ICT System for Increasing Efficiency of Apple-Value Chain

Mukesh Pandey*, B K Sikka** & Sunil Panthari***

Jammu & Kashmir

Abstract
Horticultural crops being high value crops are important in raising the incomes of the farmers besides creating employment opportunities. Apple is one of the most widely grown temperate fruit crops grown in Himalayas of Northern India. Almost all the apples grown in India come from its three mountainous states i.e. Himachal Pradesh, J&K and Uttarakhand. The supply chain of apples, which is one of the main temperate fruit crops of the Himachal Pradesh, is laden with inefficiencies across the entire value chain leading to poor price realization of growers on one hand and exorbitant prices paid by consumers on the other. A major share of this consumer rupee goes to a miniscule number of market intermediaries who exploit the farmers due to poor marketing linkages, virtually non-existent cold chain infrastructure and processing facilities. The growers still follow the age old cultivation practices and have no idea of consumer needs and preferences, market prices, various government schemes, scientific agronomical practices especially agri-inputs, sources of timely and adequate credit availability and market linkages. The apple farmers of Himachal Pradesh suffer due to inadequate infrastructure especially cold chains, absence of demand forecasting and meagre value-addition. They also lack information on scientific cultivation practices, market prices, consumer preferences and market linkages. The purpose of this research paper, as such, is to integrate the information platform for various stakeholders and design an ICT enabled apple supply chain that will benefit millions of apple growers, processors, distributors, dealers, exporters of fresh & processed apple products and above all consumers. The study will also provide an action plan to the policy makers and private players like HPMC and Adani thus creating spin-offs which will stimulate social, economical and sustainable development of India.

Himachal Pradesh Haryana Punjab Uttarakhand

Delhi Rajasthan Uttar Pradesh

Apple Producing Areas (shaded) of India: 2007-08

Uttrakhand 6.52%
Others 0.49%

Himachal Pradesh 29.61% Jammu & Kashmir 63.38%

Exhibit 1: Apple Production in India: Geographical Area & State Share (NHB Database, 2008)

Research problem: Apple is one of the most widely grown temperate fruit crop grown in Himalayas of Northern India (altitude range of 2000 4500 meters). Almost all the apples grown in India come from its three mountainous states i.e. Himachal Pradesh, J&K and Uttarakhand (Exhibit 1).
*Dr. Mukesh Pandey is an Associate Professor College of Agribusiness Management, G.B.P.U.A&T, Pantnagar **Prof. B.K.Sikka is Dean, College of Agribusiness Management, G.B.P.U.A&T, Pantnagar. *** Sunil Panthari is working with IDBI Bank Ltd.

The total production and area under apple cultivation in India is 2.0 Million Tonnes and 263900 hectares respectively (Indian Horticulture Database, 2008) but there are huge post-harvest looses. Apple is the main fruit crop of the Himachal Pradesh (HP) and accounts for about 45 % of the total area under fruit crops and 88 % of the total fruit production in the state. Most common varieties grown in HP are Red Delicious and Golden Delicious. At a modal selling price of 48 rupees per kg, the total apple business in HP is around Rs. 2845 million. This calculation is based on prices prevailing at regulated agri-produce market of Azadpur, Delhi as well as retail prices prevailing in top 20 towns of India during April/ May 2009. Azadpur market was selected because in India the entire apple is grown in northern India and around 70% of the entire apple production arrives at this market.

National Seminar 2009 on ICT for Agriculture & Rural Development, Arunachal Pradesh

