Private players and fruits of farm labour

Ever wondered why there is no agrarian crisis or farmer suicides in Himachal Pradesh? The farmers here are as much affected by the vagaries of unpredictable weather and climate change, yet they seem to survive well despite reportedly bad apple harvests for three successive years.

While it is a fact that fruits, as a category, are an expensive and valuable product, a small revolution by a new breed of organised corporate players and buyers is changing the lives and fortunes of apple and other fruit growers by bringing in refreshing changes in the way fruits are bought and sold in the country.

Till a few years ago, under the APMC (Agriculture Produce Marketing Committee) Act, farmers could sell their produce only through Licensed Commission Agents in the ubiquitous ‘mandis’ in each district. This was ostensibly to prevent rapacious middle men or agents from robbing the farmer’s hard earned true value of their produce.

Unfortunately, this noble objective was seldom met and the commission agents started exploiting their position. So after many studies, the Union government suggested the states to modify the APMC Act.

Being a state subject, some states — notably Himachal Pradesh, Rajasthan and Maharashtra — took the bold step to permit private players into this space reserved for mandis. Resultantly, entities such as Allfresh, Adani Agrifresh, Dev Bhumi, etc have set up shop in fruit growing areas, starting with apples, in the last few years.

About 10 years ago, average realisation of an apple farmer was about Rs 10-15 per kg. Now it is rarely below Rs 50-55 per kg. Typically, apples bought at Rs 50-55 per kg end up being sold in retail at Rs 110 per kg, while oranges which earn the farmer Rs 20 per kg sell at Rs 45 per kg in shops mainly on account of higher incidence of spoilage and short shelf-life in oranges.

However, Indian productivity is fairly low. The average yields per hectare of 15 to 16 tonnes of Indian orchards compares poorly with 55 to 60 tonnes in orchards abroad such as Egypt, Spain, China, etc.

Similarly, Indian orchards produce 10 tonnes of apples per hectare while some orchards abroad produce as much as 70 tonne per hectare. This is the reason the Washington apples, coming all the way from west coast of the US are cheaper than the Indian Himachal apples, and the government has to impose 50% duty to protect Indian farmers.

While agricultural universities have some knowledge in improving the productivity and quality of the produce, they have failed to reach out to farmers, or at best have succeeded partially.

Government programmes have helped farmers where the MSP (Minimum Selling Price) has been announced, particularly for grains. However, the returns for farmers can be much higher in horticulture produce which is perishable but there is less government support.

Post-harvest process

Unlike the commission agents in mandis, the private companies buy the produce at centres near the farms and then move it as quickly as possible into refrigerated rooms, mostly in refrigerated trucks.

In addition to the cold storage which keeps the fruits at around 3 degrees Celsius, the atmosphere in these chambers is controlled, being leached of carbon dioxide and ethylene (produced naturally by fruits as they ripen), and replacing oxygen with nitrogen to eliminate oxidation and resultant spoilage of fruits.

Over the last half a decade or so, companies like Allfresh have gained considerable insight and experience, as well as industry specific knowledge in the areas of quality assurance, wastage and cost points. Strategic issues such a price fluctuation patterns have been also been fully grasped.

Further, processing centres are where the action is. These are the places where the best possible post-harvest technologies are used. All fruits are first washed, sorted for size and colour, before some of them like oranges are waxed to seal the moisture in to ensure longevity and freshness.

Presently, almost three lakh MT (million tonnes) of apples and 50,000 MT of oranges are being imported. With improved farm productivity, pack-house mechanisation and processing under scientific conditions, this can be substituted by local produce, thereby saving precious foreign exchange.

A network of over 125 pan-India general trade distributors and commission agents, as well as interface with all modern retail chain buyers on one end, and regular and direct touch with over 350 apple and 600 orange farmers on the other, keeps the “farm-to-fork” chain alive and kicking.

(The writer is former member, Railway Board)