Profitability of apple farming: The crisis of apple farmers

Source: The post is based on the article “The crisis of apple farmers” published in The Hindu on 12^th September 2022.

Syllabus: GS 3 – Major crops-cropping patterns in various parts of the country.

Relevance: About the non-profitability of apple farming.

News: Apple growers in Himachal Pradesh are protesting due to the non-profitability of apple farming.

What are the reasons behind the non-profitability of apple farming?

In the 1970s and 1980s, the Himachal Pradesh provided a lot of support to apple production. Such as setting up nurseries and giving plants to farmers on a large scale, offering a transport subsidy on cartons, providing heavy concession on tools, etc. Land reforms restricted the transfer of land to non-agriculturist of Himachal Pradesh.

But in the 1990s, with rising fragmentation of land, low productivity and withdrawal of state support, apple agriculture became unsustainable.

This resulted in a) Increasing cost of apple production, b) Input cost of fertilizers, insecticides, and fungicides have risen by 300% in the last decade, c) Increase in the cost of apple cartons and trays and packaging. For example, increase in the Goods and Services Tax on cartons from 12% to 18%.

All this made farmers sell their produce to big buyers instead of selling it in the open market. The big growers have also started to shift from the conventional varieties to more genetically modified varieties called the spur, most of which are imported from European nations.

How does apple procurement by large players make apple farming non-profitable?

In the open market, the price of apple is decided on the basis of an apple carton. Large players do not buy apples in cartons; they procure them in plastic trays and decide the rate on the basis of a kilogramme.

Unlike in the open market, where apples of all varieties/grades are procured, the large players only procure apples of high quality. Such apples don’t constitute even 20%-30% of the total production in a harvest. Further, large players also bring in a substantial fall in procurement prices across the market.

Note: Jammu and Kashmir ensure legally guaranteed procurement at a Minimum Support Price. But in States such as Himachal Pradesh, the MSP is absent for apple farmers. 

What should be done to ensure the profitability of apple farming?

Formation of an independent body: A statutory body must be formed. Such a body should a) Have representatives of apple growers, market players, commission agents and the government, b) Conduct research in the apple economy, c) duly support and trusted by the farmers.