BITTER HARVEST
Kashmir Life|January 21-27, 2021
The political turmoil of the past eighteen months has hit Kashmir’s apple industry hard. The entry of the NAFED and the import of duty-free Iranian apples through the Afghanistan route is being seen as interventions that will upset the apple-cart further, reports Yawar Hussain
Yawar Hussain

When Jammu and Kashmir administration signed a memorandum of understanding (MoU) with the National Agricultural Cooperative Marketing Federation of India (NAFED) in January 2020, it was expected to promote the state’s horticulture produce and take it to the global market. A year later, the NAFED has done little to help the apple farmers. On the contrary, it has shaken up already smooth and profitably functioning decades-old setup of the Rs 9000 crore worth horticulture industry. The entry of the duty-free Iranian apples through Afghanistan route has only further detracted from the profitability of the apple.

Kashmir’s apple growers who produce nearly 20 lakh metric tons of apples every year, more than two-third of India’s total apple production, have been expressing concerns about the issues that threaten the basic foundation of the apple industry in the coming years.

UPSETTING THE APPLE CART

When the NAFED was brought to Kashmir, it was expected to cover 5,500 hectares at a cost of Rs 1,700 crore in the next five years with a major focus on apple, walnut, cherry, pear and other significant horticulture produce. The Federation had to also set up 20 Farmer-Producer Organizations, one in each district in addition to three cold storage clusters, one each in the north and south Kashmir and one at Kathua, Jammu at a cost of Rs 500 crore.

Prior to the signing of the MoU, the Union Cabinet had given its nod to NAFED to buy 12 lakh tonnes of apples in Jammu and Kashmir in 2020. In 2019, the agency had managed to procure only about one per cent of its target of 13 lakh tonnes accounting for 15,770 tonnes of fruit valued at Rs 70 crore, according to the official data of the Ministry of Home Affairs.

In 2020, the Centre had allowed NAFED to use a government guarantee of Rs 2,500 crore and the losses incurred, if any, would be shared by the Centre and the Jammu and Kashmir administration on a 50:50 basis. Procurement had to be done directly from apple growers and the payment was to be made into their bank accounts via direct benefit transfers.

However, the local growers have suspicions about the NAFED. They think that the agency has been brought in to disrupt the existing local set-up, which for decades has been yielding profits for the rural Kashmir populace employed in the trade.

Former Finance Minister and noted economist Haseeb Drabu said he believes it is “problematic” if the NAFED becomes the sole marketing agency for Kashmir apple.

“In the recent union budget, the Finance Minister has announced monetization of almost all Public Sector Undertakings (PSU). But is it then that PSUs like NAFED are being brought in through backdoor into Jammu and Kashmir,” he said, asking why the NAFED is being made a key player in Kashmir’s crucial apple industry.

Questioning the marketing skills of PSUs, Drabu said that the government should provide at least one example of a semi-government company being successful at this job. He said the apple the industry of the Valley predates partition and has a network of its own which has been built for over 100 years.

“These networks are very important not just for economic purposes but for the larger social purpose also. If these are disturbed by coming in of the NAFED then that is going to be critical,” Drabu said, adding that the new networks would take “ages” to be built.

Drabu said he doesn’t have a problem if the NAFED builds infrastructure in the apple sector but the success story of apple in Kashmir valley is because the government never intervened.

“If there would have been government intervention in the apple industry, it would have never succeeded. It has always been a private enterprise,” he said adding the horticulture is the prime driver of the Kashmir economy. “More than seven lakh families are dependent on it which is 35 lakh people if the average size of the family is taken as five people. That is 1/3rd of the population of Jammu and Kashmir and nearly 50 per cent population of the Valley. That is in terms of just the share and the livelihood impact of it”.

In the larger context, he said, Jammu and Kashmir on its own is the 6th largest producer of apples in the world and by virtue of that India is the 5th largest producer in the world.

“India can become 2nd largest apple producer in the world in the next three to four years if everything is done right. This is how crucial Kashmir valley’s apple industry is,” Drabu said.

President Cold Storage Association Majid Aslam Wafai said that they don’t see the building of cold storage by the NAFED as a “threat” to the existing infrastructure in Kashmir.

“Let them come and set up storage facilities here. We won’t be sitting ducks. Our units are in the organized sector and we have full confidence in ourselves to fight any competition,” Wafai said, adding that their deliberations with the top-level officials of NAFED had put their fears to rest. “The NAFED has just a complementary role.”

DANGLING IMPORT SWORD

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