Published On : Wed, Dec 14th, 2016

Nagpur oranges may taste as bitter business due to demonetisation


Nagpur: After suffering a bad orange crop season last year, orange growers from Nagpur are once again on the verge of facing another major setback, thanks to demonetisation drive banning old currency notes of Rs 500 and Rs 1000. As Nagpur markets are being piled up with truckloads of fresh oranges, the cash crunch has posed serious financial concern which may spiral the rates to an all time low.

The orange exporters who export to Bangladesh have suffered the most as fruit prices have fallen by up to 50 per cent.

“Prices have crashed by half and the time to harvest the fruit is getting over. We fear the situation can lead to an increase in suicides of farmers,” was written in a memorandum that was given to the government from the orange farmers of Vidarbha. In the memorandum, the farmers have urged the government to provide currency to traders urgently and asked the Centre to also start buying the fruit.

According to Sridhar Thakre, managing director of MahaOrange, orange growers are slowly reconciling to the compulsions of accepting payments in cheques. This is the only way they can beat demonetisation woes. The last year was painful for the farmers and they were forced to sell the fruit at throwaway prices of Rs 5-12 per kg.

“This time although the rates are good, there is no cash flow in the market,” Thakre said. Around 90 per cent of transactions in the orange trade are done in cash, he pointed out.

Exports start peaking during December and this time the domestic rates are good, which is why the farmers may prefer selling in the domestic market, Thakre explained. Last year this time, the rates were around Rs 10,000 to Rs 15,000 per tonne, and now farmers are getting Rs 25,000 to Rs 30,000 per tonne.

Maharashtra is the country’s largest producer and exporter of oranges, contributing 50 per cent to the country’s total production. The kinoor variety from Rajasthan is the main competitor and accounts for 20 per cent of the total production in the country.

Of the country’s total area under orange cultivation at around 2 lakh hectare, Maharashtra has about 1.21 lakh hectares and the states’ total production averages ten lakh tonne annually, through two seasons – Ambia and Mruga. The orange is mostly cultivated in Amravati, Nagpur, Akola, Wardha and Yavatmal districts; Amravati district alone has 56,747 ha area under orange cultivation and accounts for 45 per cent of mandarin area of the state.

Other places where the fruit is grown are the Northeast, Punjab, Himachal Pradesh and Rajasthan. However, oranges from Nagpur are considered top notch and the best in the country.

Of the total orange production from Maharashtra, about 35 per cent is exported to Bangladesh, while Kerala and Delhi are the other main markets. Also, the fruit exports to Bangladesh usually happen via road and some 100 tonne to 200 tonne are transported to Bangladesh through Kolkata on a daily basis.
Last year, for the first time in many years, around 52 tonne of oranges from Maharashtra were exported to Sri Lanka through the sea route.

The economic condition of orange growers in this region is not encouraging. But they are certainly better off than the cotton grower who is often pushed to suicide. But the orange farmer is also not spared by the vagaries of nature and uncertain markets.

“This season will last another one month. We have weathered the worst brunt of demonetisation and we should be able to push through to the end,” says Abdul Waheed, a wholesale fruit merchant in Nagpur. Waheed belongs to the family of original fruit merchants tracing the lineage to Subhan Seth and Shakoor Seth who ruled the trade in the fifties.

The orange crop grows twice a year. The fruit available from September to December is Ambiya which has a slightly sour taste. It is followed by the sweeter Mrig crop from January to March.

The signature Nagpur Santra has an interesting history. It was fertilised more than a century-and-a-half back by grafting a wild orange variety from Assam with sakhar limbu (sweet lemon, citrus lamiata), a local sweet citrus variety. Brought here by the Bhonsalas – the erstwhile rulers of the region – oranges made Nagpur famous. It is a variety that is exclusively grown in Nagpur and has a pockmarked exterior. The oranges are famous for their sweet and juicy pulp and were given the geographical indication (GI) tag in 2014.

The GI tag 385 identifies the Nagpur orange as being one which has “a specific geographical origin and possesses qualities or a reputation that is due to that origin”. The GIs are part of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), to which India is also a signatory.

The commercialisation of the orange crop has been impeded by several factors. One of it is the absence of freezing and processing centres and the demand for setting up a major processing centre in Vidarbha is an old one.

The first organised attempt was made in the 1960s when farmers came together to form the Nagpur Orange Growers’ Association (NOGA) with its plant at Motibagh in north Nagpur. NOGA ran into losses and the government took over it in 1972, bringing it under the Maharashtra Agro-Based Industries Development Corporation (MAIDC).