In fact, if we look at country-wide picture, India produces about 8% of the worlds fruit and about 15% of the worlds production of vegetables but looses 25 to 40% of the fruits produced due to lack of post harvesting infrastructure such as cold chains, transportation, storage and processing facilities (www.southasia.oneworld). To illustrate, India wastes fruits and vegetables every year equivalent to the annual consumption of the United Kingdom. In India, the average annual consumption of fresh apple is estimated at about 19 kg per household of the affluent class, 17.1 kg, 13.6 kg and 10.8 kg respectively for the upper, core and lower middle class households. Accordingly the total existing demand for fresh apple in India is estimated at 1.082 million tons per annum. The demand for apple jam and apple juice is likewise estimated at 0.207 million tons and 0.234 metric tons respectively. The total consumption of apple as fresh and processed fruit in India is estimated at 1.535 million tons. (Government of India. 2003) In HP, the apple value chain is full of inefficiencies. The growers still follow the age old cultivation practices and have no idea of consumer needs and preferences, market prices, various government schemes, scientific agronomical practices especially agri-inputs, sources of timely and adequate credit availability and market linkages. The cold storage facilities are virtually non-existent and almost 95% of the apples plucked and transported reach the first intermediate storage point i.e. Delhi after a long gap of 24-30 hours.
Exhibit 2: Cold Storage Capacity in HP

storage facilities. HPMC (Himachal Pradesh Horticultural Produce Marketing and Processing Corporation Ltd., an HP government company engaged in fruit marketing and processing) has estimated a capacity utilization of only about 25% (Government of India, 2008). This is despite the fact that under controlled atmosphere apple can be stored up to 9 months. As reported earlier the wastages in fruits are in tune of 25-40%, which could be prevented through increased utilization of cold storages. The absence of refrigerated containers of different sizes and prohibitive cost of transportation makes the trading unviable for market players. Another issue in the apple value chain which requires intervention is extremely low price realization by the grower. In India, conglomerates like ITC have done pioneering work in establishing multiple channels of relationships with farmers and through information and communication technology (ICT) applications smartly plugged institutional voids. They have successfully created a sustainable agri-business and food retail model despite being plagued with an inefficient and non-responsive supply chain. It was strongly felt that ICT can similarly be a major enabler in increasing the efficiency of the entire apple value chain, not only in HP but in entire South Asia. It was thought that proper application of ICT can help create information sources which are not limited by their reach like traditional extension activities but can also offer interaction platforms which are need based and can be easily understood by Indian farmers. Research objective:

Exhibit 2: Cold Storage Capacity in HP S. No. Location Operator Capacity 1. Gumma, Shimla HPMC 1000 MT 2 Jarol, Shimla HPMC 1000 MT 3 Rohru, Shimla HPMC 1000 MT 4 Oddi, Shimla HPMC 1000 MT 5 Patikuhal, Shimla HPMC 1000 MT 6 Parwanoo, Solan HPMC 3000 MT 7 Rohru Adani Fresh 6000 MT 8 Rampur Adani Fresh 6000 MT 9 Theog Adani Fresh 6000 MT 10 Matiana Dev Bhoomi 6000 MT Total cold storage capacity 34000 MT

This project work was undertaken with an objective of developing an ICT application system for increasing the efficiency of the apple value chain. This involved identifying various stakeholders in the apple value chain, understanding how they create and share value and the problems faced by each of them. Review of Literature: Bandel, T. (2003) designed software called Produce Manager to help agronomists report crop inspections and production forecasts which can then be used for planning, follow-up, control and traceability. Deodhar, S.Y. (2005) studied the entire Indian apple value chain with respect to trade costs, trade policies, trade volume and profit margins for highlighting the transaction costs incurred by various stakeholders in the apple supply chain. Silva, H. and Ratnadiwakaray, D. (2008) analyzed the role of ICT in reducing transaction costs in agribusiness by enabling timely and affordable communication and identified the specific information needs of the farmers along the agri-value chain starting with the decision on the crop to be planted and ending with the sale of produce at the wholesale market and measure
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Most of the cold storages in HP (See Exhibit 2) are single-chambered, single-product facilities (barring the state of the art controlled atmosphere facilities set by Adani and Dev Bhoomi). These cold storage facilities are mainly utilized for stocking potato and potato seeds (80% of the capacity) for about six months a year and for storage of multi commodities (17% of the capacity). Apple growers hardly utilize these cold

