Cntrct Frmng
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Contract Farming – Taking Indian Agriculture to new heights Extension Services - An Effective Delivery Mechanism for Agri Inputs
7. October. 2005
FICCI – Rural Marketing Summit 2005 1
The Companies I Represent
Two Companies from Cochin, Kerala: AVT Natural Products Limited AVT McCormick Ingredients Limited Both are 100% EOU’s, Agri Business enterprises, in the Food Processing arena
AVT Natural – Natural Pigments and Spice Oils & Oleoresins AVT McCormick – A JV with the world leader in Spices from USA for processing high quality value added spices at origin 2
The Business we are in
AVT Natural
AVT McCormick
3
Why Contract Farming?
Traceability from Farm to Fork in the Food Chain Meeting the Sanitary and Phyto-Sanitary (SPS) measures of the WTO Achieve “ Quality at Source ” to:
Address inability of any “process” to alter/better the intrinsic raw material quality to meet the specification of the customer Receive consistent RM quality at the plant to improve process efficiencies 4
Why Contract Farming?
Obtain “ Sufficient Quantity”
“ Net Farm Income Improvement” to result in
To meet consistently delivery commitments to the customer
“Amiri Banao” instead of “Garibi Hatao”
AVT Natural - 30,000 Acres of Marigold Flower cultivation in 5 states of Tamil Nadu, Maharashtra, MP, Andhra & Karnataka AVT McCormick - 2,000 Acres of Chillies cultivation in 2 states of Andhra & Karnataka 5
Contract farming model •GAP - Controlled Agriculture/ Better seeds •Post Harvest Processing Technologies. •Improved farm productivity •Assured output prices. •No middlemen.
Financial Institutions
Farmers
• Meeting the Food AgriInput Co’s
Food Processor
safety standards. • Consistent quality of finished product. • Price hedging.
Customer
Establishing linkages to meet the customer expectations of quality & quantity 6
Successful Contract Farming with Farm-Firm linkages
Extension services with clear focus on:
Higher yields, Lower costs, More active substance, and Better quality
The linkages with the end user dictate the effectiveness of the delivery mechanism Efficient Supply Chain Management - Fully integrated from seeds to output 7
What are the Extension Services provided to the Farmers?
High quality seeds to:
improve the Net Farm Returns – Marigold F1 Hybrids – Strategic Alliance with a leading USA Seed company increase the active ingredient concentration to compete with the Chinese
Tie up with Financial Institutions and Input Suppliers to deliver quality inputs at the right time When needed, arrange sprayers and mass ground sprayings
8
What are the Extension Services provided to the Farmers?
One “Foot Soldier” for every 50/100 acres cultivation with weekly once farm visits – timely advice to farmers on GAP’s Marketing – a major linkage support to the farmer Post harvest processing investment
Few Examples from Marigold Flower cultivation 9
Seeds the critical input
Cultivation in 30,000 acres of land by 35,000 farmers Collection of 80,000 to 100,000 Mt of fresh flowers.
Improved Disease Resistant Hybrid Seeds for Better Productivity
10
Farmers Training Programs
11
Agricultural Extension.
12
Marigold farming - Collection of flowers At Farmers’ Door step
13
No Marketing Hassles for the Farmer
Logistics management critical Direct Collection from farmers door steps Weekly Cash Payment No Middlemen involved 14
Marigold farming - Post harvest processing: stamping & silaging
Labor Intensive
More employment generation “multiplier effect” created by an Agri Business 15
Marigold farming - Post harvest processing Mechanized Drying
16
Marigold farming - Extraction.
