Agri Business

McDonald’s potato supplier to double crop area in Gujarat

Virendra Pandit Ahmedabad | Updated on March 12, 2018 Published on September 24, 2012

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Even as Big Mac invests Rs 750 crore to open 250 new restaurants in the next three to five years in India, its potato supplier, McCain Foods India, plans to double the contract farming area for the tuber to 8,000 acres in Gujarat.

McDonald’s alone will increase its potato procurement in Gujarat from 30,000 tonnes now to 50,000 tonnes in three years as a key ingredient for outlets across the country. Through its Canadian partner McCain, that supplies potato for French fries and other products, Big Mac has provided the latest technologies and new seeds, particularly the Sheopody variety, to potato growers, mainly contract farmers, in Deesa (North Gujarat) and Kheda (Central Gujarat).

McCain, which set up its potato processing plant in Mehsana, Gujarat, in 2007, with an investment of about Rs 100 crore, is now increasing acreage for the tuber’s contract farming. It had begun to contract potato farmers in 1998. At present, the company has contracted about 1,200 farmers over 4,000 acres in Gujarat to cultivate ‘processed quality’ potatoes. “Last year, we sourced 40,000 tonnes of processed quality potatoes from farmers,” Vikas Mittal, Managing Director, McCain Foods India, told Business Line. Contract farming has increased the crop yield from 25-30 tonnes to 40-50 tonnes per hectare.

The organised market size for snack foods in India is about Rs 3,000 crore per annum, and potato is a major ingredient in it. The market for processed potato products is growing at the rate of 15-20 per cent annually.

The Mehsana plant, which was initially manufacturing the international range of McCain products, is now producing products tailored to local Indian tastes, including aaloo tikki, tandoori veg nuggets and chilli garlic potato bites.

Mr Mittal said prices are negotiated and mutually-agreed upon each year and the farmers are paid a remunerative price before they plant the seeds. The price depends on the seed price, the variety grown (yield factor), irrigation system used and regular potato price trends.

Besides upgrading the yield and quality of local potato varieties (Kufri Chandramukhi and Kufri Chipsona-1), McCain’s agronomy team has also introduced international potato varieties (Shepody, Santana and Kennebec) to Gujarat farmers for processing high quality French fries, he said.

Asked about the destruction of hundreds of tonnes of potato by farmers due to over-production a few months ago in North Gujarat, Mittal said McCain only works with contract farmers and takes the entire crop from them. They are protected from market fluctuations. Moreover, McCain uses only “processed quality” potatoes, he added.

McCain Foods also plans to double its retail network to 9,000-10,000. It will increase its reach from 50 Tier-I and II cities to about 90 in three years.

Asked about exports, Mr Mittal said the McCain branded frozen products are becoming popular both in India and abroad. “We are exporting our ‘Made in India’ products to China, South-East Asia, the Middle East, the UK, the US and South Africa.”

Published on September 24, 2012
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