(Weekly Organ of the Communist Party of India (Marxist)
May 12, 2013
JAMMU & KASHMIR
NABARD Exposes How Apple Growers Are Fleeced
ONE may be cursing the growers when one pays a high price for Kashmiri apples, wondering what share of the money the orchard owners would be receiving. But the reality is that the apple growers don’t even know the price at which the fruit is sold in the mainland, leave alone reaping profits.
Then, where does the
money go? Into the pockets of
commission agents, who, sitting in
last 50 years the commission agents
UNDUE ADVANTAGE OF
CASH STARVED GROWERS
report by the National Bank for
Agriculture and Rural Development (NABARD) on
the apple of
“In the absence of proper financing mechanism, informal credit and output (apple) markets are interlocked in such a way that CA’s [Delhi based and others] take undue advantage of the cash starved growers with the help of their pre-harvest contractors (PHCs) to make them captive supplier of apple.”
means a local agent of the
The modus operandi of a CA is that he gives advance money to a grower through a PHC in the month of March or April and then makes him sell his produce to the former. The season of harvest of Kashmiri apple starts from July, picks up by the end of August, its supply increases in October and reaches at peak in November. The NABARD report said that the feudal type of captivity of a grower’s produce in the hands of a CA through a PHC spells doom for their economic fortunes in the market. “He is bound to sell his produce through the same CA in the market and to the buyer which is decided and dictated by manipulation of circumstances by CA’s only,” the report added.
four decades period between 1950
to 1990, almost the entire production of apple from Kashmir
valley had its
destination in Azadpur market of
Although a CA
promises to a captive
grower a “lucrative and best possible” price, it
is not so in
actuality. This was the condition existing 50 years ago and
it exists even
today. A captive grower is informed over telephone from
After selling the growers’ produce, the advance money given, the transportation cost etc and a commission of 12 per cent is deducted from the sale of apples by the CA and the rest is given to the orchard owners. A visit to and interactions with the apple growers of North and South Kashmir revealed that the growers receive lesser money than the market price and are living in debt. “We don’t know at what amount per peti the CA of Delhi sold my product in market. We are completely dependent on them and have to agree to them,” said Abdul Qayoom Bhatt of Biner village in Baramullah district who is in a debt of Rs 50,000 due to the low prices paid.
Worse, in complete contravention of the Agricultural Product Marketing Committee (APMC) Act, the CA charges a commission from the seller. “.....CA is allowed to charge commission from buyer (not seller) as per the act. However, in practice it was generally observed that CA charged commission from sellers (growers) @ 6-12 per cent. This practice has been continuing since 1950s.....”
of banks in providing
institutional finance to small growers of
The NABARD report pointed out that during 2010-11, a finance of Rs 1200 crore was provided to the apple growers of J&K, of which merely Rs 200 crore was the share of all banks taken together excluding the J&K Bank with its ‘Apple Project.’ The total amount provided by traders, dealers and CAs as advance to the apple growers of Kashmir during 2010-11 was Rs 1024 crore, of which the CAs based in Delhi, Kashmir and rest of India financed Rs 645 crore (63 per cent), Rs 207 crore (20 per cent) and Rs 172 crore (17 per cent) respectively.
A more or less equal amount was financed in the next year, 2011-12, said the NABARD report. Paradoxically, banks have been providing credit to Kashmir CAs who indulge in onward lending to the cash starved growers, causing continuation of the medieval practice of their ruthless, continued over-dependence on CAs, the report added.
As per the
NABARD’s draft report, the “CA(s)
The rate of
interest charged by
While, banks are sceptical of giving loans to growers, the apple cooperative marketing societies in J&K, which were once benefiting the growers, have failed for the want of intervention by the state government. The NABARD report said, “…..the collective might of CAs in Delhi Azadpur market and unfair trading practices had led to the economic failure of over 250 cooperative marketing societies. They met with delayed payments and forfeited payments under the conditions in which CAs got themselves declared insolvent and bankrupt from the courts.” Out of a total of 256 growers’ societies, which were set up by the state government from 1971 and afterwards, only two have survived.
reason why growers are completely
dependent on the CAs is because apple
is a perishable product and
lack of cold storage faculties makes their produce
vulnerable. Except Narwal market in
The CAs of Delhi and other parts of the country not only cheat the apple growers of J&K, but also indulge in market manipulation and hoarding in order to sell the produce later at higher rates, thus picking the consumers’ pockets across the country.
The CAs bring the apples from the orchard owners, indulge in ‘self-buying’ of these apples and store them in cold storages in order to create an artificial scarcity so as to finally sell the produce exorbitant rates. It is the consumers who finally suffer due to such high prices.
The NABARD report said, “Supply is manipulated in artificial manner generally at CAs level through hoarding of apple in cold stores for short duration and controlled atmosphere stores (CAS) for long duration up to 6-9 months.”
Big CAs are increasingly engaging in self-buying either in their own names of their own men. The process starts in July or August and goes up to October, the NABARD report said. Around 20 per cent of these CAs are big sharks, 20 per cent are small ones and 60 per cent are in between in terms of the turnover and financial power. “Price manipulation takes place by artificially quoting price so high so as to attempt exclusion of other smaller buyers from auction and then bringing it down next day/next time to self-buy at whatever price, mostly reduced price because bigger “lots” of boxes cannot be purchased by smaller buyers even if price is low,” the report said.
Even large open auctions are manipulated. “Largely, open auction takes the shape of self-buying or buying by market functionaries of CAs, like (a) ‘fixed match,’ the report said.
Once the auction is manipulated and apples are bought at cheap rates, the CAs store them in the CAS units for some time in order to artificially manipulate supply. As per the NABARD report, CAs are now setting up cold stores and CAS with the motive of storing the self-purchased apples from market.
existence of seven cold storages within
Azadpur market yard of Delhi and about 100 CAS at Kundli in
Haryana (25 km from
Azadpur market) is leading to sort of “hoarding” of Kashmir
apple before it
enters Delhi market for auction,” the report
added. Incidentally, the