India Inc ready to join Govt in boosting farm growth

Vishwanath Kulkarni New Delhi | Updated on March 05, 2012


Public-private model will facilitate large-scale integrated projects

ITC, Nestle and Marico are among the 19 companies that have evinced interest in a new public-private partnership (PPP) initiative that the Government has planned to boost agriculture growth.

The Centre has sought views of the States on a draft framework on PPP for Integrated Agricultural Development (PPPIAD) plan under the Rashtriya Krishi Vikas Yojana (RKVY) for facilitating large-scale integrated projects led by private sector firms.

The draft has been jointly prepared by Ministry of Agriculture and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Single window intervention

Under the proposed plan, corporates will emerge as the single window for delivering all interventions to the farmers. Such interventions could range from delivering subsidies and arranging credit to inputs such as seeds and fertilisers besides creating market linkages for the produce for which farmers will get market determined prices.

The project will focus on high value produce such as horticulture, dairy, poultry and fish products, which contribute to as much as 75 per cent of agri GDP value and are favoured by smaller farmers.

Companies' choice

Marico has shown interest in safflower farming project in about 1.65 lakh hectares entailing some 23,000 farmers in Maharashtra, Chhattisgarh and Karnataka.

Similarly, ITC is interested in taking up paddy, wheat, maize, menthe and vegetable cultivation in Bihar, chillies and cumin in Andhra Pradesh, Tamil Nadu and Rajasthan. ITC is also interested in cultivation of oriental tobacco in AP.

Shriram Bioseed is keen to focus on cotton and corn cultivation in AP, Maharashtra, Karnataka and Gujarat.

The project is a collaborative effort between Government, farmers and corporates, which helps to achieve scale in production, said Mr Sanjeev Chopra, Joint Secretary, Ministry of Agriculture.

Contract farming

Companies will have to identify the regions, formulate a strategy and road map based on the availability of land and climate for each of the project that will be spread over three to five years. They have to mobilise a minimum of 5,000 farmers in each of the project either in groups or associations and chart strategy for technology infusion, value addition, marketing and project management among others.

“It as an extended version of contract farming,” said Mr S. Bhaskar Reddy, Head of Agriculture and Water at FICCI. The financial assistance or subsidies meant for farmers participating in such project will be directly delivered by the Government to the project proponent through RKVY.

Performance monitors

Companies taking up such projects will get a captive market to buy-back the farmers' producer or to sell inputs such as seeds or fertilisers among others. Pilots of such PPP projects are likely to start in 2012-13. Such projects will be independently monitored by agencies like Nabard or others at the end of the period.

Based on their performance, the companies will be provided with an administrative overhead cost of up to 8 per cent of the project expenses. The total projected cost of the 33 projects taken in 17 States currently stands at Rs 8,630 crore, involving some 6 lakh farmers. The proposed plan talks of a disputes redressal mechanism.


Published on March 05, 2012

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