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Apple Production in Himachal Pradesh: An Impending Crisis?

Apple production in Himachal Pradesh benefited hugely from state support in the 1970s and 1980s. Peasant movements were successful in raising the support prices for the apple crop in the early 1990s. Small landholdings and low productivity, coupled with the withdrawal of state support have raised the cost of production substantially, and denied remunerative prices to the poor and marginal growers. The entry of big private players, the deteriorating transport system, changes in the climate and absence of adequate insurance are all contributing to a major crisis in the apple economy.


Apple Production in Himachal Pradesh: An Impending Crisis?

Tikender Singh Panwar

and extension services (University of Horticulture and Forestry) in Nauni in Solan distric t, (3) opening up a large number of regional extension centres, (4) forming a society called HP Horticulture Produce, Marketing and Processing Corporation (HPMC) which entered the fruit processing

Apple production in Himachal Pradesh benefited hugely from state support in the 1970s and 1980s. Peasant movements were successful in raising the support prices for the apple crop in the early 1990s. Small landholdings and low productivity, coupled with the withdrawal of state support have raised the cost of production substantially, and denied remunerative prices to the poor and marginal growers. The entry of big private players, the deteriorating transport system, changes in the climate and absence of adequate insurance are all contributing to a major crisis in the apple economy.

Tikender Singh Panwar (tikender@gmail. com) is a political activist based in Himachal Pradesh.

pples constitute a major part of the economy of Himachal Pradesh, with a turnover of over Rs 3,000 crore and accounting for almost 10% of the gross state domestic product (GSDP). Apples were first brought into the country from Liverpool in 1838 and planted in Mussoorie. In 1850, the British planted some trees in the Nilgiri hills. In Himachal Pradesh, Captain R C Lee planted the first professionally managed orchard in 1870 in Bandrol in Kullu district. In Shimla – which now produces the largest quantity of apples – the first orchard was planted in 1887 in Mashobra, which is now owned by the state government and presently functions as a research centre. However, it was in 1918 that large-scale apple plantations first came up in Barubag in Kotgarh area, also called the apple bowl of the state.

Post-independence and especially after the statehood in 1971, there has been a strong backing from the state for apple plantations. Consequently, the area under apple cultivation has increased substantially from a mere 500 hectares (ha) in the 1950s to 81,630 ha in 2001-02 and further to 99,564 hectares in 2009-10. Of the total area under fruit production, apples make up more than 50%. Nine out of the 12 districts in the state now produce apples.

Apple Cultivation: State Support

The pre-liberalisation period experienced tremendous growth in apple production, backed by substantial support from the state. While this is not to undermine the efforts of the government, it was the massiv e peasant movement that demanded such a support system. Some of the measures taken by the state which have contributed to an increase in apple production are: (1) setting up a separate horticulture department, (2) establishing a separate university of horticulture for research

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sector apart from intervening in the market, (5) install ing a packaging carton factory with world class quality material at subsidised rates, (6) opening cold stores, packaging and grading stores, (7) setting up nurseries and giving plants to the farmers on a large-scale, (8) offering a transport subsidy on cartons, (9) offering heavy concession on tools like cutters, spray pumps hail nets, plastic trays, etc; and providing subsidy on fertilisers, insecticides and fungicides, (10) offering special monetary help for the poor and dalits to plant apple orchards, and (11) intervening in the market by opening subzi mandis. In addition, a support price under the market intervention scheme was offered to apple and other fruit producers in the state.

