Rasi Seeds bets big on contract farming

The Salem-based seed manufacturer, Rasi Seeds, is all set to enter contract farming in a big way. It has already identified 6,000 acres in Namakkal, Salem and Dindugal districts in Tamil Nadu for sowing the company's Bt (Bacillus Thurengiensis) cotton in the third week of August.

The scheme of operations has also drawn in two banks, two yarn manufacturers, the state agriculture university, state agriculture department and other service providers to enable the successful completion of this first crop.

This is the first attempt by a Bt cotton producer to bring large acreage and link yarn manufacturer for an assured market. The company is a leading producer of hybrid seeds and Bt cotton seeds. M Ramasami, managing director, Rasi Seeds said, "We hope to increase the acreage under this scheme to 10,000 acres in the next winter season. A lot would depend on the monsoon."

He added that a second crop in this financial year would be attempted, though it may not cover the entire 6,000 acres. An estimated 4,000 farmers are expected to participate in this maiden attempt.

Rasi Seeds is yet to bring in an insurance company under the scheme. At a policy level, crop insurance provides a risk coverage only if a particular crop fails at a district level. If a particular farm fails to yield the estimated output, the insurance company does not entertain claims to mitigate the loss. "The crop insurance is still a little hazy on this," Ramasami said.

Indian Bank and State Bank of India have agreed to fund up to Rs 10,000 per acre. "We do not need Rs 10,000 per acre. We have requested the banks to release the money in tranches with a maximum limit of Rs 10,000 per acre."

Production and distribution of RCH2 variety (from Rasi Seeds) has already started. The company has applied for three more varieties of Bt cotton with Genetic Engineering Approval Committee (GEAC). "We are expecting the GEAC approval for RCH 164, RCH 144 and RCH 20 by March next year.

In April, Rasi Seeds had received the GEAC approval, to sell RCH2 Bt cotton seeds in six states - Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka and Tamil Nadu. The first company to receive this approval was the Jalna (Maharashtra) based Mahyco. Mahyco received the approval in April 2002 to produce three varieties - MECH 162, MECH12 and MECH 184.

Mahyco too has the GEAC clearance to sell Bt cotton in these six states. Discussing the acceptability of Bt cotton among farmers in Tamil Nadu, Ramasami said, "The response from farmers in the state has been overwhelming. An estimated 3 lakh acres come under cotton cultivation in Tamil Nadu. We expect at least 1 lakh acres to come under Bt cotton this season. We expect to supply Bt seeds to 80 per cent of these."