17
Contract Farming & Extension Services The blurring of boundaries between Domestic and Global businesses by inexorable forces of International competition is a reality today – Has Indian Agriculture responded well to this challenge? Our Vision
To develop India as a globally competitive, quality agri product supplier, through sustainable programs of both agriculture and farmer development 18
Contract Farming – A proven route to take Indian Agriculture to greater heights
Move away from traditional “Grain Based” strategy to “Diversification” Ensure farmers a legitimate share of the final value of their produce Keep up with the changing consumer preferences and translate them to the Indian farming system Ensure higher returns to farmers 19
7. October. 2005
FICCI – Rural Marketing Summit 2005 1
The Companies I Represent
Two Companies from Cochin, Kerala: AVT Natural Products Limited AVT McCormick Ingredients Limited Both are 100% EOU’s, Agri Business enterprises, in the Food Processing arena
AVT Natural – Natural Pigments and Spice Oils & Oleoresins AVT McCormick – A JV with the world leader in Spices from USA for processing high quality value added spices at origin 2
The Business we are in
AVT Natural
AVT McCormick
3
Why Contract Farming?
Traceability from Farm to Fork in the Food Chain Meeting the Sanitary and Phyto-Sanitary (SPS) measures of the WTO Achieve “ Quality at Source ” to:
Address inability of any “process” to alter/better the intrinsic raw material quality to meet the specification of the customer Receive consistent RM quality at the plant to improve process efficiencies 4
Why Contract Farming?
Obtain “ Sufficient Quantity”
“ Net Farm Income Improvement” to result in
To meet consistently delivery commitments to the customer
“Amiri Banao” instead of “Garibi Hatao”
AVT Natural - 30,000 Acres of Marigold Flower cultivation in 5 states of Tamil Nadu, Maharashtra, MP, Andhra & Karnataka AVT McCormick - 2,000 Acres of Chillies cultivation in 2 states of Andhra & Karnataka 5
Contract farming model •GAP - Controlled Agriculture/ Better seeds •Post Harvest Processing Technologies. •Improved farm productivity •Assured output prices. •No middlemen.
Financial Institutions
Farmers
• Meeting the Food AgriInput Co’s
Food Processor
safety standards. • Consistent quality of finished product. • Price hedging.
Customer
Establishing linkages to meet the customer expectations of quality & quantity 6
Successful Contract Farming with Farm-Firm linkages
Extension services with clear focus on:
Higher yields, Lower costs, More active substance, and Better quality
The linkages with the end user dictate the effectiveness of the delivery mechanism Efficient Supply Chain Management - Fully integrated from seeds to output 7
What are the Extension Services provided to the Farmers?
High quality seeds to:
improve the Net Farm Returns – Marigold F1 Hybrids – Strategic Alliance with a leading USA Seed company increase the active ingredient concentration to compete with the Chinese
Tie up with Financial Institutions and Input Suppliers to deliver quality inputs at the right time When needed, arrange sprayers and mass ground sprayings
8
What are the Extension Services provided to the Farmers?
One “Foot Soldier” for every 50/100 acres cultivation with weekly once farm visits – timely advice to farmers on GAP’s Marketing – a major linkage support to the farmer Post harvest processing investment
Few Examples from Marigold Flower cultivation 9
Seeds the critical input
Cultivation in 30,000 acres of land by 35,000 farmers Collection of 80,000 to 100,000 Mt of fresh flowers.
Improved Disease Resistant Hybrid Seeds for Better Productivity
10
Farmers Training Programs
11
Agricultural Extension.
12
Marigold farming - Collection of flowers At Farmers’ Door step
13
No Marketing Hassles for the Farmer
Logistics management critical Direct Collection from farmers door steps Weekly Cash Payment No Middlemen involved 14
Marigold farming - Post harvest processing: stamping & silaging
Labor Intensive
More employment generation “multiplier effect” created by an Agri Business 15
Marigold farming - Post harvest processing Mechanized Drying
16
Marigold farming - Extraction.
17
Contract Farming & Extension Services The blurring of boundaries between Domestic and Global businesses by inexorable forces of International competition is a reality today – Has Indian Agriculture responded well to this challenge? Our Vision
To develop India as a globally competitive, quality agri product supplier, through sustainable programs of both agriculture and farmer development 18
Contract Farming – A proven route to take Indian Agriculture to greater heights
Move away from traditional “Grain Based” strategy to “Diversification” Ensure farmers a legitimate share of the final value of their produce Keep up with the changing consumer preferences and translate them to the Indian farming system Ensure higher returns to farmers 19
