In a few months’ time, apple farmers in the Kashmir Valley would be gearing up for another cycle of flowering and fruiting of the cash crop. But, most likely, they will be weighed down by the thought of stacks of unsold crates of last year’s harvest sitting in the cold storages. Another bumper harvest later this year would result in an unprecedented glut that would be a recipe for economic ruin for the fruit cultivators. People in the Valley are wondering if there is a design to destroy more than a century-old Kashmiri apple industry and cripple the agriculture economy of the state in retribution for resisting the abrogation of Article 370 in August 2019.
Kashmir-based apple growers are facing a crisis due to the cheap imported Iranian variety that has flooded the market. Both big and marginal apple growers in the Valley are trying to find appropriate answers to understand the rationale behind the imports at the cost of domestic growers. It’s not only the Kashmiri growers who have been affected, orchardists in other major apple-growing states like Himachal Pradesh and Uttarakhand too have felt the sting of the illegal dumping of cheap imports.
Fayaz Ahmad, 58, a marginal apple grower from the Sopore district, is deeply worried. His harvest from last year is still sitting in the storage facility. In 2020, his crop was affected due to untimely snowfall and the year before that, the unrest and tensions in the aftermath of the abrogation of Article 370 resulted in accumulated losses. He was hoping to recoup a part of the loss last year. But the flood of the Iranian Red Delicious variety in the Indian market meant the demand for products from the Valley and other parts of India nosedived. More than 70% of apple orchardists in the new Union Territory are suffering a similar fate.
“I can’t sell my stock in the market as with the current price I won’t even recover my investment,” says Ahmad. “Iranian apples are so cheap compared to ours. So why would customers buy our produce? I can’t understand why this is happening because the government says we should focus on home-grown products but at the same time it is allowing this illegal import to destroy the apple industry in the country.”
Currently, Iran, reeling under US-led economic sanctions for its nuclear programme, is allowed to do restricted trading with other countries. India has imposed 70% import duty on apples and other fruit in order to protect the domestic sector. However, some of the big agro importers based in Delhi, Mumbai, and Gujarat have found a loophole in the regulation to ship Iranian apples through Afghanistan under the duty-free India-Afghanistan Free Trade Agreement. This illegal dumping over the past two years has created a demand glut, resulting in crashed prices for Indian produce.
Interestingly, all this happened right under the nose of the government, while it slept through the crisis. Kashmir’s economic lifeblood has been poisoned – first, due t0 decades of Pakistan-supported terrorism, and then by the disruptions caused by the abrogation of Article 370 on August 5, 2019. The latest crisis comes at a time when ordinary Kashmiris are looking towards New Delhi to build bridges of trust for economic revival in the state.
Too cheap to compete
The duty-free imported apples that are being dumped in India are sold in Delhi’s Azadpur Sabzi Mandi (the main wholesale market in the capital) at ₹35 to ₹40 per kg after factoring in transportation costs and agent commission, whereas Kashmiri apples command a price of ₹1,200 to ₹1,400 for a crate of 16 kg, which translates to ₹75 to ₹88 per kilo. “More than 1.5 crore crates are stored unsold in various cold storages across the state and around the same number of crates of small and marginal farmers are stored in their storage facilities in the villages since they cannot afford to transport their produce to proper cold storages,” says Bashir Ahmad Basheer, chairman, Kashmir Valley Fruit Growers Cum Dealers Union. “If we have to sell our produce then we would get a price of around ₹600 to ₹700 per crate, which means our farmers would make huge losses.
We have no option but to wait for the offseason. This illegal dumping of Iranian apples has become a big headache for us.”
In a normal year, the Kashmiri apple industry used to meet around 80% of the domestic demand, generating approximately ₹1,500 crore in revenues and contributing nearly 10% to the gross state domestic product (GSDP). At its peak, it used to export 20 lakh metric tonnes, which came down to 4.8 lakh metric tonnes in October 2019, following the communication blockade after Article 370 was abrogated, which resulted in the farmers not being able to connect with their traditional customers around the world for orders. The apple industry value chain provides direct and indirect employment to approximately 50 lakh people in the state, while the total horticulture economy of the state is estimated at ₹10,000 crore.
Further, unseasonal rains in October 2019, during the traditional harvest season, destroyed a significant amount of crops, resulting in losses for both big and marginal farmers. This supply vacuum made the situation ideal for Iranian imports. “Last year, we had a bumper harvest and the rates too have come down, therefore there is no need for imports. If these illegal imports are not stopped, this vital and healthy industry in Kashmir will also turn sick,” warns Basheer.
The flood of the Iranian Red Deliciousvariety in the Indian market meant the demand for produce from the Valley and other parts of India nosedived
According to the official figures available with the Department of Commerce, almost 30,369 tonnes of Iranian apples were imported into India between April and October 2021, but traders allege that the unofficial figures are many times higher. The Wagah border is the preferred port of entry for apples that come through Afghanistan, besides imports that originate from Dubai and Iranian ports.