India is now the seventh largest producer of apples. Himachal Pradesh has the second largest apple production in the country (after Jammu and Kashmir), even though the state has the largest area under apple production.1

The total area under apples has now reached almost 1,00,000 ha. Shimla has the largest production of apples, followed by Kullu, Kinnaur, Mandi, Chamba, and Solan. According to the 1989 Horticulture Census, a total of 1,13,357 orchardists/ farmers throughout the state were engaged in apple production. This has now increased to more than 2,00,000. Data on size and class holdings reveal that 86% are marginal farmers (less than 1 ha), 10% are small farmers (1-2 ha), 3% are semi-medium farmers (2-4 ha) 0.5% are medium farmers (4-10 ha) and just 0.03% are large farmers (more than 10 ha). Thus the class composition comprises almost 90% poor and marginal peasants and a few middle peasants, with a minuscule of rich peasants and capitalist landlords. Further, it is interesting to note that nearly 25% of the marginal apple orchardists/farmers are dalits and nearly 5% tribals.2

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In the past, there has been a successful movement of the apple growers in the state. This has also been one of the major reasons for the initial investment by the government in this crucial sector. Two massive agitations took place across the political spectrum during the years 1987 and 1991. The primary demand was an increase in the support price of the apple crop. Though the Left initially built this movement, soon it went beyond their organisational strength and swelled enormously. Thousands of peasants participated, with women outnumbering the men. Calls for dehat (village bandh) were heard for the first time, and there was a complete shutdown in the countryside – not even a tea shop was kept open. Post offices and banks remained closed.

The state’s response was to suppress the movement, killing three peasant activists from Kotgarh in October 1991. This created a chain reaction in the days to come, and led to outrage and utter contempt for the state. The then chief minister (belonging to the Bharatiya Janata Party) lost in the mid-term election in 1993. This happened even though the area he contested from was not among the apple-growing regions of the state. This also resulted in an unprecedented victory for the CPI(M) from the Shimla urban constituency, which also happened to be leading the movement. The support price of apple, which was Rs 1.20 per kg before 1987, was finally increased to Rs 3.25 after the 1991 agitation.

Markers of an Impending Crisis

The landownership pattern in itself is a marker of the inherent crisis in the making. Land is scarce and productivity is very low in comparison to international standards. The attitude of the state of absolving itself of any responsibility has made matters worse. Not only has the state withdrawn from this sector, it has invited big players like the Adani Group to interplay in the market and even in production-related activities. Hence, small landholdings compounded with the withdrawal of state support have raised the cost of production substantially, and denied remunerative prices to the poor and marginal growers. The cost per hectare of cultivating apples in the state during 2011-12 as calculated by the HP Agro Economic Research Centre comes to be Rs 6.79 per kg. While this includes various variables like labour, material used and harvesting costs, it excludes the post-harvesting cost. The government offers a support price of Rs 5.25 per kg, i e, Rs 1.54 less than the cost of production, that too excluding the post-harvesting cost, which is about 25% of the total cost.

The present crisis is a result of both interna l and external factors. As mentioned earlier, the inherent cause is the nature of the landholding pattern in addition to the deteriorating quality of land. In most areas, soil productivity has decreased because of incessant use of the top soil. A section of the farmers are shifting to scientifically advanced methods to address this problem. A new dimension in this regard is also to replace the traditional varieties with the high-yielding varieties of the root stock. Though this improves productivity, it is a relatively high capital investment activity. Without the government’s intervention, this will be affordable only for the upper middle and rich peasants. Here the demands have to be so articulated that the poor and marginal peasants are also part of the changes to be brought about.

Withdrawal of State Support

The external factors that have perpetuated the crisis include the withdrawal of the state, the neo-liberal policies of opening of boundaries and signing of the Free Trade Agreements (FTA), the climate adversity, and so on. To elaborate on some of these factors:

  • (1) The central government is in the process of signing various kinds of FTAs with the European Union and other countries, and the apple crop will be one of the worst-affected. The lowering of the import duty from 45% to 35% and the efforts to bring it down to lower levels is likely to adversely affect the apple farmers since productivity is very low in comparison to other parts of the world. Further, apple growers in most developed countries enjoy high levels of subsidies from their respective governments.
  • (2) The state government recently closed down the Gumma carton factory under pressure from private carton cartels. The price of a carton box, which was earlier Rs 30-35, now costs the farmer around Rs 60. The buffer that this factory used to
  • provide in the market has been removed and the factory has been sold to a junk dealer.

