Courting mother nature

Contract farming has a lot to offer both farmers and the landless

Is there any hope for poor farmers who have no choice but to grow whatever is of value to them, whether the soil accepts those crops or not?

They can now grow some medicinal and non-conventional crops for which they can get quality seeds, technical advice during the gestation period, 100 per cent buy back and full insurance cover in case the crop fails.

And to help them are companies that are growing medicinal plants through contract farming. Not just that, degraded and wasteland can also be put to productive use.

One such company is the Rs 25 crore Hyderabad-based Nandan Biomatrix which has commercialised medicinal plants used extensively in Indian and overseas markets.

In nine years Nandan has expanded its coverage from four acres to 10,000 acres. And the initial investment of Rs 5 lakh made 10 years back is giving good dividends. The company made a profit of over Rs 3 crore in 2004-05.

And how exactly does contract farming between Nandan and the farmers work? Well, a farmer who has a decent-sized farm (some can pool their land together as well) becomes the franchisee, which can be spread over a period of 4-5 years, depending on the plant. The seeds are then supplied by Nandan.

The farmer has to appoint technical officers who inspect the crop regularly and are paid by the farmer.

When the plants or fruits are ripe, Nandan goes back to the farmer and buys the entire lot at a predetermined price. And in case of crop failure, the insurance company is there to fall back on.

This is a much safer and profitable venture for the farmers. "Those who can't pay our fee can get loans from the banks," says C S Jadhav, director marketing, Nandan Biomatrix. Nandan's focus lies in supplying products for nutraceutical and biodiesel industries.

These medicinal plants are used to treat lifestyle diseases like stress, diabetes, impotency, hypertension, heart disease etc. Jadhav also says these plants have a huge potential, especially in export markets.

"Leafy plant extracts constitute 25 per cent of the prescription medicine market in the USA," he says.

He adds that the global nutraceutical industry is growing at 7 per cent, and India, with 16 climatic zones, is well suited for different medicinal plants. The nutracare plants developed by Nandan include safed musli and aloe vera.

The biodiesel plant which has got full support from various state governments and President A P J Abdul Kalam is jatropha, which can survive unfavourable monsoons and be grown on wasteland.

"We are upbeat about the potential of jatropha as it is non perishable and has a huge potential in creating non-conventionl energy," says Jadhav. "Besides, it can generate opportunities for over 1 million people once it becomes widespread."

And the rules of growing jatropha are clear. The first party (Nandan) enters into a forward sales agreement to produce jatropha seeds.

The second party, which comprises the landowners, leases out their land.The third party is the landless who put in their labour. In the end all gain. "This particularly benefits the landless who get sustainable employment," says Jadhav.

And while jatropha has a cropping cycle of three years, aloe vera has that of two years and safed musli of one year.

So the farmers have a choice between these plants depending on how much they are ready to wait to reap benefts from these crops. For others, any of these mean more greenery and environmental protection.