NZ apple growers help transform India's apple industry

Monday 16th March 2015

Pipfruit New Zealand, the pipfruit growers' organisation, is working on a plan to help revitalise a key part of India’s declining apple industry with the long term aim of having a tariff free window for Kiwi apple exports

India’s apple industry is the fourth largest in the world by volume and the second largest by land area but grower returns are starting to decline as production drops because of ageing trees and pest and disease issues.

Pipfruit New Zealand is taking the lead on the World Bank project and along with the crown research institute Plant & Food Research, is now applying its expertise to a plan to rejuvenate apple growing in the state of Himachal Pradesh, one of India’s three main growing areas. The state has pre-approval for a US$160 million World Bank loan to implement the seven year project among its 250,000 apple growers.

The New Zealand apple industry is seen as world leading, having already rejuvenated itself pre and post deregulation in 2001. The industry is likely to reach $1 billion in exports ahead of its 10 year, 2022 target, due to higher productivity and rising prices.

Pipfruit New Zealand business development manager Gary Jones said this is an opportunity to blueprint how New Zealand can act in an integrated way to deliver a new operating system at state level, which could be replicated in other Indian states and other developing countries, and by different industries.

Jones is about to head back to India to finalise the plan and all going well, it should begin early next year. New Zealand companies could benefit from being involved in helping implement parts of the plan, particularly in the education, ICT, and telecommunication areas, though any work will be fully contestable, he said.

The plan includes replanting varieties, education and horticultural training, pest and disease control, research and development, and improving logistics such as water storage and the cold store chain to prevent wastage.

Himachal Pradesh is one of India’s wealthiest states, through selling hydro electricity, tourism, and agriculture. Over 90 percent of the state’s population depends directly on agriculture and apples account for 81 percent of the state’s horticultural industry.

The northern state in the foothills of the Himalayas is bordered by Jammu and Kashmir, the other two main apple growing areas. The hill state’s economy was transformed in the early 20th century when American quaker, Samuel Stokes, brought in Red Delicious apple trees from Philadelphia and gave the locals free seeds to overcome their poverty.

Pipfruit NZ chief executive Alan Pollard said New Zealand’s pipfruit industry has a long term strategy of building relationships in more welcoming trading environments overseas and New Zealand is counter seasonal to India’s apple production.

“The New Zealand industry is one of the few that can offer capability without being in a competitive situation. By building a relationship with India they can be confident we’re not a threat,” he said.

Around 303,000 metric tonnes of New Zealand’s forecast 551,000 MT apple crop will be exported this year. Volumes exported to India have declined in the past three years because it is a low cost market, from 1 million 18 kilogram cases in 2012 to 694,000 in 2014. The value of those exports have declined at a lower rate, from US$18.6 million free on board (which includes the cost of transporting the goods to buyers) in 2012 to US$16 milllion in 2014, due to rising world prices.

The apple exports incur a 50 percent tariff, which amounts to around US$15 million a year, and Pipfruit NZ is hopeful building a better relationship with the Indian growers over the long term will provide better access, including a tariff free window for the months when no Indian fruit is available.

BusinessDesk.co.nz

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