Haryana joins contract farming club, brewers sense opportunity

Haryana joins contract farming club, brewers sense opportunity
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First Published: Tue, Nov 27 2007. 11 34 PM IST
Updated: Tue, Nov 27 2007. 11 34 PM IST
Pune: After Punjab, Andhra Pradesh, Gujarat and Maharashtra, it is now the turn of Haryana to try hand at promoting contract farming to get a better deal for the state’s more than 1.5 crore farmers.
The Haryana State Agriculture Marketing Board has already put in place the legal framework and is now in the process of inviting corporations, agri-processing units and exporters to enter into contract farming agreements with the farming community.
Skol Breweries India Ltd, the wholly owned subsidiary of SABMiller India, the country’s second largest brewer, is the first corporation to enter into a contract farming agreement with farmers in Haryana. Confirming this, a SABMiller spokesperson said: “We have entered into a trial contract for one season with barley farmers for an initial supply of 2,000 tonnes of barley. We will extend the contract, depending on the quality of the produce.”
The company has 10 breweries in nine states across India and brews a total of 50 million cases annually. Farmers in Haryana’s Gurgaon and Mahendragarh-Rewari belt, among others, cultivate barley in close to 10,000 acres, said Baldev Singh, superintendent (marketing enforcement) and in charge of contract farming, Haryana State Agriculture Marketing Board.
While this is the first contract farming venture for Skol, it already has a two-year-old collaborative farming project in Rajasthan, where it provides farmers with seeds and other inputs.
However, there is no formal contract and the farmers in Rajasthan are free to sell their produce in the open market.
“We give them a slightly better price than the market and they are more inclined to sell to us,” the SABMiller spokesperson said. Last year, the company bought 7,000 tonnes of barley from farmers in Rajasthan. The figure will go up to 15,000 tonnes this year, the spokesperson said.
Haryana’s venture into contract farming has also evoked interest from liquor major United Breweries Ltd. Senior officials of the marketing board will hold a joint conference of farmers and their potential buyers and corporations in December and executives from United Breweries are expected to participate at the conference to explore business potential, said sources in the marketing board.
Indian traders are exporting barely to other countries at huge premiums because of a global shortage. This has disrupted expansion plans of local breweries. With Haryana being one of the large barley producing states, contract farming could well offer these companies the relief of having an assured supply of the raw material. The beer market in India is growing at more than 20% annually.
The contract farming venture is throwing up other unlikely candidates into the fray. The Haryana State Co-operative Supply and Marketing Federation, a semi-government body, has listed itself on the contract farming project for growing basmati for the export market, vegetables and commodities such as mustard. The federation will buy produce from the farmers and sell in the domestic and export markets.
It also plans to enter into contract farming agreements with farmers to organically grow the popular 306 variety of wheat.
“A large number of agri-processors and corporations are showing interest in organic produce due to the concern about the ill-effects of pesticides and fertilizer use in farming,” Singh said.
The Haryana marketing board feels that the contract farming scheme will not only help the farmers get a better and assured price for their produce but also help the state diversify its crops.
While it is largely known as a producer of rice, wheat, barley, edible gum and a number of fruits, including the popular keenu oranges, diversifying into horticulture would ease the pressure on the water table which is getting depleted due to concentrated cultivation of paddy and wheat, Singh said.
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First Published: Tue, Nov 27 2007. 11 34 PM IST
More Topics: Haryana | brewers | Gurgaon | Punjab | Andhra Pradesh |