ICT System for Increasing Efficiency of Apple-Value Chain

the information search costs associated with the studied group of farmers. Weber, M. (2008) highlighted the importance of value chain implementation tools while formulating business plans, aligning supply to match market opportunity and monitoring results in value-chain development. He also offered a guide of value-chain approaches in the context of five main issues: trust and cooperation, governance, market power, innovation and knowledge, and focus/intervention points. Research Methodology:

ensured the grower was matriculate, had a minimum irrigated landholding of one acre along with access to communication and transport facilities. The secondary data were obtained from apple economists at Dr. Y. S Parmar University of Horticulture and Forestry and CSK Himachal Pradesh Agricultural University, Palampur, research reports of past researchers, Government of India, APEDA, National Horticulture Board and Web Portals of Govt. of HP, National Information Centre etc. Results and Discussion

The state of Himachal Pradesh was selected for the study and major apple producing districts of the H.P State viz. Kinnaur, Solan, Kullu, Mandi, Kangra and Shimla (See District Map of H.P) were surveyed in November 2008 and April-June 2009. These districts were selected as they account for more than 80 percent of the total Apple production in H.P (Indian Horticulture Database, 2008). Descriptive research design was adapted to accomplish the objectives of the research. The primary data were collected from 50 apple growers and various intermediaries in the supply chain including contractors, commission agents, wholesalers, cold storages, transporters and retailers. Judgmental sampling used,
Pesticide / Fungicide/Fertilizer

1. Existing apple Value Chain in the major apple producing districts of H.P. The apple produce from the orchards of HP reaches the consumers through a multitude of channels, each of which differs in the number of intermediaries and as such has varying degree of complexities (Exhibit 3). Although these channel intermediaries perform a specific role in the apple value chain, they also exploit the farmers to a great extent. More often than not, each intermediary adds his margins arbitrarily with little adherence to the Market Acts. This ultimately jacks up the retail price with adverse consequences to both the growers and the consumers.
Packaging Material

Root stocks

Credit

Agri-input Supplier

Grower HPMC / Corporate Buyer

Pre-harvest Contractor

Growers Cooperative

Exporter

Harvester

Grader/ Packager Processor Forwarding Agent

Transporter

Commission Agent Cold Storage Operator

Wholesaler/ Sub-wholesaler

Retailer (India & abroad) Grocery Retailer Consumer

Exhibit 3: Existing Apple Value Chain in Himachal Pradesh

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National Seminar 2009 on ICT for Agriculture & Rural Development, Arunachal Pradesh

