Carrot capital

Published : Jul 10, 2013 12:30 IST

Many farmers have moved out of traditional crops such as wheat and cultivate carrot in association with Sunshine Farms, run by Subhash Deswal and Lal Krishna Yadav (in picture).

Many farmers have moved out of traditional crops such as wheat and cultivate carrot in association with Sunshine Farms, run by Subhash Deswal and Lal Krishna Yadav (in picture).

A FARMING experiment that has unfolded over the past decade in Sikandrabad, 70 kilometres from Delhi in the western Uttar Pradesh district of Bulandshahar, presents a microcosm of contemporary trends in Indian agriculture. It highlights the problems of marginal and small farmers, a few options for survival and sustenance through individual and collective entrepreneurial initiatives, and certain failed efforts by larger corporate entities to integrate themselves into these initiatives. The experiment, or rather expedition as its prime movers call it, has turned Sikandrabad into the carrot capital of north India.

Cultivating 2,000 acres (800 hectares) of non-contiguous land held by around 100 small and medium farmers, including many who are into lease farming, the experiment produces an average of 25,000 tonnes of carrot a year. Cold storage facilities are set up and maintained well in different locations close to the land under cultivation. According to Sunshine Farms, the agribusiness institution that has brought together the farmers, Sikandrabad supplies carrots round the year to markets in different parts of India, including Bangalore and Hyderabad in the south.

The prime movers behind Sunshine Farms are Colonel (Retd) Subhash Deswal and Lal Krishna Yadav, who call themselves farmers though both had pursued other vocations before turning to agriculture in 1998. Deswal was in the Indian Army and Yadav, a postgraduate in chemistry, dabbled in small business ventures. But coming from agricultural families, both have farming in their blood. Since neither owned any significant property, they decided to get into lease farming. “For five years, we did one thing and another and like all other small and marginal farmers lost heavily. That is when we came in touch with some forward-looking agricultural scientists who helped us strategise. Their advice was to master a single crop and we started researching on carrot some 10 years ago. Two years later this resulted in the introduction of sensible mechanisation, which led to the production of carrot of the best possible quality in the region. In about two seasons our product found its own market. That is how we are supplying Sunshine carrot to a variety of retailers such as Mother Diary and Funtops as also to some suppliers of Reliance retail outlets,” one of them recounted their story to Frontline .

That is practically the story of almost every farmer who has entered into verbal agreements with Sunshine Farms for contract farming. Scores of them recounted how the vagaries of production and the pressures of the market had forced them to move out of traditional crops like wheat and cultivate a vegetable like carrot in association with Sunshine Farms.

“The average produce of wheat an acre is 18 quintals. At the current rate of Rs.1,300a quintal what we get from wheat on an acre is Rs.23,400,” said Rajeev Choudhary, who does lease farming on six acres, with carrot being a major crop. “In comparison, it is the experience of all the farmers who have got into contract farming for carrot that we earn at least Rs.42,000 an acre.”

Narain Saini, another farmer who grows carrot on 15 acres through lease farming, said that with carrot cultivation he at least did not have debts that were beyond repayment. “We had debts beyond our capacity to repay when we grew wheat. Of course, we are forced to buy wheat even for household consumption and there are many farmers who cringe at that prospect. But making a decent living is more important than running after false dignity,” he said.

The stability and growth achieved by this medium-scale enterprise attracted many big agribusiness players and corporates to Sunshine Farms. Among them were Global AgriSystem, which is part of the Katra group involved in making strategic investments and carrying out businesses in diverse fields, and the Aditya Birla group, which runs the More retail outlets in different parts of the country. While Global AgriSystem had a joint venture with Sunshine Farms to replicate the Sikandrabad model in at least four centres in India, the Aditya Birla group had a collaboration to ensure systematic production of a number of agricultural products for the group.

Both partnerships were short-lived. “The Aditya Birla group had a corporate style of functioning, with their executives setting up computerised operations from farms and even sending reports from the fields. But ironically, the corporate office used to function only from 10 to 5, and such time specification was not suited for agriculture, which during periods like harvesting is a 24x7 operation. Naturally, our approaches did not match,” Deswal said.

Global AgriSystem did bring in investment to take the Sikandrabad model to other places. But Deswal says this too did not achieve the desired goals on account of operational factors. Global AgriSystem withdrew step by step from production and marketing. Since 2011, the entire operations have been once again carried out by the original Sunshine Farms team. However, as per the agreement signed as part of the joint venture, the ownership of the biggest carrot cold storage built by Sunshine Farms now vests with Global AgriSystem. “It is a fair deal and we have leased out that storage from Global AgriSystem now. Though the joint venture is not operational we are coordinating and functioning well,” Deswal said.

However, the fact remains that corporate-driven joint ventures and funding in the agriculture sector holdout the prospect of changing of hands of agricultural property rights.

From their own experience in setting up a “trust-based contract farming system” with small and marginal farmers to associating with corporate agribusiness entities, Deswal and Yadav are clear that unless corporates are able to really understand the dynamics of Indian agriculture, they would not be able to go far. “It is one thing to visualise something sitting in air-conditioned conference rooms and totally another to really understand how much of one produce would grow in an acre in a particular region.”

The duo as well as associate farmers say that it was the conservation technology innovations and infrastructure improvement that they created in the form of laser land levelling and raised-bed planting that took them a long way in building up the Sikandrabad model. “If such steady growth needs to be achieved in other parts of the country the government should primarily focus on building up infrastructure. Any other exercise will only be counterproductive.”

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