Chennai: India’s farming revolution has begun on the banks of the Kaveri river in Tamil Nadu and the emerging business of organized retail has a role to play in the phenomenon.
Over 200 small and mid-sized farmers in the region, some illiterate, have come together and set up a company, Dharmapuri Precision Farmers Agro Services Ltd, that will sell to the country’s large organized retailers.
The move, likely to be the first such initiative in the country, comes at a time when wholesale and small-time vendors of fresh produce are up in arms against retail chains such as Subhiksha and Reliance Retail which, they claim, are taking away their business.
The farmer-owned company has been formed with each member contributing Rs10,000 . It will negotiate with large buyers such as Reliance for forward buying (or the purchase of produce that is still being grown).
“The company will give us the guts to negotiate with large buyers”, said C. Bhupathy, secretary of Dharmapuri Precision. “The company can match the supply and quality required.”
The farmers were initially part of a three-year, state funded precision farming project, with 400 farmers pooling one hectare each for the programme. Farmers of Dharmapuri district, one of the two districts that participated, have formed this venture; and farmers from Krishnagiri are setting up a similar firm.
Collectively, the farmers produce 23 varieties of vegetables and in the last two years, they have reported a 60% increase in yield.
The entry of organized retailers such as Subhiksha and Reliance is changing the way produce is procured. These companies are focusing on buying from farmers, bypassing middlemen and attempting to set up cold-storage chains to prevent wastage, currently at 40% in India. That, they hope, will lower the price of fruit and vegetables and improve their business prospects in a country battling inflation, which is at a two-year high.
At present, the Dharmapuri company is in negotiations with Reliance for the supply of tomatoes. The farmers are already supplying to a Sri Lanka-based firm, and other wholesalers in Coimbatore.
Parmesh, who is part of the project and whose family owns 12.5 acres of land in Saragapally village, 12km from Hosur, said his output has increased two-thirds by participating in the project. As a result, he has quit his job as a customer service executive in Tata BP Power Co., which paid him Rs10,000 per month.
Prior to the project, his fields produced 200 bags of cabbage (each weighing 80kg) per acre. Now, they do 500 bags of better- quality produce, leading to a higher sale price.
“The success of the project has transformed the lives of farmers,” said Santosh Babu, collector of Krishnagiri district. “Much more can be achieved; we are looking at expanding this programme actively”.
“We wanted to take the focus away from production-led to market-driven horticulture,” said E. Vadivel, director of extension education, Tamil Nadu Agricultural University, which advised the farmers on cultivation methods for the pilot project and monitored progress for two years.