2. Role of various stakeholders: Credit providers: In HP, the need of farmers for credit is mostly fulfilled by commission agents. These agents advance credit at a commission of 6-8% to small growers for meeting out various costs associated with cultivation on the pre-condition that the produce would be sold through them only. Agri-input suppliers: At present, the rootstocks suppliers in HP commonly import varieties like MM (Malling Merton) and M (East Malling), propagate them using budding/grafting/ tissue culture and supply one year old grafts for planting during early spring. Around 732 registered nurseries are involved in HP in propagation of plantlets from imported rootstocks (HP State Horticulture Department). Agri-input dealers not only supply fertilizers and pesticides but also advise the growers on their mode of application, frequency and right compositions. Farmers also get information of scientific agronomic practices from Krishi Vigyan Kendras (state extension agency), fairs organized by Y S Parmar Agriculture University, NGOs and state agriculture departments Grower: The apple growers take care of their orchards throughout the year, add manure/fertilizers, remove weeds and prune their trees. The new generation of growers is now practicing scientific techniques of cultivation learnt through extension agencies. Growers cooperatives: It was observed during the survey that farmers in about 40 villages of Churag and Pangana divisions in Karsog valley of Mandi district in Himachal Pradesh have formed a Karsog Valley Farmers Cooperative Society, which is a body of around 350 growers and marketers who now intend to sell their produce directly in big cities under their own brand name North harvest and thus get rid from the web of middlemen and increase their price realization. Pre-harvest contractor: These contractors travel across villages, inspect apple orchards post flowering and fruit formation, generate production forecasts and enter into agreements with farmers. Thereafter, they hire skilled harvesters and packers who take care of plant protection, irrigation, wrapping of poly ethylene sheets around apple bunches and theft prevention. Harvester: These are experienced laborers who first visually inspect the apples for size and color; then conduct a fruit pressure test through penetrometer, basic starch and TSS test to check if the apple has completed its natural growth and reached optimum maturity levels. If convinced, they pluck it using gentle clockwise rotation to minimize damage to apple and its shelf life.
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Packer/Grader: Apple being perishable needs quality packing and sensitivity while handling. In almost every orchard surveyed, apples were sorted, graded and packed manually because the growers having small land holdings could not afford farm based mechanical processing line. However, in bigger units like those of Adani, grading is done through sophisticated high speed computerized machines. The top quality grade of apples fetch better price realizations to the farmers whereas the culled apple and the surplus left after sorting and grading is packed in gunny bags and sent to processing units for making squash, jelly, jams and juices. In HP, the government has set the standards for apple packaging which involves use of inner and outer boxes made of reusable corrugated cardboards. These boxes have a capacity of 20 kg and have ventilation holes, cushioning trays to separate different layers of apples. These boxes are further marked for variety, packing date, geographical area, trademark of producer and weight. Forwarding agent: Their team of workers consolidates the apple crop to create large sized lots by bringing the packed apples physically on their shoulders and/or through makeshift ropeways to the main road from where they are loaded on trucks for onward transportation. HPMC/ Corporate Buyer: It is a HP government organization involved in procurement, processing and retailing of processed apple products. It procures apples from farmers at MSP (Minimum Support Price) set by the government. This price being 10 to 20% less than what is paid by commission agents is preferred by farmers in case of low market demand especially during peak production time. As on 2008, there are over 85 fruit processing units in HP which are engaged in making value added products like juices, jams, cider, jellies etc. (www.himachal.nic.in). Cold Chain Operator: The perishable nature of the commodity makes the role of Cold storages very important. Besides HPMC operated cold storages few private players like Dev Bhoomi and Adani has also established state of art controlled atmosphere facilities. Retailers, Exporters and Consumers: These business firms procure the apple from different markets through their agents, create consignments, do necessary documentation and send it to buyers or their agents in the different foreign markets. Transporter provides the logistics solution to a considerable part of the apple value chain. The commission agent facilitates the transaction process between wholesaler and forwarding agent. Wholesalers break the bulk and facilitate distribution within a particular area. Retailers display and make the apple available to the consumers conveniently at a particular location. The consumers pay the money in return for the value accumulated in the entire value chain and create

