has all along created a problem but there could be some exports from the local mandis which may not be landing up in the major markets outside,” he added.

Local growers say the most of Kashmir has aged trees and the new plantations will take their time even though they have smaller gestation periods. “Yields are down,” admits Wasim Ahmad, a grower who marketed 1200 boxes in 2007, 980 in 2008 and barely 800 in 2009. “Even this year I doubt I can sell 800 boxes,” he added.

Almost one-third of the fruits that Kashmir produces is either consumed by local market or goes into processing. And this sector is also not offering any rosy picture. Recession proved a major de-stabilizer.

In 2009 and 2010, global meltdown led Beijing to export most of its apple concentrate produce to India. Its sale at throw-away costs (Rs 30 a litre) hit hard the domestic manufacturers (for whom a litre costs Rs 45 for production alone). “We did not sell even a single litre of apple concentrate last year,” admitted a senior officer of the J&K Horticulture Produce Marketing Corporation (JKHPMC) that owns a small 800-tonnes apple concentrate plant in Doabgah (Sopore). “Right now we have over 200 metric tonnes of apple concentrate inventory. Part of its stocks is nearing the expiry of shelf life.”

But FIL Industries Ltd run Rs 45 crore 7500 mts concentrate capacity plant, the best and the largest in the region, is also not doing good. “We have barely sold a few percent of our 2600 mts of concentrate,” said Bukhari. “We still have some of the clients in Europe making purchases because the Kashmiri apple has the highest acidic concentration but the overall market took a huge hit because of recession,” he said. Bukhari and Himachal are jointly fighting to get the import duty raised from 37.5 to 75 percent. There have been no leads coming, however.

Incidentally, the state government in J&K had done away with Market Intervention Scheme (MIS), apparently on political reasons. Aimed at keeping the apple basket clean from the bad apple (C-grade), MIS ran successfully for two years and is not operational for last two years. Some lawmakers in Congress and NC projected that the scheme was “devised by PDP for its members”. “Last year it was blessing in disguise because had the government given us the stocks it would have added to our losses because of surge in inventory,” Bukhari said. “But generally, when the scheme was at its peak we got 8000 tonnes from the government when we had our own purchases at 26000 mts.” While hurting the interests of a political opponent, the government is also playing with one of its viable public sector units.

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A journalist with seven years of working experience in Kashmir.

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