The Hindu Business Line : Prime Bio targets 1 lakh acres under contract farming

While identifying potential tracts for expanding the contract cultivation concept, the company has managed to select holdings with irrigated infrastructure.

The company introduced the concept in 2001 by roping in potential small and medium farmers with a maximum holding of 4-acres each and covered an area of 600 acres. Within a span of two years, it shot up to 14,000 acres.

Prime Farm Services (PFS), the farm services arm of Prime Bio, which itself is a part of the automotive engineering major Premier Instruments and Controls Ltd (Pricol), is confident of covering 30,000 acres under contract farming by 2005.

Apart from expanding its reach in the horticulture rich Udumalpet-Dharapuram zone, the company has managed to convince the farmers in Belgaum, Dharwad and Hubli areas in Karnataka.

According to Mr Vikram Mohan, Managing Director of Prime Bio, the company would focus on four crops - wheat, cotton, maize and sunflower. "Sunflower is on the cards. But we have managed to popularise the coverage under the other three," he told Business Line.

The company enters into a back-to-back agreement with the farmers and the consuming industry. While reassuring a buy-back of the farm produce at a pre-determined/market rate, thereby relieving the farmer from the hassles of marketing, PFS determines the market requirement and advises the growers accordingly.

"For instance, in cotton, the consuming industry - the mill sector, indicates the variety of the cotton, including the fibre strength and count that they will need in spinning. In maize cultivation, the entire produce is sourced by the poultry sector. By supplying quality seeds, other farm inputs and technical advise, we help the growers to raise crops. The farm produce is in line with the specifications of the user industry," he explained.

Stating that the concept had helped to break the intermediary chain to a large extent, Mr Vikram said: "The produce at the farm gate is not mixed, as alleged by the industry. The contract-farming concept has enabled the industry to source quality raw material locally, at comparable rates. The supply chain is also in place."

Conceding that the role of a farm service provider was neither without risk nor easy, Mr Vikram said the Government extension system had failed in toto.

"Indian agriculture is a gamble of monsoon and market. Unless quality inputs and technology support is extended to the farmer, he will not be able to compete globally. Private initiatives have therefore become inevitable," he argued.

PFS though, is not into seed production. The company, after determining the market requirement, ties-up with private seed producing companies for supply of quality seeds. "That is not all. At least 70 per cent of the farm inputs like fertilisers and pesticides are adulterated. We ensure quality inputs, because the market is very sensitive today. A slightest trace of pesticide residue is enough reason for turning down the entire produce. The Indian farmer will have to gear up to face the challenge. There is no room for complacency," he added.

The company has helped the farmers get credit from banks by taking on the onus of repayment.

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