ICT System for Increasing Efficiency of Apple-Value Chain

demand for apples, thus sustaining the entire apple value chain. 3. Problems faced by stakeholders in apple value chain: The apple growers of HP face the problem of shortage of quality root stocks. Over 70 % of the orchards surveyed in the HP were found to be 30 to 40 years old which need replacement with better and improved variety of rootstocks so as to achieve higher output. These root stocks have to be imported from developed countries in Europe or USA. Around 40% of the farmers surveyed specifically mentioned an urgent need for switching over to high yielding, imported root stocks of popular varieties for generating consumer demand. The nursery owners depend on the State horticulture department for the imported rootstocks which are being obtained inadequately. The rise in prices of packaging material and lack of availability of good quality cartons was found to be a major problem. State owned Agro-packaging India Limited carton factory at Gumma with a capacity of 2 crore boxes has been working for many years at 3- 32 % of capacity depending on the season. The cost of an apple box including trays, strips, clips, tape and markers was found to vary from Rs. 45 to 65 in the local markets of HP which significantly affect the economics of growers. The government also provides packaging material through horticulture mobile teams at subsidized rates but the quality of these boxes is found wanting. Despite Government ban, some packers were also found using wooden boxes with paddy straw thrust between rows to prevent abrasion to apples. This kind of packaging however doesnt go well with the international buyers.
S.No. 1 2 Particulars Net price received by apple grower Expenses incurred by apple grower: i. Picking, grading & assembling ii. Packing materials iii. Carriage up to road-head iv. Freight up to market v. Commission of Forwarding Agent vi. Loading/ Unloading charges vii. Commission of Commission Agent Sub Total Realization at wholesale market Expenses of wholesale trader Carriage and handling Market fee Sub Total Wholesaler traders Margin Sub-wholesaler purchase price Sub-wholesalers Margin Retailers Purchase Price Retailers Expenses Carriage and handling Wastages Sub Total Retailers Margin Consumer Price
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Around 30% of the farmers mentioned high price and spuriousness of plant protection chemicals as one of the major bottlenecks in increasing the productivity of apple orchards besides lack of adequate financial resources. Amongst the apple growers in HP, 80% of the farmers surveyed expressed serious reservations about the poor infrastructure and inadequate cold storage space in their area due to which they are not able to increase the land coverage for apple plantation. About 60% expressed their deep anxiety due to uncertain demand patterns and price fluctuations where 40% expressed grave concern about farm losses due to absence of suitable technical expertise whenever required. The harvesting, packing and marketing systems in HP were found to be largely disorganized. The harvesting and post harvesting handling of apples is done manually. Apples are then carried in small quantities through difficult mountainous routes to the nearest road point. Almost 60 % of the farmers surveyed complained about spoilage of apples due to long transit time. The post harvest losses of apple in HP were estimated at around 25-30 % and attributed to difficult geographic terrain , lack of post harvest handling systems, poor infrastructure facilities such as bad up-country roads, improper modes of transport, inadequate cold storage space specific for apple storage and distant points of consumption.
Traditional Channel 350 14 50 4 23 3 3 34 131 481 3 5 8 86 575 105 680 7 63 70 250 1000

Exhibit 4: Marketing Costs, Intermediaries Margins & Farmers Realizations-Nov 2009 (Rs per apple box of 20 kg)

3 4

5 6 7 8 9

10 11

National Seminar 2009 on ICT for Agriculture & Rural Development, Arunachal Pradesh

Share in Consumer Rupee

Marketing Cost 21%

Intermediaries Margin 44% Growers Reaslisation 35%

tests and scientific plucking methods. Cold-chain operators when interviewed explained how they need a minimum capacity utilization of 80% to break even and also how they lack information of district, block and village-wise apple production. Due to stronghold of intermediaries in the value chain, the consumer is reduced to a role of price taker in the apple value chain. Majority of the commission and forwarding agents surveyed complained of transportation vehicles falling fall short during the peak harvesting season. Government has taken few regulatory steps to ensure the availability of transport vehicles during the peak season but still the problem persists as the short apple season with an even shorter harvesting period creates a sudden demand for the transportation and temporary storage. A majority of the village contractors also face the problem of shortage in storage space. The cold storages are a valuable proposition for the growers as they get 30% higher return if they sell to controlled atmosphere (CA) operators. However, refrigerated containers are available only as return cargo, in case these are being used to transport dairy products like ice cream, butter etc to HP. Refrigerated freight is 3 times than that of normal freight (Rs.56 per Kg as compared to Rs.1.75 per kg for transportation up to Delhi). The contractors have to face high losses during grading, handling, storage, transportation and distribution after the harvest as the trained manpower is not easily available. The harvesting and grading requires special skill, lack of which results in value loss of the produce. Fruit processing in apples has a long way to go in HP. Fruits and vegetable processing in India is a mere 1.7% of production as compared to 60-70% in USA (Harvey Blatt, 2008). To unlock the potential value in the apple crop, more of it needs to be brought under processing. Development of an ICT system: Three main components in the ICT system were conceived for the apple value chain in HP viz. implementation partners, technology required and the service delivery framework. The implementation partners proposed in this case are state horticulture board, apple growers, and apple grower cooperative associations, village contractors, commission agents, wholesalers, NGOs, KVKs and application service provider. Basic hardware and technology required for the development of the system can be provided by state wide area network to establish a secure network between the state government agencies and the state level ICT hub. It is proposed that the State data centers would act as repository for the all the data on land records, variety of apple grown by
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Exhibit 5: Share of various stakeholders in apple value chain of HP

