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The Punjab Chief Minister, Mr Amarinder Singh, addressing a press conference to announce the agreement signed by Escorts Agri Machinery group with three basmati rice-export firms for shipping the grains grown under the State Government's contract farming scheme in the Capital on Tuesday. Mr Gurnam Arora, Joint Managing Director, Satnam Overseas, is seen along with him.

NEW DELHI, May 6

THE Rs 1,500-crore Escorts Agri Machinery Group, a strategic business unit of Escorts Ltd, has entered into an agreement with three basmati rice exporters for export of the nearly 60,000 tonnes of basmati rice to be produced at the 60,000 acres that have been taken up by the company for contract farming in eight districts of Punjab.

The exporters are Satnam Overseas, Amira Foods and DD International.

Satnam Overseas alone has contracted about 40,000 tonnes of traditional basmati rice in the contract farming programme being undertaken by Escorts in association with Punjab Agro Industries Corporation (PAIC).

As per the programme, Escorts would provide full range of agro inputs and extension services - supplies of seeds, pesticides, fertilisers, appropriate agricultural equipment and agronomic package of practices - to the farmers in the districts of Ludhiana, Moga, Sangrur, Muktsar, Faridkot, Mansa, Ferozepur and Bhatinda.

The company would also provide input finance and manage collections, procurement, storage, bulk processing and distribution. The farmers would be charged a fee for the extension services provided to them.

"There is no binding or bondage for the farmer to sell the produce to the identified buyers in the contract farming programme. If they get a better price, they can sell to that buyer. As far as we are concerned, we are there for the long haul and the farmers are aware of this," Mr Vinay Upadhyay, Head (Marketing Services), Escorts Agri Machinery Group, told newspersons.

Escorts Ltd plans to invest around Rs 100 crore in the next three years on various contract farming initiatives in Punjab, Madhya Pradesh and Haryana.

On the other revenue streams for the company under the basmati rice initiative, Mr Upadhyay told Business Line that the company would charge 1-1.5 per cent of the purchase value of produce from the buyers.

"Our internal rate of return in the entire contract farming initiative would be 25-30 per cent."

The Punjab Chief Minister, Mr Amarinder Singh, expressed confidence that about 25 lakh acres of the total acreage of 105 lakh acres of Punjab would come under new crops by 2007.

The State Government has embarked on a crop diversification programme to overcome current handicaps such as excessive usage of ground water and tired soils.

"We have also submitted a crop adjustment programme to the Government of India. We are awaiting the response. If that is approved, we can cover a larger area in less time," he said, adding that Punjab would exceed the target of 1,50,000 acres set for this year for new crops.

Besides basmati rice, contract farming exercises are proposed to be carried out in durum wheat, maize, barley and probably cotton.

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Escorts arm in tie-up for basmati exports — Contract farming initiative takes off with three firms signing deal

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