The Centre has taken the first step towards privatisation of poppy cultivation and extraction of narcotic raw materials. It has awarded a licence to Rusan Pharma for the trial cultivation of poppy and extraction of opium from it through a new technology that improves the crop yield.

Opium is the source of alkaloids such as morphine, codeine and the baine, used in anti-addiction therapies and medicines that treat extreme pain, such as in cancer patients.

Rusan Pharma Managing Director Kunal Saxena told BusinessLine that the company has been awarded a two-year pilot project through an open tender. Rusan fit the bill in terms of bringing in quality seeds, use of new technology to extract opium, and developing the extracts into medicines, he added.

Did you know?
  • Over 10 years, the cultivated area under poppy in India has declined, for various reasons, from 26,000 hectares to 5,800 hectares
  • From 1.60 lakh farmers 10 years ago, the number has shrunk to 70,000-80,000

Opium production in India is highly controlled. Farmers sell their produce to the Centre, which then processes it at the Government Opium and Alkaloid Factories at Neemuch and Ghazipur. The extracts are then given to pharma companies to make cough-syrups, pain-killers, etc.

But with the state-owned plants shut down due to pollution problems, Saxena said, the Centre is looking to upgrade the entire process.

Private participation will improve the quality of seeds available to the farmer and improve the quantity of yield from the crop, he said, adding that it will also bring better prices for farmers.

The move could also help India regain its place in the export market such as to the US (currently dealing with an opioid crisis) and Europe. India had lost out, he said, because of the traditional lancing methods.

Replacing the old

Only certain areas in Madhya Pradesh, Rajasthan and Uttar Pradesh cultivate poppy and farmers use the traditional method of harvesting opium gum through a manual process called lancing, he explained. The new concentrated poppy straw technology involves harvesting the poppy gum through a largely mechanised method.

Under the pilot, Rusan will supply quality seeds to farmers sourced from European partners, as also Indian seeds, said the company’s business development head Malavika Saxena, without giving details.

About 5,000 hectares are presently under commercial use. For the trial, Rusan would cultivate two hectares in UP and Rajasthan, she said.

The economics of the entire process will become clear only after the pilot project is completed, said Saxena, without getting into the financials on pricing of seeds and the narcotic raw materials. The commercial tender would be issued after the trial period.

Diversion worries

With the Government production facility not in use  farmers are holding onto their produce, he said, and this was adding to the existing shortages in raw materials. Despite being the biggest producer of legal opium in the world, India today imports 20 tonnes of Codeine to cater to the total domestic requirement of 60 tonnes, he says.

Diversion of the crop, the husk etc is a huge concern. Rusan has a background in dealing with controlled substances, he said, and it has invested in ensuring that there would be no diversion at any stage, he added. In fact, in MP where the poppy husk clearance was creating problems for farmers, the company is looking to work with the State to improve extraction of alkaloids from the husk too, he said. The State recently stepped in to buy all the husk from farmers to prevent problems arising from the leftovers.  

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