Food retailing is growing at a rate of 30% every year. By the year 2020, India will be the worlds fourth largest retail food markets. The corporate giants are aggressively working on creating a foothold in this business by integrating backwards and operating on the entire value chain. This is being accomplished through "Contract Farming", a rising trend where the farmer enters into a contract with the company. Whats more, s say the trend is here to stay.
Prof.
M S Swaminathan, father of Green Revolution, says that contract
farming is not new in India. It has been prevalent for a long
time, for instance, in the case of sugarcane farming. He adds
that contract farming has immense potential in case of niche
crops and for horticulture produce to be subject to value
addition. So also Prof. Sukhpal Singh, IIMA, Expert Advocate
for Contract Farming, says, "Contract farming prior to
2000 was more by default than by design. The APMC Act of 2003
implemented it, and the tenth plan mentioned its need. Today,
mandis are being privatized and private markets are
being set up."
RPG's
Sanjiv Goenka, not content with FoodWorld's success, is steering
contract farming down south in Tamil Nadu, and aims to reach
all four regions of the country. Reliance Industries Limited
is also planning to establish contract farming in Himachal
Pradesh. Telecom major Bharti has already entered the contract
farming field with a venture named FieldFresh. The soft drinks
giant PepsiCo has contracts with nearly 2,000 farmers to grow
corn, basmati and potatoes. Other companies like Tata, Mahindra's
MSSL, Big Bazaar, HLL, DCM Shriram, McDonald's, etc., are
already in the fray. |