From Exhibit 4& 5, it is clearly evident how the apple value chain in HP consists of a plethora of intermediaries who not only jack up the final costs without significant value addition but also exert a negative pressure on the farmers margin. Also, the quality of apples deteriorates due to multiple handling. This research study revealed that in HP, the share of apple growers in consumer rupee is a mere 35% and the major share goes in the hands of market intermediaries. This price realization by apple growers of HP is very low when compared to the farm realizations of 60% to 65% of the apple retail price in countries like the USA. (www.marketresearch.com). A recent development in the apple value chain has been private sector participation in procurement and infrastructural investment. In fact, Adani group has started direct procurement of apples from the orchards itself which has significantly improved price realizations of apple growers as well as opened a window for better quality apples to end consumers at affordable price because of elimination of intermediaries. The study of problems faced by the various stakeholders in the apple value chain reveals that the problems can be categorized into broadly four spheres viz. a)Input availability Related Problems, b) Information Related problem, c) Logistics related problems, and, d) Postharvest management related problems. Over 70% of the apple growers of HP face the problem of availability of accurate information regarding the demand in the market and prevailing prices. They also mentioned as to how they get misleading information about prevailing market rates in different regulated markets. When asked by various agronomical practices, almost half the farmers lacked correct information pesticides and fungicides application practices. They were found to rely on the contractors and input dealers for the information which is often skewed in their own favor. Since most of the apple grading in HP is done manually, graders were found wanting in proper knowledge of grading methods and information regarding the grades set by the government. Harvesters across HP are not trained properly on apple ripening

ICT System for Increasing Efficiency of Apple-Value Chain

each and every grower, past trends in apple demand and supply etc. A virtual private network (VPN) can be used to establish secure intranets and extranets. Broadband with a data transmission speed of at least 2mbps or a VSAT connection in the remote location would be required to establish a network.
Block level ICT enabled Hub Village level ICT enabled kiosks Village level ICT enabled kiosks Village level ICT enabled kiosks Village level ICT enabled kiosks

who will manage these kiosks. Nominal amount can be charged to the user to make the ICT kiosk as a self sustaining unit. Third generation (3G) technology available in India and upcoming fourth generation (4G) mobile technology would help in serving a wider clientele. These technologies would support wireless digital data transfers like photographs and videos directly from orchard to the village or district level ICT enabled Kiosk. With the help of GIS (Global Information System) enabled platform the mapping of apple producing regions can be done and production forecasts can be made more accurately. The flow of information in the proposed ICT system is illustrated in Exhibit 7. Different stakeholders in the apple value chain would be connected to state level ICT hub through Networking. The growers and their cooperatives, Apple value chain intermediaries & Cold Chain operator would be able to access the application through ICT enabled village and District level kiosks. Agri-input suppliers, Local- FM radio station, Transport Agency, Packaging Material Factory, Exporter, Postharvest Equipments Suppliers and extension agency would be directly connected to state level ICT hub through internet. The HP State horticulture board would be communicating with state ICT hub through secured intranet. The state level ICT
Agri-input supplier: Rootstock/Fertilizer/Credit/ Insurance/Pesticide

State level ICT enabled Hub

District Level ICT enabled Hub

Block level ICT enabled Hub

Block level ICT enabled Hub

Growers

Exhibit 6: Service Delivery Framework

Various services, as mentioned later, will be provided to the stakeholders through the creation of ICT enabled hubs at state, district and block level following by setting of village level kiosks. These kiosks (Exhibit 6) can be operated by young, IT educated growers from villages itself or they could be maintained and operated by the private conglomerates like Adani or government organizations like HPMC. Specialized training programs can be conducted for training the people

Grower/ Grower s Cooperative

Apple value chain intermediaries & Cold Chain operator

Internet State Horticulture Board

Local- FM radio station

ICT Enabled Kiosk

Extension Agency

State Level ICT Hub

DATABASE

Post-harvest Equipments Suppliers Transport Agency Packaging Material Factory Internet

