How Farmers Have Begun Reaping Better Economic Benefits Under ITC Agri Division Projects

Eight years ago, Tenchu Venkateswarulu of Damaracherla village in West Godavari district of Andhra Pradesh had to travel over 200 kilometres to Guntur to sell the chillies he grew on his farm. Even if he had good quality produce, he had to settle for a price dictated by traders at the market yard.

Not anymore. Today, chillies produced by Venkateswarulu are picked at the farmgate by the Kolkata-based diversified corporate firm ITC Ltd. His produce have been certified food-safe chilli and for the effort he puts in to produce the food-safe quality, he is being given incentive.

“Say for example, chilli quotes at Rs 10,000 a quintal at the Guntur terminal market, ITC not only pays me the market price at my farmgate but an additional Rs 4,000 as incentive for the quality of my produce,” says the 40-year-old farmer. Venkateswarulu owns six acres of land in his village and has taken another six acres on lease to grow chilli.

“There are some 150 acres in our village which have come under the ITC project and we have all benefited from it. Not only are we getting a good price but productivity on our farm has also gone up,” says Venkateswarulu.

What the Agri Division of ITC does under the Chilli Value Chain project is to engage farmers through extension, train farmers in producing food-safe chilli, maintain soil health, preserve water, train them in tray seedling, integrated pest management, post-harvest management, test packaging product and procure at farm-gate.

While Venkateswarulu says productivity of chilli on his farm has increased to 2 tonnes from 1.5 tonnes since he has come under the corporate’s fold, the Agri Division of ITC reports an average 15 per cent increase in productivity under its Chilli Value Chain Development Project. It has also resulted in 28 per cent rise in production of high grade chilli that led to sharp rise in growers income.

According to S Sivakumar, group head of ITC Agri Division, under this project, the company focuses on making farmers produce food-safe chilli at globally competitive prices for exports to the European Union and the US. “This has provided a win-win outcome for all - growth in exports, substantial increase in farmers income and integrity of environment,” he said in an email response to Swarajya.

The project has been in the making for quite some years in Andhra Pradesh. From 2017-18, ITC has added Prakasam, Guntur and Kurnool districts in Andhra Pradesh and Belgavi district in Karnataka. The project for these districts, roping in 800 farmers, will run up to 2019-2020.

For farmers like Venkateswarulu the incentive given for the food-safe chilli translates into an additional of over Rs 40,000 per acre. “Besides, I save on charges to take my chilli to the market,” he says. ITC says that average incremental income for farmers could be Rs 25,000 per acre.

Venkateswarulu says incentive for farmers to supply food-safe chilli depends on how they cultivate based on the inputs given by ITC field officers. Most of the farmers are assured of the best incentive if they stick to the guidelines given by the field officers.

While these are benefits that can apparently be seen openly, there are unknown benefits too.

For instance, farmers who are under the ITC chilli value chain project are advised by ITC field officers to go in for specific type of crop inputs that are environment-friendly.

“The crop inputs are not only economical but we also get discounts as the procurement is made as a group by us,” says Venkateswarulu, adding that the project has also helped them to cut the water usage, which ITC says is up to 30 per cent lower than normal.

If this is one part of farmers’ success story in getting better income in southern India, then there is another one developing in the northern part.

Until a few years ago, Lalji Yadav of Baksehra (pronounced Basera) village in Prayagraj district of Uttar Pradesh was cultivating two crops - rice and wheat - on his farm. “I have joined ITC project and am seeing an additional income of Rs 16,000-17,000 per acre in the last couple of years,” says the 52-year-old farmer.

Yadav is among the 21,000-odd farmers who have enrolled themselves for the project to enhance quality and productivity of wheat.

According to ITC, wheat production in eastern Uttar Pradesh has been affected by cultivation of old varieties with farmers relying on their own seeds they had saved and delayed sowing. The corporate’s agri division, under the project to increase quality and productivity, suggested new short-duration variety of paddy to be planted during the kharif season starting 1 June. Then, farmers were asked to go for zero tillage by directly sowing wheat in rows rather than clear the field and then sow.

This not only saves time wasted on tilling but also the cost of having to clear. “For me, there is a clear saving of Rs 1,500 to Rs 2,000 by adopting tillage,” says Yadav, adding that zero tilling also helps in timely sowing of wheat.

