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LATEST NEWS UPDATES | Tried, Tested, Failed: Why Farmers are Against Contract Farming -Shinzani Jain

Tried, Tested, Failed: Why Farmers are Against Contract Farming -Shinzani Jain

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published Published on Dec 20, 2020   modified Modified on Dec 23, 2020

-Newsclick.in

Farmers fear they will have to engage with big traders and agribusinesses on an unequal playing field where these giant corporations will be dictating the terms of engagement.

Approved by the government of India in 1988, the Pepsi project was launched to initiate a second agricultural revolution in Punjab. The effects of the first agricultural revolution had faded. Yields of major crops were low. A joint venture among PepsiCo, Voltas and the Punjab Agro Industries Corporation, the project was supposed to bring about diversification of agriculture by moving farmers away from cultivation of paddy and wheat to that of vegetables and fruits of various kinds. This venture was, in fact, brought in with large support from  the Bharatiya Kisan Union and the Akali Dal in 1988. By early 1990s, contract farming was put in place in Punjab with the entry of Pepsi Foods (a subsidiary of PepsiCo) into production of tomato and chillies. A local firm, Nijjer Agro Foods, had started tomato cultivation as well. By the late 1990s, the Pepsi Project had already disillusioned its former supporters and stakeholders – the Bharatiya Kisan Union, Akali Dal, Punjab Agro Industries Corporation and Voltas.  

After selling off its tomato facility to Hindustan Lever (HLL), Pepsi entered potato contracting in late 1990s. After having worked with hundreds of tomato and chilly farmers until 1997, Pepsi now worked with only about a few dozen farmers in chilly and potatoes each. It’s potato procurement from contract growers was restricted to a mere 10% of its total procurement. It was argued that the soft drink component of the project was to set up a total of seven bottling plants in Punjab. In the end, only one such plant was set up in the state. The farmers working with Pepsi also found that the seeds supplied by the company were inadequate in quantity. They also reported that the pesticides recommended by the company were both costly and poor in quality.

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Newsclick.in, 20 December, 2020, https://www.newsclick.in/why-farmers-are-against-contract-farming?fbclid=IwAR0k_4WmtjneRod3CO-PvgvRZR-FW0_w90vpJrubdh9PkqBNsVGzG2OxkOI


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