New Delhi: The Indian Farmers’ Fertiliser Cooperative Ltd (IFFCO), which has business interests in fertilisers, insurance, power and telecom, now plans to form overseas groups of farmers that would cultivate pulses to meet domestic demand.
“We are looking at long term tie-up for the import of pulses,” managing director U.S. Awasthi said. “I want to encourage some countries to take up pulse plantation and we can import it.”
India faces a shortage of lentils. The country consumed 18 million tonnes (mt) of pulses in the year ended 31 March, but grew only 14.66mt. It accounts for 25% of the global production and 30% of its consumption, meeting the shortfall through imports, mainly from Canada and Myanmar.
IFFCO is considering the US, Australia and Africa to form farmer cooperatives for long-term pulses imports.
“We will form cooperatives in the overseas countries, where we will provide support in the form of technology and inputs and then we will buy off their products,” Awasthi said.
An analyst said that pulses have been the weakest link in India’s farming system and its production has stagnated as farmers moved to cash crops such as cotton and oilseeds.
Yields are also low in India at 622kg per hectare, lower than neighbours Sri Lanka at 965kg and Bangladesh at 807kg.
“This opportunity for IFFCO could be a little long-drawn,” said S. Raghuraman, head of trade research at Agriwatch, an independent research firm. “Though there is a lot of potential there, it will also involve a lead and gestation time.”
Also, overseas opportunities are likely to demand a premium due to the rising prices for lentils, Raghuraman siad.
To tap into the opportunity that a shortfall in a staple food item presents, private sector firms such as the Tata group are also considering entering the pulses market.
“We think some supplemental effort from the private sector is needed” to fill the shortfall, R. Gopalakrishnan, senior board member of Tata Sons Ltd, the group holding company, had told Mint in an earlier interview.
This is not the first time that IFFCO is looking at overseas opportunities to meet domestic demand. It has already established joint ventures in Senegal, Oman and Australia to source raw material and fertilisers for its plants.
IFFCO posted a profit of Rs360.01 crore on a revenue of Rs32,993 crore for the financial year ended March. It has 40,000 member societies with a domestic urea production capacity of 4.2mt and complex fertilizer making capacity of 4.3mt.