Posts Tagged ‘National Bank for Agriculture and Rural Development’

DNA Special: Agents decide how much you will pay for Kashmiri apples

Published: Monday, Apr 1, 2013,
By Sandeep Pai | Place: New Delhi | Agency: DNA

Have you ever wondered why Kashmiri apple costs Rs 105/kg in Delhi, Rs110/kg in Mumbai and Rs 120/kg in Bangalore even though its production cost is just about Rs 35/kg? It’s all thanks to agents who on the one hand rob the orchard owners of their earnings and fleece the customers on the other.

Commission agents in major cities such as Delhi manipulate the market and hoard apple to create artificial scarcity and sell it at a high price. For this, they resort to self-buying – they themselves buy the apple in their own name or their men instead of selling it to market immediately.

The draft report of the National Bank for Agriculture and Rural Development (NABARD) on production and marketing of apple in Jammu and Kashmir – a copy of it is exclusively available with DNA– says, “Supply is manipulated in artificial manner generally at agents level through hoarding of apple in cold stores for short duration and controlled atmosphere stores (CAS) for long duration up to 6-9 months.”

The report says that if a kilo of apple is sold at Rs 100 in market, the grower gets only Rs 26, while the rest goes to retailers and agents.

The commission agents start self buying the apple in July/August, the report says. In Azadpur mandi, around 20% of these agents are big, 20% small and 60% medium in terms of 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 agents like ‘fixed match’,” the report says.
Once the auction is manipulated and the apple is bought at a cheap rate, the agents store it in the CAS units to manipulate the supply in market. According to the NABARD report, agents are now setting up cold stores and CAS to store self purchased apple from market.

Read more here –