Internet

Exporter

Forward Flow Backward Flow Secured extranet

Exhibit 7: Application System Architecture showing the flow of information

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National Seminar 2009 on ICT for Agriculture & Rural Development, Arunachal Pradesh

hub would be the central coordinating unit of the system. It would route all the information flow between various stakeholders. It would receive information and queries from various stakeholders and after analyzing the problem and data mining its database of information, the solution would be provided. Services expected by apple growers from the proposed ICT system: The farmers and other stakeholders surveyed revealed the following 11 services ( Exhibit 8) as their biggest concern in doing profitable and sustainable apple business. It is extremely important that the proposed ICT application system specifically addresses the following issues.

receive adequate, timely and relevant information from existing information sources. ICT can play a major role in updating the apple growers by ensuring information flow through agri-websites, enabling the industry to take an updated, uniform database on farming practices to the individual villages, with the data customized to individual agro-climatic zones. This website can be accessed through the Internet at Kiosks set up in major villages in the local language. The Children of the region could also be imparted computer education through ICT enabled Kiosks. The ICT application system will provide links to the various root stock providers in India and abroad who can be placed an order with. The growers can place an order for the rootstocks through the ICT kiosk and get information on improved varieties suitable for their

How to tackle Pest attack? Insurance Schemes Scientific agri-practices Sources of agri-inputs, packing and credit Demand & information price Value- additions

STATE LEVEL ICT HUB

Consumer need preferences Market linkages Demand forecasting Cold infrastructure

&

Chain

Govt. Schemes & Subsidies

Exhibit 8: Apple Grower Services through ICT

The structural framework of the proposed ICT system has been constructed in a manner to provide following solutions to various stakeholders in the apple value chain. Farmer Education: Apple growers, who in the current system are at the base of the information pyramid, do not
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agro-climatic zone, nearest nursery providing such plants, planting method and standard package of associated cultivation practices. The state level ICT hub will then route the information to the state horticulture board. The extension agencies would get information on real time basis about the developmental status of the apple crop and

ICT System for Increasing Efficiency of Apple-Value Chain

the diseases if any through high resolution photographs/ videos uploaded through the digital cameras at the block level ICT kiosks. Subject matter specialists can then advice the farmers individually through mail addressed to the kiosks. Information about scientific crop management, drip irrigation techniques, water harvesting and nutrient deficiencies, crop protection can be provided by the extension agencies quickly without any delay. The extension agencies can also broadcast the current prices, government schemes, demand forecasts, logistics and other apple trade news through local FM station. Such a movement should also include the channel members as active participants creating a win-win situation. Backup Services: It is not sufficient to provide the farmer with exact and comprehensive information through webportals, his specific queries have to be replied through on-line chats, and he has to be provided with early warnings regarding pest onset and weather forecasts for his local areas using remote sensing. The manual graders and harvesters could reach the extension agencies through the proposed ICT application system. They can be trained online through customized courses designed by experts. Moreover, the problem of skilled graders can be solved through the introduction of mechanized grading and sorting machines. The portal will provide links to various suppliers of these machines. The scattered production units of packaging material will be connected to the state level ICT hub. These packaging units can then plan their inventories and production schedule according to the apple off take and consequent demand for their boxes. Besides this, the packing manufacturer in the neighboring states of Punjab and Uttarakhand can also collaborate because of the proposed ICT system and cater to the additional demand that generates in the peak season. Once the web portals attract large number of farmers, lot of new set of industries interested in providing services like sowing, transportation and mechanized farm operations like pest control or harvesting will get created. Once, direct contact of farmers becomes feasible with the help of IT, another extremely and critically important input i.e. farm credit sector can be handled much easily. Commercial information: Real time information on all the agri-inputs like apple rootstocks, crop protection chemicals, nearest agri-input dealers, international sources can be provided. Once the service providers feed farmer with all the information, he can intelligently decide to carry out certain operations on his own or outsource them. The proposed ICT system will also help in designing the harvesting schedule and it can be prepared as early as at the time of ripening for all the orchards in the H.P. This schedule would help the transporters and cold chain operators optimize their operations in the state during the harvesting season.

