Is Rs 2500-3000 price for an apple box sustainable and justified?

Apple being sold in Shimla Fruit Mandi
Apple being sold in Shimla Fruit Mandi. (Pic by Deepak Bhaik)

I don’t know where exactly to start and how to organize these random strings of thoughts about the ongoing apple season. We rest it on the market forces, but in all, the hefty price tag of Rs 2500-3000/- for an apple box looks out of the box, exaggerated, unsustainable and a planned market stunt. None of the people involved the Growers, Commission agents and the Buyers benefit from such stunts. But needless to say, the lure of the money is such, and we can’t really help ourselves.

Whatever goes up comes down. You call it market economy, the demand supply paradigm or just making fool of the greedy lot, to be precise, it’s all happening to the apple growers of HP. Where are the market standards and ethical practices? It doesn’t really make a sense for anyone when fruit markets, especially Apple’s, start behaving exactly like Stock markets.

Believe me, last one week have been a roller coaster ride for the not so fortunate apple growers. Before coming to the real reason behind how and why it really happened, let me ask these very growers, agents and buyers a few imperative questions.

Does size matters? How did the high grade trend start? Is the grower to be blamed or the Commission agents?

Does weight matters? Why a standard carton designed for 20-22 kgs is being over-packed with 30-32 kgs and how much really does a Growers gain from it?

Does colour matters? Well, growers have the solution. No wonder we are simultaneously plucking apples at 5000 feets and 8000 feets height as well.

Does rate matters? Well, commission agents have the solutions. They know when its the right time to make up for the losses made in stashing out extraordinary prices for low quality apples in beginning of the season.

These quick fixes in turn are regulating and controlling the monstrous market dynamics irrespective of quality, size and colour of apples and which with time is turning hard to bear for all growers. Especially the ones who have seen the markets plummet for last one week. The average market now stands at almost 1/2 of its actual deserving rate of a week ago. Eid holidays are to be blamed as most of Ladani’s are back home for celebrations. This is an opportunity in disguise, rather a well planned and fabricated one by the commission agents and ladanis. Or else how can a grower sell his apples at the rates of potatoes. Beyond Eid it has something to do with monopolistic and luring tactics of Commission agents.

15th August every year is the deadline for such a market fall which turns all growers of middle-high and higher belts with good quality apples to reschedule and re-plan their harvest and marketing strategy. For commission agents it’s the perfect time to cash in on the good quality apples by offering much lower price and stack the produce in cold stores. One must understand that the shell life and quality of apples is directly proportional to the altitude, owing to better snowfall and adequate chilling hours available.

This is one reason why Reliance Agro Fresh, ITC and Adani Agro etc. starts procurement only after 15th and 20th August.

Kharapathar Mandi

Inauguration of Kharapathar Market turned out to be a political stunt, but a failed one. If Govt. ever planned to gain the confidence of its vote banks of the area, Kharapathar market should have been operational this year itself rather than waiting for post election Apple Seasons of 2013.

Are people of the area so ignorant to have possibly been taken astride by the Rs. 5100/- a box rate? Is that enough to lure growers and in turn get robbed by the commission agents? It was indeed a show-off and nothing else. Did the Grower in question ever receive the payment at the announced rate? One must find that.

The Road to Perdition
In a way the pre Apples Season inaugurations, a host of them in a row, by our top Minister are nothing more than a political stunt and the main root of all ills for Jubbal-Kotkhai and Rohru belts the so called Mecca of apple production SH-10 is still lingering in patch works for last ten years. If people remember, even Pre Longjian (So called Chinese company) the widening work of SH-10 was being executed by Indian agencies since 2003-04. So in a nut shell what we still have is a 70 kms stretch in pathetic condition nowhere nearing sign of completion, as we gallop to complete almost a decade. Thumbs up for the Apple money and the unwarranted patience and stamina of people to bear the rot of political and bureaucratic will. It’s a sweet fruit of the rampant ignorance and docile attitude of apples growers. And, I do believe that the work will still be incomplete even after next Govt. completes its tenure in 2018.

Why shouldn’t our own Government be questioned or even sued for the lethargy, negligence and the mess it has created out of this World Bank Funded project? Why not?

Why shouldn’t the Rs 700 Cr loss (90% loss was in Jubbal-Kotkhai and Rohru belts being served by SH-10) suffered by apples growers of the state in 2010, be loaded on the agencies involved in the project? Why not?

