The Challenges of Cold Storage and Tariffs in the Kashmir Apple Industry

The Kashmir apple industry faces significant challenges when it comes to cold storage and energy costs. While Controlled Atmosphere storage is touted as a way to mitigate market volatility, the reality for most apple growers in Kashmir is that cold storage is a costly risk.

High and unstable electricity tariffs, coupled with unreliable power supply, force operators to resort to diesel generators. The lack of a dedicated agricultural power tariff for storage facilities results in increased costs that are ultimately passed on to growers, making storage financially viable only for high-quality fruit.

Unfortunately, small and medium-sized growers, who make up the majority of the sector, cannot afford to store their produce. This leads them to sell their apples early at lower prices, flooding the market and driving prices down further. Rather than stabilizing incomes, cold storage exacerbates inequality within the apple economy.

In contrast, other apple-exporting regions treat cold storage as crucial agricultural infrastructure, with subsidized energy and stable power supply. Storage is viewed as essential for food security planning, not just as a commercial service. In Kashmir, growers are expected to compete globally while facing high commercial energy rates in a region abundant in hydropower.

The argument that Kashmir apples are uncompetitive is misleading. The true issue lies in the policy environment surrounding them. Inflated freight costs, high energy expenses, poorly regulated input markets, and reduced import duties without addressing domestic cost structures all contribute to the industry’s struggles.

Addressing these structural issues is crucial. Regulating freight rates during peak harvest seasons, developing alternate transportation routes, and introducing agricultural power tariffs for cold storage facilities are key steps that can be taken. Transport and storage should be recognized as vital components of food security infrastructure, rather than being solely driven by commercial interests.

Correcting these cost disparities can enable Kashmir apples to compete effectively and sustainably. Failure to do so will result in the industry continuing to suffer, with blame falsely attributed to “market forces” rather than the underlying policy issues.

It is imperative that policymakers demonstrate the political will to address these challenges. By rectifying the structural obstacles faced by Kashmir apple growers, the industry can thrive and contribute positively to the region’s economy.