ITC sets sights on contract farming

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NEW DELHI: ITC is planning to create export-oriented fruit and vegetables clusters, grabbing the opportunities created by recently announced agricultural reforms, such as allowing contract farming and the expected change in global purchasing patterns.
ITC’s business head for agriculture and information technology S Sivakumar said international buyers were diversifying their sources of supply in the wake of the pandemic. “For example, the Middle East countries will be keen to procure fruits and vegetables from diverse sources, both fresh and as well as processed products,” he said.

The company plans fruit and vegetable clusters closer to the ports to create logistics infrastructure for exports. Sivakumar said the company is exploring various options in view of the agricultural reforms announced by the government. It hopes to use contract farming and involve farmer producer organisations (FPOs), which the government is actively promoting.

Sivakumar said greater consumer awareness about food safety and hygiene in the domestic market will encourage investment at farms, improved supply chains and remunerative prices to farmers.

To begin with, ITC is planning three clusters in six to seven months in various parts of the country. The company is already in talks with customers and building the supply chain to export to Europe, the US and the Middle East.

The government recently approved three ordinances to reform agriculture.

Legalising corporate farming—The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020—is expected to provide for a national framework on farming agreements that protects and empowers farmers to engage with agri- business firms.

Further, the amendment to the Essential Commodities Act will remove the existing restrictions on stocking food produce. The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020 allowed farmers and traders to sell and purchase through competitive alternative trading channels.

“Horticulture crops like onions, tomatoes and potatoes, all of these had the stock limit under the Essential Commodity Act. Now, with the amendment, we can also explore creating those clusters and put in investments,” he said.

Apart from fresh fruits and vegetables exports, ITC also expects wheat and rice exports to pick up.

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