Corporation faces massive losses as C-grade apples flood market, affecting premium apple prices
The Himachal Pradesh Horticulture Produce Marketing and Processing Corporation (HPMC) is selling C-grade apples procured from farmers at ₹12 per kg for as low as ₹1.50-2 per kg in Parwanoo auctions, creating significant losses for the state corporation and market distortion.
Under the Market Intervention Scheme (MIS), HPMC purchased C-grade apples from farmers at ₹12 per kg but is now auctioning them at Parwanoo for ₹55-110 per bag, translating to ₹1.50-2 per kg. This massive price difference has created market chaos, with the influx of cheap C-grade apples causing A-grade apple prices to crash, further distressing farmers.
The corporation has procured 28,000 metric tons of apples by August 31, processing 8,000 metric tons and auctioning 10,000 metric tons. However, 10,000 metric tons remain at procurement centers, reportedly rotting due to inadequate processing capacity.
HPMC had stopped conducting apple auctions in 2024 to avoid massive losses after suffering ₹2.25 crore deficit in 2023 when it sold ₹3.6 crore worth of apples procured under MIS. This year, due to bumper crop production, the corporation resumed auctions despite knowing it would result in losses.
Private company deal falls through
The corporation had signed an agreement with Sonipat-based Natural Fruit Chain to purchase bagged C-grade apples at ₹8 per kg. However, the deal has run into disputes over excessive wastage deductions, forcing transporters to stop deliveries.
“There is an ongoing dispute with the company. HPMC had sent 70-80 truckloads of apples to them. After that, the company started demanding higher wastage recovery. Due to this, transporters have stopped supplying to them. Paperwork is currently underway,” said Arindam Chaudhary, Managing Director of HPMC.
Government policy backfires
The state government had specifically assigned apple procurement under MIS exclusively to HPMC this year, removing Himfed from the scheme. The intention was to ensure maximum processing of procured apples to prevent market flooding, but inadequate processing capacity has led to the current crisis.
C. Paulrasu, Secretary of the Horticulture Department, acknowledged the problem: “Due to excess apple production this year, HPMC will also conduct apple auctions. This will also result in losses. The private juice-making company with which the agreement was made is not purchasing.”
Market impact and farmer distress
The situation has created a vicious cycle where farmers who sold their produce to HPMC at ₹12 per kg are now seeing the same apples flood the market at throwaway prices, depressing overall apple prices and affecting their remaining crop’s market value.
With 10,000 metric tons of apples rotting at procurement centers and the corporation facing inevitable losses from selling at such low prices, the policy intervention designed to help farmers appears to have backfired, creating both financial losses for the state and market disruption for the apple industry.
