Coca Cola to enter contract farming in AP

A contract farming project in partnership with Coca Cola is on the cards in Andhra Pradesh.

Under the initiative of New Delhi-based Consortium of Indian Farmers' Associations (CIFA), negotiations are on with the cola company for supply of 5,000 tonne mango pulp for production of its popular mango drink 'Maaza'.

The project will be implemented in five 'mandals' of Chittor district of Andhra Pradesh. A mango plantation of 500 acres is required for the supply of 25,000 tonne fruit for the pulp.

Five mango grower societies in the district have come together and registered as a society for the project. "CIFA is acting as a mediator in the process," P Chengal Reddy, secretary general of CIFA, said, adding, "The deal will be finalised by the end of this month."

With this, Coke will be joining the contract farming sector in AP, where players like ITC are already executing some projects.

The cola company will set the quality standards for the produce and provide all the extension services and inputs for the farm.

"A minimum support price (MSP) will also be agreed upon and if the market price is more than the MSP, the fluctuation price will also be addressed," Reddy said.

Stating that the government had no role in this process, Reddy said the MoU for the deal would also have arbitration clauses.

When contacted, G Sudhir, principal secretary, agriculture and cooperation, Andhra Pradesh government, said, "The government policy is not against contract farming, but we want some bank assurance in the interests of the farmers."

The state government had amended the Agricultural Produce Marketing Committee Act (APMC) which paves way for the private agri markets and contract farming.