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This is an archive article published on February 20, 2004

Farm guru picks holes in contract

In the biggest blow yet to the contract farming concept pushed by the Punjab government, a report prepared by the Economics department of Pu...

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In the biggest blow yet to the contract farming concept pushed by the Punjab government, a report prepared by the Economics department of Punjab Agricultural University on the directions of noted farm economist S S Johl exposes shortcomings in the system — and shows exactly why the farmers’ complaints are completely valid.

Johl, incidentally, authored the report on crop diversification and is vice-chairman of the State Planning Board. He is also one of the steadfast advocates of diversification through contract farming (CF).

Based on a survey of Ludhiana and Patiala districts, the report points out that the area under CF is actually far less than the stated quantum. This, the authors say, could be due to the targets thrust on agencies, though the programme is ‘‘purely voluntary’’.

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The report also accuses the agencies of providing unsuitable, unrecommended varieties of seeds — particularly of winter maize — to farmers. It points out that the Punjab Agricultural University, which should be ideally testing all varieties of seeds for ecological compatibility, is not associated with the programme at all, nor is the state agriculture department.

While preparing the report, ground research revealed that 80 per cent of the farmers were unhappy with the extension services. Procurement was another problem area, with some farmers complaining of entire produce being rejected or offered lower-than-market rates. They also put paid to the idea that CF crops were economically more viable than traditional wheat and paddy.

None of this, of course, is new to any observer with an ear to the ground. Farmers have complained of the winter maize — introduced in the first phase of CF — nearly failing, because of the unsuitable variety. For crops like hayola, peas, sunflower and the little winter maize that survived, there was little extension service or marketing help available. Even basmati farmers, who took up the crop in the second phase of CF last year, complained of lacklustre marketing efforts.

At its worst, CF has put off farmers altogether. Pyara Singh Dhatt, whose exhibition farm near Mullanpur once proudly displayed a board of the Punjab Agro-Food Corporation (PAFC) — the nodal agency working on CF in the state — is one of them.

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‘‘I first planted hayola at the PAFC’s say-so in 2002. Though there was no technical guidance, the produce was good. But no one turned up even after harvest. So I sold it in the open market, where it fetched me a higher price than the one fixed with the agency,’’ says Pyara.

Next, he grew basmati on CF. But no one came from the company to pick up the produce, nor were the agencies in nearby mandis willing to buy. Eventually, Pyara Singh had to sell his produce on a no-profit-no-loss basis.

‘‘No more contract farming,’’ he declares. His nemesis was the fineprint in the contract, which said the agencies would pick up the produce ‘‘by January 2004’’, even though harvest is over by October-November.

To be fair, CF has had its success stories as well. Sarabjit Singh of Gurhe village near Jagraon and Buta Singh of Hoorna village near Samrala, Ludhiana, have prospered by growing sunflowers and hayola respectively. But they are in a minority in a countryside increasingly vocal against CF.

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