Pepsico to raise area under contract farming for potatoes

Food and beverage major Pepsico is planning to increase its sourcing of raw materials from contract farming and venture into new states regarding this.

The company's foods business unit, Frito-Lay, procures 50 per cent of potatoes, required for making chips and strips, from contract farming in eight states across the country.

"We have 12,000-15,000 acres under contract farming producing around 60,000 tonnes of potatoes and our plan is to increase the acreage and also venture into other states under the system," Pepsico India Holdings Executive Vice President (Agro) Nishchint Bhatia said.

He said the company is planning for a pan-India presence under the contact farming model.

The company's plans with regard to contract farming comes close on the heels of Pepsico's global head Indra Nooyi's announcement to invest $500 million in the country over the next three years to double the company's business in India.

Pepsico had taken a series of steps, including amalgamating its beverages and snacks businesses under one umbrella and other initiatives like re-launching of its trademark fruit drink brand 'Tropicana', after Nooyi's announcement.

However, he refused to provide investment figures for the expansion of the contract farming system or number of expected beneficiaries and acreage.

The company is on track to developing two-three more varieties of potatoes.

"We have already developed two varieties of processing potatoes and two-three more varieties are in the pipeline," he said, adding that the company is also producing 2,000-3,000 tonnes of potato for quality seed.