Better price realization: Most of the small farmers sell their apples to middlemen or in the nearest mandis where the middlemen decide prices. The farmer has virtually no interactions with the wholesalers nor does he know the prices ruling at nearby markets. By making commodity prices, market information, demand forecasts on a real time basis available on the internet, the apple growers can be provided with choices that they lack today. This will ensure better price realization and stimulate a drive towards better productivity. Accurate estimates of the apple production using GIS and credible demand forecasts will help in the price discovery and greater transparency in the apple value chain. The prices in different market across the country can also be displayed on a real time basis. The search costs of the growers would be reduced through the proposed single window ICT kiosk which will act as one-stop-shop for all the information that an apple grower needs for his business. In totality, the benefit to apple growers include better negotiated power for buying agri-inputs, higher yields, better price realizations and above all a sense of empowerment. Conclusion: The multiplicity and complexity in the apple value chain makes it difficult to streamline the value chain. Apple growers of Himachal face problems of timely and accurate information about market prices and demand, source of credit and other agri-inputs, lack of knowledge scientific agri-practices, market linkages, changing consumer tastes & preferences and Government schemes & subsidies. The proposed ICT application system will help in disintermediation of apple value chain by providing a common information sharing platform to growers and buyers and make the apple value chain more efficient in terms of its key deliverables. The government of Himachal Pradesh, through its agricultural agencies and departments, must initiate collaborations with various partners and draw a time-bound implementation plan for establishing the proposed ICT application system. A Public Private Partnership (PPP) model, where the government would share manpower, financial resources and logistical needs and a Private organization would operate and maintain the ICT application system on a commission basis, would be a promising idea worth exploring. Cross functions team comprising of apple growers, implementing partners, other stakeholders like controlled atmosphere providers, transporters, researchers, IT service providers should be created to ensure proper understanding the nuances of apple value chain, inter-functional coordination and for expediting ICT implementation of the apple value chain.

National Seminar 2009 on ICT for Agriculture & Rural Development, Arunachal Pradesh

References
1) 2) 3) 4) 5) 6) 7) 8) 9) Bandel, T. 2007. An Integrated IT Management System to Provide Full Product Traceability from Field to Overseas Market. Retrieved from http://www.globalfoodchainpartnerships.org/cairo/papers/TobiasBandelSekemEgypt.pdf. Deodhar, S.Y. 2005. Trade Cost, Trade Policy and Trade Volume: A Study of IndianApple Market, IIM-A Working Paper # 2005-08-01. Government of India. 2003. Status of Apple Processing Industry in India.A Report of Ministry of Food Processing Industries. Government of India.2008. Report on Task Force on Development of Cold Chain in India. A report of Ministry of Agriculture. Harvey Blatt. 2008.Americas Food.MIT Press.pp:384 Hobbs, J.E. 1996. A transaction cost approach to supply chain .Quorum Books. Westport, Conn, USA. Indian Horticulture Database, 2008. Downloaded from site http://nhb.gov.in. Retrieved as on 13-5-09. Mason, P. and Cosh. K. 2008. Managing complexity in ICT systems development. International Journal of Information Technology and Management. Volume 7, 264-282. Silva, H. and Ratnadiwakara, D.2008. Using ICT to reduce transaction costs in agriculture through better communication: A case-study from Sri Lanka. World Bank paper, 2008.

10) Weber, M.2008. Using Value Chain Approaches in Agribusiness and Agriculture. BNPP Publication. 11) Woods, E. 1999. Supply chain management. ACIAR Post harvest Technology Internal Workshop. Canberra 12 December, 1999. 12) www.himachal.nic.in/Depts.htm. Retrieved as on 26-4-2009. 13) www.southasia.oneworld.Retieved as on 7-5-2009. 14) www.marketresearch.com

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