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.

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.

Himachal
Pradesh
Uttarakhand

Punjab

Haryana

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)

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.

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, 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 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.

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.

Research objective:
Exhibit 2: Cold Storage Capacity in HP

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.

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

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

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
2

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.

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.

Research Methodology:
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

Credit

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.

Root stocks

Packaging Material

Agri-input Supplier

Grower
HPMC /
Corporate Buyer

Exporter

Pre-harvest Contractor

Growers
Cooperative

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:

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.

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

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.

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.

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).

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.

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.

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.

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

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.
4

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:

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.

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.

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 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.

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.

Exhibit 4: Marketing Costs, Intermediaries Margins & Farmers Realizations-Nov 2009 (Rs per apple box of 20 kg)
S.No.
1
2

3
4

5
6
7
8
9

10
11

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
5

Traditional Channel
350
14
50
4
23
3
3
34
131
481
3
5
8
86
575
105
680
7
63
70
250
1000

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

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.

Share in Consumer Rupee

Marketing Cost
21%

Intermediaries
Margin
44%
Growers Reaslisation
35%

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.

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).

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).

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 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.

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.

Development of an ICT system:

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

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
6

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

State level
ICT enabled
Hub

District Level
ICT enabled
Hub

Block level ICT

enabled Hub

Block level ICT

enabled Hub

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.

Village level
ICT enabled
kiosks
Village level
ICT enabled
kiosks
Village level
ICT enabled
kiosks
Village level
ICT enabled
kiosks

Growers

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

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

Agri-input supplier: Rootstock/Fertilizer/Credit/

Insurance/Pesticide

Apple value chain

intermediaries
&
Cold Chain operator

Internet

ICT
Enabled
Kiosk

Extension
Agency

State
Horticulture
Board

State Level ICT

Hub

DATABASE

Internet

Post-harvest
Equipments
Suppliers
Transport Agency

Local- FM
radio station

Exporter

Internet

Packaging
Material Factory

Forward Flow
Backward Flow
Secured extranet

Exhibit 7: Application System Architecture showing the flow of information

7

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.

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

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.

How to
tackle
Pest
attack?
Insurance Schemes
Scientific agri-practices

Value- additions

STATE

Sources of agri-inputs,
packing and credit
Demand &
information

LEVEL
ICT
HUB

Consumer need
preferences

&

Market linkages
Demand forecasting

price

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.

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.

Farmer Education: Apple growers, who in the current

system are at the base of the information pyramid, do not

The extension agencies would get information on real time

basis about the developmental status of the apple crop and
8

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.

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.

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.

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.

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.

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

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