“We save at least 15 to 20 days in going for a short-duration rice and this also saves another five-10 days,” the farmer adds. That also gives farmers some time to go for a third crop once wheat is harvested in late March.

“We go for moong (mung bean) after wheat before we sow paddy. That gives me an additional income of Rs 8,000-10,000,” Yadav says, enthusiastically enumerating the benefits he has reaped since joining the ITC project.

Under the project to improve yield and quality of wheat, ITC helps farmers to plant location-specific high-yielding varieties, opt for zero tillage, go in for split dosage of fertilisers, spray muriate of potash, adopt pest management practices besides going for short-duration paddy, followed by zero tillage and wheat sowing and finally sowing moong during summer.

“The company has helped us to harvest our crop using combine harvester that helps us to further save Rs 2,000 to Rs 2,500 an acre,” says Yadav. Manual harvest takes more time and farmers have to deploy additional hands for it. On the other hand, the mechanical combine harvest helps in quick harvesting of crop and reducing deployment of farm hands to a great extent.

The wheat crop undergoes stress during high temperatures, particularly at the stage where the grain matures. So this project has a smart solution, making farmers spray muriate of potash at flowering and milking stages to overcome heat stress.

Sivakumar says the ITC calls this “Baareh Mahinae Hariyali” (12 months of greenery) or BMH project and has adopted an integrated farming approach using technology and extension services. “While the crop of primary interest to us was wheat, where quality and productivity improved, farmers income multiplied and soil health improved,” he says.

Sowing of pulses crop like moong helps in improving soil health. In the case of the BMH, ITC made the farmers see benefits in crop rotation by going for the third crop. Till then, at least 65 per cent of the area had followed the paddy-wheat cropping pattern. The farmers also lacked mechanisation and marketing facilities that the corporate firm has now been able to provide through extension of its famed eChoupal.

The eChoupal was developed by ITC over a decade ago to come up with an efficient supply chain system where the company procures wheat, soyabean and other farm produce from farmers. The system has helped the company set up its centres in rural areas, now covering 35,000 villages serving over 40 lakh farmers.

Sivakumar says ITC has a three bottom line approach that is aimed at improving economic, environment and social value. “ITC conviction in the approach led it to launch these project for farmers,” he says.

Besides the projects for wheat and chilli, ITC has also launched similar projects for potato in Gujarat, agro-forestry products targeting poor households, vegetables, seed potato in Uttar Pradesh and a project for open-pollinated crops.

ITC is spending on these projects, including through its corporate social responsibility schemes, that are seeing farmers in select villages reaping higher production and earning additional incomes.

Sivakumar, who is chairman of Technico Agri Sciences Ltd of ITC, says the advantage of these projects is that it would lead to higher income for farmers. In turn, this would translate into better demand for manufactured goods and other services, thus fuelling the country’s economic growth.

“At another level, the country’s food and nutrition security for the growing population is also directly dependent on agriculture,” he says.

There is some government participation, too, in these projects. The food-safe chilli project in Andhra Pradesh and Karnataka has been designed as integrated interventions along the value chain under the Public Private Partnership for Integrated Agriculture Development. “These projects are recognised as exemplars by the respective governments and are being showcased to other agribusiness companies and governments,” says Sivakumar.

On the other hand, NITI Aayog and ITC Limited have partnered to transform agriculture and water sector in the ‘Transformation of Aspirational Districts' programme which was launched by Prime Minister Narendra Modi last year.

“It is expected that over 2 lakh lead farmers in 27 districts will be trained as a part of this partnership, with multiplier impact on the farmers attached to these lead farmers,” the ITC Agri Division head says.

The Kolkata-based firm is looking to engage with farmers beyond crop production and market linkages. Currently, ITC is running two “comprehensive projects called Adarsh Grams and Climate Smart Villages” to build model villages across several states, says Sivakumar.

Various community development projects like Community Water Purification Plants that provide safe and clean drinking water to rural people, supporting building of household toilets as part of ITC's health and sanitation drive, solid waste management focusing on source segregation and minimising waste to landfills are some of the issues being attended to by ITC, he says.