FRUITS play key role in the economies of many countries. With small independent agricultural units, the scope of mechanization in Pakistan is limited and agricultural production labour-intensive. The value of output realized from the cereals, fibres, fodders and other crops is meagre. Diverting the growers towards fruit production will supplement cereals with fruit products and yield higher incomes.

Large areas are blessed with an agro-ecological environment conducive to production of nearly 30 types of fruits among which apple, mango, citrus, dates, guava, melons and banana are more common. The market value of these fruits produced during 2001-02 was estimated at about Rs69.15 billion which roughly comes to eight per cent of agriculture the value-added in that year. During the same period, Pakistan earned Rs5.08 billion from fruit exports, representing nearly one per cent of the total exports, and around 11 per cent of the total amount earned from export of all raw agricultural commodities (Pakistan, 2003).

Apple is one of the most popular fruits in the world with an annual production of 33 million tons. The delicious and hardy fruit grows in moderate climate regions from 30-60-north latitude and 25-45 in the southern hemisphere. These are rich in vitamins A and C and contain high amounts of fibre and carbohydrates. The fruit is versatile and used in baking, jams, jelly, juice, vinegar and vine production. Fresh apples are a desirable food as these are delicious and digestive in nature.

In Pakistan, apple cultivation is limited and restricted to upland areas of Balochistan, and northern hilly tracts of Punjab and the NWFP. The total area under apple was 47.7 thousand hectares producing 315.4 thousand tons during 2002-03. Out of this, 38 thousand hectares were cultivated in Balochistan and the production was 201.0 thousand tons in 2004.

Balochistan is a major contributor to apple production which is 64 per cent of total production. Red Delicious, Golden Delicious, Amri, Mashadi, and Kaja varieties are commercially cultivated. The most popular apple variety is Red Delicious, easily recognizable with its distinct dimples at the bottom and with a range of colours from yellow to green, green-red, yellow-red and dark-red. Apple is an important cash crop of the province.

Its cultivation has gained popularity in upland areas of Balochistan where the climate is cool. The climate, soils and environmental conditions in Pishin, Quetta, Loralai, Zhob, Ziarat, Qillasaifullah and Kalat suit well for the production of apple on commercial scale. Therefore, it has occupied a key place in the cropping pattern adopted by the growers of these districts. District Pishin is the major producer of apple. It produces 32.27 thousand tons from an area of 5.4 thousand hectares, which contributes about 16 per cent of the total production of the province.

A small-scale grower can not compete with a large-scale grower. He must understand the situation to optimize the potential for an economically viable plantation.

Plantation in apple orchard involves many issues for private landowners. It is a long-term investment of land, labour and resources. It is important for the landowner to carefully consider economic prospects before investing. It is not only planting apples on a piece of land as it requires incessant care and application of necessary inputs around the year. Growers have to decide whether they could assign their resources to plant apple orchard or should exploit these resources for other crops. In Pakistan, like other developing countries, there is lack of information on financial feasibility of long- term investment in fruit orchards.

There is a scarcity of consistent and literal information among the growers, traders, investors and the policy makers. A study was carried out by the Technology Transfer Institute, Quetta to investigate and analyze the financial viability of long-term investment of apple orchards with the following intentions:

* To inspect the financial viability of long-term investment in apple orchard;

* To compare investment in apple orchard with and without intercropping After cost and benefits have been identified, priced, valued, the analyst is ready to determine which projects to accept and which to reject. In this regard we will concentrate on three-discounted measure suitable for application to long-term investment analysis of apple orchard: net present value (NPV), benefit-cost ratio (B/C), and internal rate of return (IRR).

The study indicates that depending upon the nature management practices, trees saved from epidemic disease and insect pest, the productive life of apple tree ranges between 7-40 years. Apple production starts during the seventh year after plantation and reaches to optimum production during 16-30 years depending on the management skills. The old orchard may produce a good yield, but it will be of poor quality than that of young apple orchards. The cost of production in old orchard is more than double. It is reported that 40 years is the optimum economic life of an apple orchard. (see the table)

Farming practice-1 stands for intercropping of tomato crop with an apple orchard, farming practice-2 shows the intercropping of wheat/tobacco with apple orchard and farming practice-3 denotes the economic efficiency of an apple orchard without intercropping, respectively.

Intercropping in apple orchards is commonly practiced in the area and it starts right from the first year of planting up to fruiting starts till the tree shelter spreads so much that it becomes difficult for the tractor to plough.

Revenue received from these crops brings returns from the same piece of land in the early years of an apple tree. The NPV was Rs2,83,221 at 12 per cent discount when tomato was intercropped with an apple orchard.

However, with wheat/tobacco intercropping the NPV was Rs2,68,413 at 12 per cent discount. Inter-cropping with tomato as compared to wheat/tobacco provides good cash flow. Tomato is a kharif crop and with it the orchard takes continuous inputs especially irrigation and fertilizer around the year (i.e., April-October).

When wheat reaches to maturity up to its handling, the farmers could not provide the irrigation water or other necessary inputs during the hot summer days which effect the growth of primary crop (apple orchard). Similarly, in case of without intercropping, the NPV was estimated at Rs1,96,016 at 12 per cent discount.

The maximum B/C was obtained (1.51) when tomato was inter-cropped. The analysis indicates that the revenue received from tomato crop makes the overall return from the same field more attractive for growers.

Similarly, in case of inter-cropping with wheat/tobacco, it was obtained at 1.46 and was less than as compared to inter-cropping with tomato. However, it was estimated at 1.48 without inter-cropping.

The maximum IRR was estimated as 38 per cent in case of inter-cropping with tomato followed by 30 per cent with wheat or tobacco and 16 per cent without inter-cropping respectively.