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Cheaper Imports Dent Himachal Pradesh's Apple Business

Date 14-May-2014
Subject Cheaper Imports Dent Himachal Pradesh's Apple Business

Not long after quitting a lucrative job at Dell Systems to nurture his fruit orchards in Shimla, Kunaal Singh Thalta is having second thoughts. Fruit buyers are increasingly flocking to cheaper and better quality imports, often giving his farm-fresh apples a miss.

Himachal's Rs 2,500-crore apple industry, which accounts for more than 6% of the state's GDP and supports more than half of its rural population across six districts, is facing stiff challenge from better quality imports that are often competitively priced.

The consequent rise in fruit imports has not just hit the local economy, but is also forcing the newer generation to move away from this traditional occupation. And folks like Thalta, who have ventured into fruit farming, are feeling let down, as the issue finds no mention in the going elections.

"Apples are no longer delivering similar returns, which is making the business unviable as imported fruits are getting preference," Thalta, who is often chided by family members for his leap of faith, told ET. "No political party seems to care and raise the issue."

In this hilly state, incomes of local fruit growers had soared after the economic liberalisation of the 90s, but farmers gradually lost the momentum in the absence of a consistent policy and infrastructure. They now find it difficult to compete with the big companies that import apples in bulk every year.

While the Congress is seen as an ally of Himachal's apple growers, the party has not provided a roadmap for resolving their problem. Party spokesperson Subash Manglate said there was a need to improve the quality of Himachali apples, but failed to say how that could be achieved.

Congress also faces criticism for the UPA government's decision to halve import duty to 50%, which is widely seen as the main reason for imports multiplying in the last one decade.

According to the commerce ministry's estimates, import of apples touched an all-time high of about Rs 1,500 crore in 2013-14. "Not much has changed in the past 10 years, except for the Chinese apples that sell in every part of the country all year round, unlike the domestic produce that is available for only five months," said Rajeev Chauhan of Himalayan Apple Growers Society, a non-profit body. According to Chauhan, China has utilised the South Asia Free Trade Agreement to evade the 50% import duty to dump its apples at cheap rates in India via Sri Lanka.

Experts say the quality of Himachal's apples has deteriorated partly due to the poor quality of subsidised fertilizers that the government supplies. Adding to farmers' woes is the absence of new plants. "Most of the apple varieties grown in India are almost a century old. How can we compete with the superior imported stuff that has longer shelf life and is more appealing," said Dixit Chauhan, who quit a marketing job at Dabur India to help out in the family's apple business in Chajpur, a remote village of Shimla.

Faced with policy issues and an apparent lack of political will, the state's younger generation has started importing new plants from overseas nurseries situated in Italy, France, South Africa and the US. "The government has failed to change the first generation orchards that are running on old trees and are highly susceptible to disease.

To increase returns, we have to start the second generation orchards by breeding highquality fruits as successive governments have failed modernise farmers," said Vijay Thakur, an orchardist-turned-hotelier from Manali. "There is no concrete policy even as three of the five chief ministers were apple growers themselves." Indian apple growers have a higher cost of production compared with their Chinese or Australian counterparts.While it is about Rs 15 per kg in India, it is Rs 8 per kg in China and about Rs 10 per kg in Australia.

Source : economictimes.indiatimes.com

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