KOCHI: Better price realisation and reduction of post-harvest losses. Niti Aayog’s contract farming law might just serve the farmers their wishes on a platter.
When the law sets rolling, the ailing agri sector in the state is expected to undergo an unprecedented shift: From cooperatives-driven to corporate-powered. Sounds far-fetched? That’s what the law implies!
For the uninitiated, the Central Government’s premier think-tank is drawing up a model law to connect farmers with the food processing industry and thereby insulate them against price volatility. An expert committee appointed by the Niti Aayog is expected to submit its report on the ‘Model Contract Farming Law’ by May-end or early June.
If everything goes as planned, it will usher in corporate houses into contract farming, helping to unlock vast swathes of unused agricultural land in the state for the cultivation of a range of crops. “In Kerala, there are large expanses of cultivable land lying idle,” says V K Vijayakumar, investment strategic at Geojit. Land owners who used to cultivate the land are no longer utilising it as the new generation moved away seeking greener pastures in the cities. On the other hand, a new crop of youngsters have taken a shine to farming but they don’t have the land.
The proposed law will be an interface to bring the land owners and the prospective farmers under one umbrella to engage in contract farming, Vijayakumar says. Kochi-based Harinath D Bharatiyan, who has been cultivating traditional rice varieties on around 2 acres of land in Wayanad, will be among the beneficiaries of the new law.
“Right now, we undertake cultivation on leased land, renewed every year. Farming on leased land works on the principle of trust. The land owner gives the land only to those he trusts,” he says. But scions in the corporate world are not enthused about the prospects of the law in Kerala. Viju Jacob, managing director of Synthite Group, the world’s largest producer of value-added spices, says he has been sourcing chilly, marigold, cardamom etc from Andhra Pradesh, Karnataka and Coimbatore for the past 20 years. “In Kerala, I’m sceptical.
When the prices shoot up, we can’t trust the people to honour their commitment to supply us the produce. We don’t want to get into a tussle with them,” he says. Giby Mathew, director of Commodities Online, however, reckons contract farming law to do wonders to the Kerala agri sector. “This year, for instance, there is a glut in turmeric and elephant yam, and the prices have nosedived. I have decided to distribute my organic turmeric produce this year to friends and relatives for free due to rockbottom prices,” he says. This is not practical unless farmers enter a tie-up with corporates for the supply of the produce at a pre-fixed prices. But, under contract farming, farmers should not also expect bumper profits, Giby says.