India: Kashmir apple industry in danger
The survey on “Marketing System and Price Spread of Apple in Kashmir," according to sources, will be released on April 17 by Chairman of NABARD Dr. Prakash Bakshi before its passage to the State Level Bankers Committee.
Burdened by the usury imposed by PHCs and CAs, the grower ekes out a marginal income despite the end-user in Delhi, Mumbai and Bangalore buying the product at three times the cost. The Kashmiri grower is constrained to sell the apples at just Rs. 40 or Rs. 45 a kilo – Rs. 5 more than his production cost — but the consumer in Mumbai pays between Rs. 90 and Rs. 120.
It has been pointed out that in flagrant violation of the Jammu and Kashmir Agricultural Produce Marketing Regulation Act of 1997, it is the grower in the valley who is forced to pay commission to the CA in Delhi for forwarding and trading of apples. The reverse is true in the rest of the country.
The local commission agents (and forwarding agents) of Kashmir have access to bank loans. They often lend it to the growers at a higher interest or charge a commission based on the value of apple sold, which at 12% is interest charged but goes by the name of commission charges.
“In this way banks are (indirectly) contributing to survival of the old traditional system of informal funding by commission agents; this malpractice by commission agents is responsible, the report suggest, for three types of damage to the apple economy:
(a) Encouraging an economic feudal system of lending by commission agents, ensuring grower dependency and lack of financial independence; (b) Misuse of bank capital for usurious lending by commission agents; (c) Encouraging continuation of an unmonitored system of captive orchard owners paying commission to commission agents in violation of APMC Act-1997 of J&K Govt.
“Over-dependence and exploitation of these growers in the market stems from their over-dependence on funding from the commission agents. These commission agents have devised ways of scuttling the approach of small growers (who are separated and independent) to the banks. Banks somehow find it more convenient to have business dealing with traders and commission agents than with small growers although from culture point of view both are locals and Kashmiri. It is apprehended by the study team that Apple Project of J&K Bank could possibly also meet the same problem if onward lending by commission agents/traders to small growers is not checked, which is not possible except through legislation or provision in the existing APMC Act," the survey has recommended.
“Industrial farming”, “contract farming” and “corporate farming” have been visualized among the futuristic solutions.
Source: thehindu.com
