The Hindu Business Line : STC keen on supporting back-end farm operations

Gearing up
Talks on with Malaysian oil co for entering into long-term pact
Plans to move into processing of commercial crops in overseas markets

G. Srinivasan

New Delhi, Aug. 10 In a bid to position itself to take advantage of the entry of large domestic retailers in the country, the State Trading Corporation (STC) is keen on bolstering back-end operation from producing, processing to marketing of farm produce and plantation crops.

The Chairman and Managing Director, Dr Arvind Pandalai, told Business Line that agriculture produce would form a major chunk of the corporation’s business in the coming years not only to enable farmers discover proper price fo r their produce but also to help in augmenting their income, besides ensuring consistent quality of their produce in both the domestic and export markets.

He said with the imminent entry of large domestic retailers, back-end integration is required since retail majors demand quality and certified produce.

To start with, STC has commissioned a study to IIM, Bangalore, to come out with a report in three months to put in place “a purchaser-friendly, customer-friendly and distributor-friendly” scheme.

New scheme

Under this, a large number of farming areas would be brought under fruits and vegetable cultivation so that the wastage could be avoided.

Mr Pandalai said STC would go for processing operation so that frozen and processed products would be marketed over the long haul, providing income to all the stakeholders in the back-end operations.

Edible oil supply

He also recalled that STC’s edible oil operations were in full swing for supply to the public distribution system in the past.

Though this business has been continuing, not in refined and branded form, but in the bulk form, he said that the corporation has become “a serious player now importing 3-4 lakh tonnes of oil every year which is 9 to 10 per cent of the country’s import of edible oil”.

The CMD said talks were on with the Malaysian oil major FELDA, which were discontinued sometime ago, to revive the possibilities of entering into long-term arrangement for undertaking import, refining and packaging of edible oils for sale in domestic markets under its own brand name.

Alongside, STC is planning to move into processing of commercial crops such as cotton seeds in overseas markets with a view to achieving greater value addition and better price realisation.

Tea procurement

In this context, he also cited the procurement of tea leaves directly from small tea growers in Nilgiris in Tamil Nadu for processing and sale of made tea in the domestic market.

He said operations under the scheme have been yielding better returns to the small and marginal tea growers in the catchment areas and fetched higher premium in the last four auctions held in Coonoor.

The quality of STC tea is consistently good that exporters from Pakistan and Afghanistan have plumped for it.

Mr Pandalai said that STC had also tied up with Gujarat Civil Supplies Corporation to distribute this tea in all fair price shops and it would be extended to other States soon.

It has also set up a green chilli processing plant and red chilli processing plant in cooperation with the Spice Board, besides setting up an international level quality testing laboratory for spices in the Spices Park of Madhya Pradesh.