SPECIAL FEATURE: MAHARASHTRA

Cheering up the farmer

LATHA VENKATARAMAN

Investment opportunities in the food processing industry bring Maharashtra to the forefront of the agri-business sector.

PAUL NORONHA

In a sunflower field in Nashik.

CRITICS are wont to point out that Finance Minister P. Chidambaran's emphasis on the outcome and not just the outlays is populist, but for the farmer in India's hinterland the measures spelt out in the Union Budget for 2005-06 bring cheer.

This time around, intent and allocations seem to be at a higher level. The government appears serious about commencing the National Horticulture Mission, which it announced in the last budget. The Finance Minister has allocated Rs.630 crores in 2005-06 for the Mission, which will work towards creating linkages from the farm to the consumer. The National Horticulture Mission is expected to kick off activities on April 1, 2005.

The Finance Minister has also increased the allocation for the Accelerated Irrigation Benefit Programme (AIBP) by 71 per cent to Rs.4,800 crores during 2005-06. The government not only has recognised the importance of irrigation for sustainable growth in agricultural production but is also focussed on creating a road map for agricultural diversification. The road map will focus on fruits, vegetables, flowers, dairy products, poultry, fisheries, pulses and oilseeds, the Finance Minister said in his Budget speech. In that endeavour the government is intent on increasing public and private investment.

The measures spelt out in the Budget could take India into a leadership position in the trade of processed fruits and vegetables. The Scheme for Strengthening Agricultural Marketing Infrastructure outlined in the Budget could help in developing efficient marketing networks. Though India is one of the largest producers of fruits and vegetables, its share in the global trade of processed fruits and vegetables is less than 1 per cent. The government therefore believes that there are investment opportunities in the food processing industry.

India's potential in this industry was recognised several decades ago when the government of India set up the Maharashtra Agro-Industries Development Corporation Ltd (MAIDC) in 1965, primarily to provide support to the food processing industry. It has set up a food park in a five-star zone of the MIDC Butibori Industrial Area in Nagpur. The food park has a number of facilities such as cold storage and godowns, and those for quality control, effluent treatment and food testing. The complex is expected to be commissioned shortly.

The Maharashtra government has also been converting fallow land for horticulture cultivation. The MAIDC has been an active player in the fertilizer and pesticide market in the State. It also trades in complex fertilizers. Its pesticide sales in the State are around Rs.40 crores. But its presence in the overall pesticide market of the country is very small, with a 2 per cent share. Maharashtra's strength in floriculture has also been recognised by the State government, which has set up a flower auction market at Goregaon, Mumbai.

The Maharashtra Hybrid Seed Company (MAHYCO), which produces and markets a range of seeds, believes that the yield per hectare needs to be increased to cope with the growing need for food. The increase has to come from increased yields of major crops grown on existing cultivable lands. One of the approaches adopted by MAHYCO is R&D to develop new seeds. It has a joint venture programme with the U.S.-based Monsanto Co. for bringing into the country genetically engineered cotton containing the `Cry1Ac' gene from the bacterium Bt. MAHYCO is also involved in mining microbes and plants for agronomically useful genes from indigenous sources, to be introduced in crop plants, according to its web site.

Mahanand Dairy, run by the Maharashtra Rajya Sahakari Dudh Mahasangh Maryadit, started functioning in 1983 with a milk-handling capacity of four lakh litres per day (LLPD). The capacity was expanded to six LLPD during1997-98. At present, it distributes eight lakh litres a day. The current milk distribution represents a tenfold increase over the last 20 years. This jump is attributed to the demand for Mahanand Milk in the Mumbai market. The dairy also has milk-processing units in Nagpur (40,000 litres), Wardha (10,000 litres), Pune (25,000 litres) and Kudal (25,000 litres).

Mahanand Dairy has been working on reducing water consumption and energy use. It makes use of non-conventional energy as a means to conserve energy. Mahanand Dairy uses a 25,000-litre-capacity solar water heating system. This has saved around Rs.8 lakhs a year, a company statement said.

MAFCO, set up in 1970, is yet another entity of the Maharashtra government, engaged in the processing and marketing of frozen fruits and vegetables. However, the State government plans to divest its entire 100 per cent shareholding in MAFCO.

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