  • (3) Changes in the climate have severel y affected the apple produce. Adequate chilling hours during winter followed by timely and sufficient rains and the absence of hail are prerequisites for the proper blooming of the crop. The government provides insurance cover for any deficit in the chilling hours, but ignores the loss due to hail that has become a regular and predominant feature of weather incursions over the years. Instead of focusing on subsidising anti-hail nets, the government is stressing on anti-hail guns which were installed last year but failed miserably owing to weak scientific support system like the GPS and radars. The estimated loss due to rampant hail in the apple growing region this year is estimated at Rs 500 crore.
  • (4) The menace of wild animals especially monkeys continues to be a major threat to the apple crop. The kisan organisations have mobilised the farmers several times to demand intervention of the government. In this regard, as an interim relief, the government had allowed selective culling of certain animals and monkeys. But the interference of animal rights groups got the order stayed from the state high court. The annual loss attributed to wild animals and monkeys has been estimated at Rs 2,000 crore.3
  • (5) The small and poor peasant is forced to sell the produce in the orchards itself. The private market players, in the absence of any intervention from the government, arbitrarily decide the price and the apple grower is forced to sell because of (a) nonavailability of compressed atmosphere (CA) stores, (b) absence of remunerative price mechanism, (c) bitter experiences over the years when the growers sold their fruit to the HPMC at the support price offere d by the government but the payments
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    due in previous years have not been made to such farmers. Now in the postliberalisation economy, big private players like Adani, Reliance, and ITC have also entered the market. Interestingly, the same government that makes noises about inadequate funds provides subsidy to these groups to install CA stores. The general myth that the entry of such players would alleviate poverty and fetch a better price for the growers has been completely demolished over the years of their presence. First, they buy only high grade produce, which, in any case gets a good price, the rest is either thrown away or the farmer is asked to carry the load back home. Further, despite having usurped large amounts of subsidies from the state, the CA stores that these big market players have opened do not allow the farmers to store their produce.

    (6) In the absence of railways, the only mode of transport for the produce is the road network. Over the years, the carriage freight has been unilaterally determined by the operators. For example, during the bumper crop last year, the freight fixed from Kotkahi to Delhi was Rs 45 per carton; however, the farmers in that particular area were forced to pay a freight charge of Rs 135 to Chandigarh, which is only half the distance to Delhi. For Delhi, the freight charge was Rs 250. The other major pre-requisite for fetching a good price is that the apple (or for that matter any fruit) produce must reach the market in a healthy and good condition, which in turn demands on the smooth transport of the crop. But due to poor infrastructure and neglect by the government, which has handed over the task of repairing the roads to private players, there was largescale bruising of the apple crop in the preceding year. Almost 90% of the roads are kuccha, i e, unmetalled, which become potted during the rainy season, in turn affecting the smooth transport of the crop. In the year 2010-11 nearly 30% of the crop perished on the roadside due to the blockade of link roads which were opened only when the apple season was over.

    It is against such a background that the apple growers have formed their organisation – the Himachal Pradesh Apple Growers Association (HPAGA) – in a massive convention held at Shimla. It has also given calls for mass mobilisation, protest and organisation building on demands such as clearing payments from previous years to growers, compensation to the farmers due to hail, 90% subsidy on hail nets, ending the 9% commission in Delhi subzi mandi, proper infrastructure and repair of roads, remunerative price for the apple crop, CA stores and processing units in block headquarters, subsidies for fertilisers, insecticides and fungicides, crop insurance cover in all blocks, proper maintenance of roads, and intervention in the transport of apples.


    1 Database of the National Horticulture Board, Ministry of Agriculture, Government of India, available at

    2 From a seminar paper “Challenges and Alternatives in the State in the Field of Horticulture” presented by Onkar Shad, Himachal Kisan Sabha in 1997.

    3 From the journal of State Resource Centre in Shimla and documents of Kheti Bachao Sangarsh Samiti.














    june 18, 2011 vol xlvi no 25

    Economic Political Weekly

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