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

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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
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The Business we are in
† AVT Natural † AVT McCormick

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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
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Why Contract Farming?
‰ Obtain “ Sufficient Quantity”
‰ To meet consistently delivery commitments to the customer

‰ “ Net Farm Income Improvement” to result in

‰ “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
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 Contract farming model
•GAP - Controlled • Meeting the Food
Agriculture/ Better seeds
Agri- safety standards.
•Post Harvest Processing
• Consistent quality of
Technologies. Input finished product.
•Improved farm productivity
•Assured output prices.
Co’s • Price hedging.
•No middlemen.

Financial Food
Farmers Customer
Institutions Processor

Establishing linkages to meet the customer expectations of quality & quantity

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 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
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 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
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 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

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Agricultural Extension.

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Marigold farming - Collection of flowers
At Farmers’ Door step

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 No Marketing Hassles for the
Farmer
† Logistics management
critical
„ Direct Collection
from farmers door
steps
„ Weekly Cash
Payment
„ No Middlemen
involved
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 Marigold farming - Post harvest
processing: stamping & silaging
† Labor Intensive
„ More
employment
generation
„ “multiplier
effect” created by
an Agri Business

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Marigold farming - Post harvest
processing Mechanized Drying

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Marigold farming - Extraction.

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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
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 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
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