Govt deal no lifesaver for Kashmir apple-growers, could leave them poorer

Centre's procurement deal through NAFED offers Kashmir apple farmers a lower rate than last year, while also changing the definitions of different categories.

Packed apples at the Sopore market | Photo: Praveen Jain | ThePrint

Srinagar: The Centre’s decision to procure Kashmir’s apple produce to prevent distress sales amid tensions in the Valley will put farmers at a disadvantage over conventional sales, ThePrint has learnt.  

With militants reportedly threatening traders against conducting business, and a public curfew in place against the decision to abrogate Article 370, tonnes of Kashmir’s famed apples, worth thousands of crores, faced the prospect of rotting or distress sale.

To guard against this, the Jammu and Kashmir administration, currently under Governor Satya Pal Malik, launched a market intervention scheme this week under which the National Agricultural Cooperative Marketing Federation of India (NAFED) will procure the apple harvest.

However, J&K administration sources said a kilogram of apples had been priced at Rs 52-54 (the higher price is for wooden-box packaging) under the NAFED deal, compared to Rs 60 last year. 

The horticulture department’s request for a price of Rs 70 per kg, which factored in a 5 per cent yearly increase, inflation and other market changes, was rejected, the sources added. 

Speaking to ThePrint Friday, NAFED chairman Dr Vijender Singh confirmed the information, saying the Rs 70 per kg demand was “unreasonable”.

According to the J&K administration sources, the deal had also tweaked the definition of quality apples in a way that would work to the detriment of farmers.

Unfair new yardstick

When up for sale at mandis, apples are divided into three categories, ‘A’, ‘B’ and ‘C’, where Grade A represents the best-quality fruit. 

The NAFED deal states that apples with more than 75 per cent colour will qualify as Grade A, while the yardstick, according to growers, generally ranges between 60 and 75 per cent. 

Apple farmers say the new yardstick is unfair. According to them, up to 40 per cent of Kashmir’s apple produce generally qualifies as Grade A, but the new rule will bring this number down.  

However, NAFED’s Singh denied this assessment, saying the deal will benefit apple-growers.

“The deal is not only between NAFED and the J&K government. The Ministry of Home Affairs, Ministry of Agriculture, all of them are involved too,” he said, “The pricing as well as grading were a unanimous decision of the central government, we are the serving agency.” 

J&K government blinked

Sources privy to discussions for the deal said negotiations between the J&K government and NAFED had come to a halt over pricing and grading, factors that could have grave consequences for the state’s Rs 8,000 crore horticulture industry.

According to the sources, it was the J&K government that had to eventually blink. 

NAFED representatives are said to have cited rates listed by the National Horticulture Board, which falls under the Union Ministry of Agriculture & Farmers’ Welfare, and discounted market surveys conducted by the J&K Horticulture Department in fruit mandis.

“The horticulture department cited market surveys conducted over the years on Kashmir fruit mandis… Because mandis are the places where trade is carried out, the rates there are the point of references,” said a J&K official. 

“Instead, they (NAFED representatives) took cognisance of rates set by the National Horticulture Board which governs apple produce across the country. Kashmir apples are far better in quality when compared to other states,” the official added. “This is a fact, not a belief.” 

“During negotiations, the J&K Horticulture Department tried to convince the NAFED people to raise the rates to 70 but they did not budge. The grading parameters were determined by them as well,” a second source said. 

The official said they had hoped NAFED would settle for Rs 65 per kg if not Rs 70, but that didn’t happen either.

Shockwaves in industry

According to official records, J&K produced 24.30 lakh metric tonnes of fruit last year, out of which 21.61 lakh metric tonnes were from Kashmir division. The apple harvest was estimated at 18.82 lakh metric tonnes.

About 33 lakh people or seven lakh families are directly or indirectly engaged in the fruit trade.

An apple-grower told ThePrint that, depending on its variety, a 17-18kg box of Grade A apples is sold for Rs 800-1,500, a cost that factors in profits for growers and dealers in Kashmir and traders at mandis in other parts of the country, and covers transportation, labour and other cultivation-related expenses. 

Given its potential impact on this season’s earnings, the NAFED deal has sent shockwaves across the industry.

“If the rates are low and if the definition of Grade A apples has been changed, how will it help growers and traders? Apples previously sold as Grade A will be sold as B and Grade B will be sold as C, which we mostly used to sell to apple juice plants,” said Bashir Ahmed Bashir, chairman of the Kashmir Valley Fruit Growers-cum-Dealers Union. “They are the only ones that seem to be benefiting the most.”

Other traders said the NAFED deal seemed to be aimed at dismantling “trading structures in Kashmir”.

‘It’s up to growers’

While announcing the market intervention scheme Thursday, J&K government spokesperson Rohit Kansal said the new rates were meant to incentivise stakeholders and prevent apple-growers from making distress sales. 

When asked about concerns over the scheme, Kansal said it was up to the growers to avail of it. “Those who do not wish to do so are free to go with old system,” he added.

NAFED chairman Singh said the deal will serve the interests of farmers, who “were being duped”. “I have headed several agricultural marketing boards in the past and I have a bitter experience of the traders,” he added. “They are the clever ones.”