One must remember that the project cost was only Rs 227 crores when it was launched. Perhaps, ever since its inception, the project road has resulted in cumulative losses of more than 1000 crores to growers, I assume. We all for sure are losing a bit of our hard earned money and patience and need a collective vent to appraise this Govt. that all we mean and want is development, timely delivery of a quality infrastructure and not some unimaginable mess to linger for decades, for generations. Our time and resources have some values and given our rights we deserve a better road and not some rot of your inefficiency, corruption and mismanagement.

Yet we humble growers are still reeling under the same back breaking journey, endless jams, loss of our apples , loss of time and money, day after day, year after year. Are we waiting like some meek spectators for some miracle of happen overnight and drive on the road the very next day? Well in that case we are utterly optimistic, yet pompously wrong. Or on the other hand, do we, as a society, as collective citizens, can strive to make it happen in a year?

It can only be done if and only if, state Govt. especially the PWD department take all the string in its control, rather than acting as an outsider agency which it has turned, proved and claimed time and again. In the name of World Bank, how long we can wait to drive on a fully functional road? May be a few more decades, I guess, as current status suggests.

All we need is to take cabinet approval to cancel the World Bank project within a fortnight and award the project to a shortlisted capable Indian agency within a month with clear-cut mandate and achievable milestones, which if skipped should result in heavy penalties and a before time completion should be suitably rewarded as well. And above all, give a free hand to an honest young and dynamic bureaucrat to manage, execute and monitor this project. (Do we have such young dynamic bureaucrats?) This is the need of the hour for all the growers and residents of the region to make up for the loss of decade.

Rate Dynamics
Also, aligned with a few major yet pertinent market reforms, there is dire need to bring all the major Apple Mandi’s on the same basic platform. Especially, the Single Rate Mechanism of most of the markets in north and the Rate Slab along with Commission of Delhi, Mumbai, Kolkata and Chennai Markets needs due consideration and rationalization in time. The current markets, especially of ‘Single Rate’ are being governed by some invisible hands of commission agents and ladanis. To be honest and critical, the produce rate varies with one’s farm size even if a small grower has better quality apples than the big ones. If such discrimination are to be avoided apple market need reforms with immediate effect.

And above all the solutions I mentioned for ‘Colour’, ‘Size’ and ‘Rate’ above are to be avoided. We are talking about apples and not about stock markets and here demand & supply and rate stabilization need to be controlled from village level and that can only happen if and only if ethereal sprayed apple is banned altogether. Let the apples grow naturally and the demand & supply and erratic rate movements and fluctuations will naturally take care of itself.

If insiders are to be believed a host of commission agents have gone broke and shut operations at various Mandis only by offering and sustaining ‘over the top’ and exaggerated rates to growers. Even the ladani’s are hit by such offers and on the receiving end a pretty bunch of growers are yet to receive sale proceeds from last season even. Once again I would like to ask, Is Rs 2500-3000 for an apple box sustainable and justified?

If at all there is a way out.
I hope, all apple growers and residents of the affected region do understand and appreciate, what the value of time, as long as a decade, in 21st century is? Or are we waiting for maladies of 2010 season to repeat in 2013 with a likely record apple production forecast (considering the production cycle) complemented by a sorry state of SH-10? Perhaps, it might really happen and apple will be dirt cheap and rotting on every bend of the roads and nalah of this 70 kms stretch from Chaila to Rohru, just like season of year 2010.

Need of the hour is a formulation of a ‘Comprehensive Master Plan’ for managing our apple produce foreseeing the evolving trends of apple trading practices at regional, state and national level. The production in different blocks, transportation mechanisms, consumption patterns and import-exports needs to be studied in depth for charting out a better management plan for demand-supply chain and to control the market dynamics.

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7 Responses to "Is Rs 2500-3000 price for an apple box sustainable and justified?"

  1. NITYIN   August 23, 2012 at 11:39 am

    5100/ for apple box in Kharapathar was a joke. I heard it was just one single box which was sold for this rate in the presence of the Hon MP. I wonder what he had to say about the road conditions there?

