EID Parry’s sugar fix6 min read . Updated: 01 Apr 2009, 01:19 AM IST
EID Parry’s sugar fix
EID Parry’s sugar fix
Chennai/Karur/Erode: As you drive down the narrow roads from Karur, around 332km southwest of Chennai, towards nearby villages, you can’t avoid noticing the sugar cane, coconut and banana plantations, interspersed with other crops such as paddy, tapioca and sunflower.
Around 12km from Karur, as the road curves at yet another bend to reach a village called Pugalur, stands a huge sugar factory—one of five units owned by EID Parry (India) Ltd, the country’s oldest sugar company.
The vast stretches of sugar cane plantations in its vicinity in Karur and Erode districts are the main reason this factory works 280-300 days a year. In comparison, government-run cooperative factories run only for around 150 days a year.
Also See Erode/Karur (Map)
The factory procures the produce of around 14,000 sugar cane farmers registered with it; the area under sugar cane cultivation is around 22,000 acres. Yet even this factory has been hit by a shortage of agricultural workers attracted by job prospects at textile units. The labour shortage dates back 10 years, but has worsened since a drought in 2002-03.
“With textile units coming up in this area (in and around Karur), many people are moving from agriculture to the textile factories. They get a pick-up and drop service and a steady income —they don’t want to dirty their hands in the mud," says P. Nagarajan, general manager (cane), EID Parry.
Some farmers opted for other crops such as rice in the belief that they would make more money out of those in a shorter period of time.
The challenge before EID Parry was to introduce initiatives that would help farmers not only retain their lands for sugar cane cultivation, but also make sure that the yield per acre goes up substantially. This would result in increased income for farmers and higher production for the company.
Creating agricultural entrepreneurs
P. Selvaraj, 33, comes across as a soft-spoken, hard-working farmer.
Two minutes into a conversation with him, and it’s clear that behind the soft demeanour, ambition rules high. He took the role of an entrepreneur around five months ago and is in charge of one of the eight NPM’s in and around Karur and Erode districts.
The NPM concept works this way: An enterprising farmer is identified and, depending on his interest, is tutored by EID Parry to become a meyyam (centre) operator. The operator works out of rented premises measuring roughly 20x10ft. A sign hangs outside the office listing services that the centre offers.
EID Parry extends the operator a loan for buying farming equipment and implements for sugar cane cultivation, and this comes free of interest. The equipment and implements help in mechanizing land preparation, planting, weeding, harvesting and shredding.
The idea is that other farmers unable to afford equipment and implements of their own could make use of the services provided by the centre operators.
This also results in optimum utilization of the equipment bought because farmers do not require all the equipment round the year.
Selvaraj has secured funding aid of Rs2.2 lakh from EID Parry and bought five different implements for providing mechanized services to other farmers and intends to buy more once his income increases.
“Life has changed after I took this up," Selvaraj says, in his heavily accented “Kongu" Tamil (from the northern region of Tamil Nadu, known as Kongu Nadu). “I want to develop my business further with the extra money I make."
If a farmer wants the weeding operation done for his 4-acre land, all he needs to do is put in a request with the nearest centre operator, who would use his machines and employees such as tractor drivers to get the work done in a specified period of time.
The centre operator has to present the bills for services rendered by him to EID Parry officials, who would arrange to pay him every 15 days. The company would deduct the amount from the payment the farmer gets for the sugar cane harvest he produces every year (this is interest-free too).
The centre operator pays a percentage of the amount he receives from the company to the people he employs. Selvaraj says he did business worth Rs15,000 in the first month, of which he earned a profit of around 15%, or Rs3,750. He has just completed his fifth month in business and provided services worth Rs1 lakh, from which he expects to earn a profit of Rs25,000. Nagarajan says that the idea is to make each of the entrepreneurs do business worth Rs2 lakh per month in course of time so that they would earn a net profit of at least Rs20,000 each.
For EID Parry, the main aim is to ensure that farmers stick to sugar cane cultivation and to encourage more people, especially the young, to grow the crop. Officials say that mechanized farm services would accelerate sugar cane cultivation and help save on costs because manual labour has become expensive over time.
“Sugar cane is known as a lazy man’s crop. If you just leave it to grow with minimum attention, it will still give a decent yield. But if you tend to it by mechanizing your operations, the yield per acre increases, which would benefit both the farmer as well as the company," Nagarajan says.
For the 22,000 acres of land under sugar cane cultivation around the Pugalur factory, the average yield per acre is around 40 tonnes of sugar cane. And this comes from a land bank in which cultivation is around 10% mechanized.
With the setting up of more NPMs, Nagarajan expects the extent of mechanization to increase to at least 25% of the total area by next year. And increase output to 45 tonnes per acre by 2010-11, increasing sugar production for the firm.
EID Parry maintains an online database that stores all details of farmers including the total area they use for sugar cane cultivation, their bank loan amounts, harvest dates and land registration details.
The company plans to computerize each centre. For the first six months, it is lending the entrepreneurs a supporting hand by paying the rent for the centre. For the next six months, half the rent amount will be paid by the company, after which the entrepreneur would be on his own.
Through the centres, EID Parry is looking at providing weather data and market prices of various crops to farmers registered with it.
The company plans to set up agricultural clinics, where entomologists—experts who specialize in the study of insects—would visit the centres at regular intervals and clarify the farmers’ doubts on this subject.
Selvaraj and the other centre operators would soon be able to conduct events at their centres where farmers would be informed about loan and insurance services and familiarized with farm machinery. The centres would be equipped to sell agricultural inputs and spare parts for machines in the next few months.
For farmers-cum-entrepreneurs such as Selvaraj, the NPM centres mean extra income that accrues twice a month on top of the one-time annual income from the sugar cane harvest.
Selvaraj says he is able to make better use of his time now. “I am quite busy with work nowadays, I keep getting offers from different people and my payment is also ensured," he says. And as for his wife, Malathi Selvaraj, 30, things are better now. “With the additional income, we are quite comfortable now. Financially, it is much better," she says.
This is the last of our nine-part Bharat Shining series.