The Hindu Business Line : SABMiller promoting barley farming

New Delhi, Jan. 28 SABMiller India, a leading brewer with brands such as Foster’s, has roped in nearly 6,000 farmers across 13,000 acres for contract farming of barley. Besides crop improvement, the move by the brewing major is aimed at strengthening its backward integrations.

“Barley, a critical component for the beer industry, has always been an orphan crop in India. We started this exercise not just for backward linkages but also to create a good quality yield,” SABMiller Director for Corporate Affairs, Mr Sundeep Kumar, told Business Line.

Growth trajectory

Observing that the market for beer in India is on a growth trajectory with a CAGR of 15-18 per cent annually, he said the demand for malting barley is gaining ground.

“We believe that the increased beer production has a potential to benefit over 10 lakh farmers. The total barley production in India stands at 1.25 million tonnes, out of which 0.35 million tonnes is used for malt and only 0.20 million tonnes is used by the beer industry,” he said.

SABMiller which started contract-farming under the Saanjhi Unnati project said the main aim is to increase the area under barley cultivations. The project has been initiated in arid regions of Rajasthan and Haryana. A lot of emphasis is also given to the upgradation of quality so that it is suitable for brewing.

While the per capita consumption in India is still low at one hectare as compared to the global average of 22, Mr Kumar said barley produced in India is largely coarse and feed-grade resulting in poor quality with variable kernel size and high moisture content. “It is not a priority crop for farmers who get yields as low as 1.1 tonne per acre and don’t get a fair deal in terms of pricing,” he said.

The project’s activities include farmer education, soil testing, agronomic advice. This is done through innovative seeds-on-wheels campaign and establishment of social entrepreneurial units, he noted.

Consolidation

On the corporate front, the company is also looking to consolidate its presence in the market. SABMiller has a market share of around 37 per cent, which makes it the second largest player in the market. “We will be consolidating our presence by focussing on all our brand offerings,” he added. SABMiller’s brand portfolio includes Royal Challenge, Haywards 5000 and Castle Lager.

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