Contract farming: ryots in Kuppam all set for a windfall

By TheHindu on 09 Aug 2017


A.D. Rangarajan

Huge export potential; annual turnover touches over Rs. 10 crores Huge export potential; annual turnover touches over Rs. 10 crores

Region endowed with cool climate and fertile soil Proximity to Banglore is also an added advantageChange in cropping pattern helps grow exotic vegetables

KUPPAM: Overcoming initial apprehensions, farmers of Kuppam area are increasingly tilting towards contract farming, which is all set to fetch them handsome returns at the end of the current season.

The region, endowed with cool climate and fertile soil, is the right destination for floriculture and horticulture operations. Its proximity to Bangalore (120km) has come as an added advantage.

Also, it has spurred a change in cropping pattern that has resulted in the growing of exotic and export-oriented vegetables. Realising that the huge export potential cannot be tapped all by themselves farmers have started looking at contract farming as a viable option.

While the TDP regime entrusted the task of introducing Israeli form of cultivation to BHC Agro India Ltd., it was only on the basis of consultancy and market support and the firm was not engaged in any buyback arrangement. But the initiative paid dividends with farmers having tasted huge margins associated with exotic crops they have become more receptive to the idea of contract farming.

Five companies

There are five companies engaged in contract farming on an extent of 620 acres benefiting 1,000 small and marginal farmers in Kuppam, Gudupalle, Ramakuppam and Shantipuram mandals.

The main crop grown here is gherkin, a cucumber variety, which is harvested at a very early stage and has an enormous market abroad. In fact, gherkins are grown on contract basis only in Kuppam and on the outskirts of Hyderabad in the entire State. Also, baby corn, capsicum, red capsicum and exotic varieties like Jalapenu (pronounced as Alapeno), Yellow wax, dilweed etc. are exported to Europe and North America.

Investment

While the contract firm invests Rs. 20,000 per acre towards seed, pesticide, manure, drip irrigation system etc., and also trains the farmer in scientific farming, the latter is expected to invest only Rs. 7,000 in the form of labour.

Against this, the average gross income per acre goes up to Rs. 50,000.

This means, the annual turnover from 1,000 acres (two seasons a year) hovers around Rs. 10 crores.

In fact, representatives from Mt. Olive, the world's second largest pickling unit, paid a visit to Kuppam last September to estimate its potential.

A Canadian firm, Marcatus QED, has set up its own agro unit, Sasya Agri Foods Pvt. Ltd., which is a major stakeholder in the region with 400 acres on contract. Says M. Koteswara Rao, its agri-coordinator, "We use 15 tonnes of organic manure per acre in order to protect soil fertility. For the benefit of farmers, we have introduced biogas plants and a novel concept called `kitchen garden' to enable them grow the routine crops for domestic use. The firm has also strictly prohibited engagement of child labour in the farms under contract.

Not just exotic varieties, even the regular vegetables like lady's finger and beans are also expected to be grown under contract system soon.