    Reply
    • Vikram Singh Thakur   August 23, 2012 at 6:21 pm

      Grapewine has it…. It was more than one ,but the guy never got the money and after a big fight was able to recover some…

      Reply
  2. Vikram Singh Thakur   August 23, 2012 at 6:47 pm

    Tres bien, Monsieur Bonjour…. You have done well in stringing together a range of issues. I believe, the prices above 2k are neither sustainable nor desirable. We are one of the last markets in the world (due to our demographics) where farmer can make money at production levels of 300 boxes per acre.
    With high whole sale prices, we will price-out the the middle class, which is more than the population of United States. We need to keep our target market alive. Though as a short term measure it is lucrative and i would sell my produce for that price any day :0)…
    Also, the mono-culture of delicious is killing our industry in a two fold way:
    a. Its the worst performing apple variety in the world in terms of yield potential i.e. too many crop failures cos it is a very shy a bearer.
    b. The concentration of produce sent to market in a very short window.
    The second can be managed with some innovative thinking and cooperative work. Farmers cooperatives need to take shape and control supply and marketing by holding up crop at local CA stores and releasing in lots. Economies of scale to mass grade fruit for even better product differentiation and longer lasting supply position. Transporting to where the price is right and spread out the supply side. However, there is a big risk due to poor post-harvest techniques (namely the telescopic box), which makes the produce even more perishable. It is still 100 times better than growing mangoes…
    I think we are in for a massive shake up after some competition gets injected into the system. Like the car industry, wherein, we kept driving 1950s cars with a lot of pride till Maruti came around and changed the landscape. Necessity is the mother of invention. Currently, there is no necessity or desperation due to lack market or product differentiation and our supply chain and way of working are worst than Indus Valley Civilization… The silver lining is 2014, higher competition from NZ, US will work for us. China won’t be able to compete to begin with. The chinese volumes are phenomenal but their target market is conentrate and world juice markets, therefore less of our varities are available to be exported.
    I foresee Gala, Fuji and Honeycrisp will make inroads into the Indian market. They are much better to eat for a much longer life span. They will be slightly cheaper i.e. middle and lower middle class will take up that space and most importantly, they are very regular and heavily cropping apples i.e. the grower’s margins will come from volumes. The NPV and IRR of variities that sell at 40% of delicious but produce 30% more an regular basis is much higher. Being a khadu family, we never eat (or like) Red Delicious and its cousins, its always, Gala, Honeycrisp and even Braeburn tastes better than the run of the mill delicious (including spur sports).
    In a nutshell, thinking people like yourself and the coming generation will change the landscape of apple farming and it will move from stone age model to industrial model. Unfortunately, it will lead to a lot of casualitities of farmers who can’t invest capital to adapt but it will be a necessary evil very soon.
    Till then, Au Revoir, keep writing and more importantly – thinking.
    Cheers, Vikram

    Reply
    • bonjour   August 24, 2012 at 12:31 am

      Tres bien Mr. Vikram.
      Your expert analysis is a great deal elaborate on the whole apple industry at Global panorama. It has added a great deal of value to reader’s knowledge. Thanks for same.
      Regards.
      Bonjour

      Reply
  3. Yashwant Singh Negi   August 23, 2012 at 8:10 pm

    Really , this issue is a most pertinent and thought provoking to us all.
    For decades these commission agents have been looting the naive and
    innocent apple growers. Of late the growers were almost getting able to
    come out of the shackles of these exploiting commission agents. But see
    the new tactics of adopting such stunt – shooting up the apple prices
    and letting it to nose-dive – they have made the apple growers of
    Himachal an easy prey again. Your blog/article is thought provoking –
    Weldone ! we all must endeavor to learn as how to protect ourselves
    against such blatant exploitation, and even go further – as how to out
    smart these exploiting market forces and and factors and get our
    reasonable due.

    Reply
  4. NITYIN   August 23, 2012 at 10:50 pm

    Another major reason for the glut in the market is due to the late start of apple season in lower belts due to less rains. As a result, apple from low and middle belts reached the market in same time creating the glut. Add to this the foreign apple selling cheaper is also a cause of concern for apple growers

    Reply
    • bonjour   August 24, 2012 at 12:47 am

      If the production estimate figures are to be believed, this year it is likely to touch 2.5 Crore boxes at the max, which is just about 30-35% higher than last year’s production figure and about half of year 2010. Considering the arrival rate there seems to to be no real glut, rather a created one, a phobia created by Commission agents and Ladanis.
      Last year after shelving out exorbitant rates to us, lead importers in south ended up buying Chinese apples in bulk to meet the home demand. But it is learned from sources that Chines sent in containers after containers of apples, half of which rot even before reaching India. Chinese are smart. They take payment in advance for all Indian deals. So where are the Indian importers going to make up for the loses incurred in China?……:)
      Definitely in home market like ours, which is just like a trade wind, without any head and tail and fair market regulations and controls to check such manipulations.

      Reply

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