The Hindu Business Line : Century Agrotech bets big on jatropha to fuel growth

CHENNAI-BASED Century Agrotech Ltd plans a big foray into jatropha cultivation through the contract farming route across 10 districts of Tamil Nadu. The company has evolved a model, dubbed the Century Jatropha System, which will enable it to scale up planting of this shrub to 50,000 acres in these identified districts.

Mr D.P. Kumaresan, Vice-President, Marketing, Century, told Business Line, that the company had entered into a buyback arrangement with a private and public sector oil company each to sell 40,000 tonnes of bio fuel when the bushes start yielding seeds from the third year onwards at a price to be negotiated then.

The company has tied up with Karur Vysya Bank which will disburse Rs 30 lakh to farmers to bring 500 acres under jatropha in a pilot project in three districts - Cuddalore, Sivaganga and Karur. Mr K. Sampath, Chief Manager of the T. Nagar branch of KVB, Chennai, confirmed that as the company has ensured a buyback arrangement for the produce, it will be extending the loan through its branches to contract farmers for the pilot project. This branch of KVB gave shape to the proposed funding of the project.

Explaining the model that Century has evolved, Mr Kumaresan said it had appointed two franchisees in each district, who in turn will appoint 10 direct selling agents who will interact with the farmers. Jatropha, being a hardy plant, can be planted on the periphery of a field or property without the main crop being impacted. "500 plants with one metre space between can be planted to an acre in a zigzag formation," he said. The company will encourage farmers to form groups of 25 each, called the Jatropha Farmers Council, akin to a self-help group. "The idea is this council will be responsible for the repayment of the loan," said Mr Kumaresan.

The bank will fund each farmer to the tune of Rs 6,000 while he would be required to bring in Rs 3,000 as his contribution to the project. 500 farmers will be financed under this scheme. Initially, Century will supply the saplings to the farmers at Rs 4 a sapling, for which it has started a nursery on 130 acres of farmland it owns in Sivaganga. There will be a three-year moratorium on the loan and the farmers will need to start repaying the loan from the fourth year onwards. Century has assured a price of Rs 4 a kg to the farmers when the plant starts yielding seeds for crushing from the third year.

Mr Kumaresan said Century's buyback arrangement of 40,000 tonnes a year would require at least two lakh acres under jatropha cultivation eventually. The company has a tie up with the Forest, College & Research Institute, Mettupalayam, which is part of the TNAU, and has done extensive work on the jatropha plant.

He said currently, the bio fuel is being sold to oil companies at around Rs 40 a litre, but Century was hoping to price it under Rs 25 a litre. Presently, there's a shortage of the plant itself, he pointed out, but when it's grown in abundance, as Century plans, they expect the price to come down substantially.

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