Radhakrishna Hospitality, ITC get state farm licences

Both the companies to provide farmers with seeds, fertilisers and credit

Tobacco giant ITC and the Radhakrishna Hospitality Services group have been licensed by the Maharashtra government to farm in the state.

ITC is to grow maize and soyabean in the Vidharbha region (Chandrapur, Buldhana, Nagpur, Yevatmal), while the Radhakrishna Foodlands group will be encouraging farmers to grow agri-products in the Mumbai, Panvel and Kalamboli belts.

Both are foraying into contract farming, with the companies providing farmers with seeds, fertilisers and credit. ITC has from January till now bought agricultural produce (mostly soya beans) from farmers worth about Rs 12 crore.

On January 31, 2004, Radhakrishna became the second private company to have set its sights on procuring agro-produce.

The state government has exempted the two companies from the provisions of the Agricultural Produce Market Committee (APMC) Act. It is considering introducing a Bill to amend the Act to open the floodgates to corporate-assisted farming in the state.

According to a government official, the entry of companies in agriculture will be a win-win for all concerned "" farmers, consumers and corporates themselves. ITC, for instance, has been given permission to focus its attention on maize and soyabean farming in the Vidarbha.

ITC has contracted nearly 12,000 hectares of land owned by agriculturists. It will provide the seeds, fertilisers and even assist farmers to avail of cheaper credit from banks.

The soya produce will be bought by ITC at prevailing market prices.

This in turn will be sold by the company to agriculture produce market committees in the state.

The elimination of the middleman from this transaction, entered into directly between the producer and the company, ensures that while the farmers get a good price for their crop, consumers pay a lower rate for better quality agricultural produce. Companies are being given fee exemptions.

A senior state government official told Business Standard: "Radhakrishna, for instance, has been exempted from paying marketing and supervision fees to the state government. While the two firms have been issued single licenses (exemption) from the provisions of the APMC Act so that they may contract with farmers for buying their produce, the state government intends to introduce an amendment to the Act so that corporate farming becomes a reality in the state very soon. Already the law and judiciary department of the state government is looking into the legal issues before forwarding the amendment proposal for Union government sanction."