“Traders here in Azadpur had staged a four-day protest in March 2020 against the Iranian imports,” Anil Dwivedi, general secretary of the Delhi-based Fresh Fruit Importers Association, told Tatsat Chronicle. “We even presented a memorandum to the authorities but nothing has happened so far.”
In August 2019, defending the scrapping of Article 370 in an address to the nation that was broadcast on radio and television across India, Prime Minister Narendra Modi said: “The colour of saffron or the taste of coffee from Jammu and Kashmir, be it the sweetness of the apple or the succulence of the apricot, be it Kashmiri shawls… they need to be spread worldwide.” But for the apple growers in Kashmir, it has been more than two years of bitter harvest. Recently, the Kashmir Valley Fruit Growers Cum Dealers Union wrote a letter to the PM seeking his personal intervention for protecting the industry, but are still awaiting a response. “We have written a letter to our prime minister about this crisis on January 4 and also reminded him of his most ambitious project, Make in India, but we have not received any reply from his office,” says Basheer. Highlighting the plight of the apple growers, the union’s letter reads: “Several fruit traders have dumped Iranian apples arriving via Afghanistan and Dubai in the country. This situation has put the whole fruit industry in J&K and Himachal Pradesh in a very precarious situation.”
Recently, the Kashmir Valley Fruit Growers Cum Dealers Union wrote a letter to the PM seeking his personal intervention for protecting the industry
In 2018, after the US pulled out from the nuclear deal, the then president, Donald Trump, re-imposed sanctions against Iran for alleged violation of the terms of the 2015 agreement. But it allowed Iran to export limited quantities of oil. India, after China, is the second biggest importer of Iranian crude and has a deep interest in having healthy ties with the Persian Gulf country since it offers access to energy-rich Central Asia. India has also invested heavily in Iran’s Chabahar Port, which provides a gateway to European and Russian markets. Located in southwest Iran on the Gulf of Oman, the port also offers India an alternative route into Afghanistan, where it has deep strategic interests. India’s geostrategic stake in keeping Iran in good humour increased significantly after the Taliban takeover of Afghanistan in August last year. Similarly, the India-Afghanistan Free Trade Agreement was intended to deepen ties with the landlocked country and serve as a pressure point on Pakistan. Unfortunately, the domestic apple industry in the process suffered collateral damage.
Many farmers in Kashmir believe that the Indian government is deliberately and systemically trying to destroy the economic backbone of the state since the people have not welcomed the abrogation of Article 370. “This feeling is very much here,” says Ahmad. “Most of the people here feel that the central government is doing it deliberately and it wants to destroy us economically.” However, this sounds more like a conspiracy theory because apple growers from Himachal Pradesh and Uttarakhand have been equally impacted by the cheap Iranian imports.
Forming a united front
In January, a joint forum of apple growers from Kashmir, Himachal Pradesh and Uttarakhand submitted a representation to the union minister for agriculture and farmers’ welfare, Narendra Singh Tomar. “Take this communication as an SOS message from the farmers. We demand an immediate ban should be imposed on the import of apples from Iran and the duty for other imported apples be raised to 100% with a minimum billing of $1/kg for calculation of duty to avoid dumping of produce in our country,” they wrote in the letter.
Apple farmers from all three states are still waiting for a response from the central government. Harish Chauhan, the convener of the Hill State Horticulture Forum, which comprises apple growers of Himachal, Kashmir, and Uttarakhand, was quoted by The Hindu as saying, “If the storage option becomes unviable, the entire fruit will come to the market, leading to a glut and slump in prices.” At a time when hate crimes against Muslims and other minorities are rising, this is the second time in recent years that Hindus and Muslims in Kashmir have come together in an attempt to protect their economic interests. In 2016, cricket bat manufacturers from Meerut and Jalandhar lobbied with the central government to lift the ban on the export of Kashmir willow clefts. It would have spelt the death knell for the local industry. A partial ban on the export of Kashmir willow outside the state was imposed in 1999 and was upgraded into the J&K Willow (Prohibition on Export and Movement) Act, 2002, which bars cross-border trade of the precious wood. This was done to protect the interests of the small cricket bat manufacturers in J&K.
In early 2017, the BJP MLA from Basohli constituency in Jammu, Lal Singh, who was also the minister for forest, environment and ecology in the PDP-BJP government, tried to dilute the ban, allegedly at the behest of bat manufacturers from outside the state. At that time, Bansi Lal Gupta, president of the Jammu Bat Manufacturers Association, led the protest on behalf of willow growers and bat manufacturers, both in the Valley and Jammu, against the forest minister. Businessmen from both communities mounted so much pressure that the J&K government stopped in its tracks, realising the potential damage to the political capital of the two parties if the ban on exports was lifted. Apple growers in J&K are considering building a similar coalition with farmers from other states to form a joint front against the illegal dumping of the Iranian variety.
The writer is a Delhi-based freelance investigative journalist