Jayant Oils and Derivatives, the country's largest castorseed processor, is planning to invest Rs 100 crore to increase the area under castor seed contract farming and for research in the Vidarbha region of Maharashtra, affected by a spate of farmers' suicides. | |
| The company will spend Rs 75 crore on project development, including supplying hybrid seeds, providing services on technological and harvesting techniques, procurement and profitable inter-cropping under suitable climatic conditions. |
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| The remaining Rs 25 crore has been earmarked for research and development, which includes in-house derivatives development and agronomical research. |
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| Contract farming is presently being handled in Maharashtra by the company's subsidiary Biocor Contract Farming Pvt Ltd. The company is, meanwhile, planning to raise $50 million through private placement. |
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| It is in talks with 3-4 players for the same, according to sources. |
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| "If need be, we may also enter the capital market to raise funds in 18-24 months," said Rajesh Kapadia, managing director. |
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| As castorseed can be grown in semi-arid regions and in areas prone to drought and floods, the crop can be intercropped with a number of others including ginger, soya, turmeric, cotton, sugarcane, tur and vegetables. |
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| Intercropping ensures optimum utilisation of land and increases the income of farmers without affecting their main source of income (crop). |
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| According to Kapadia, assured free hybrid seed supplies, guidance for sowing, maintainance and harvesting coupled with procurement at Rs 12 a kg against the market price of between Rs 14 and Rs 20 a kg would help farmers meet their financial obligations. |
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| He said the crop was being procured at a lower price to offset the company's expenditure. "The company is incurring a total expenditure of Rs 5-6 per kg for various services provided to farmers. Hence, the crop will be procured for Rs 12 a kg." |
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| The company started contract farming two years ago with farmers having less than two acres of land. It now has 20,000 acres of farm land under castorseed and expect to reach 500,000 acres by 2009-10. |
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| India accounts for about 80 per cent of global castorseed and oil production and exports. Its output varies between 750,000-900,000 tonnes of castor seed with an average oil content of 45-48 per cent. |
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| The European Union is the largest consumer of castor oil accounting for 120,000-150,000 tonnes followed by China with 110,000-120,000 tonnes and India at 90,000-100,000 tonnes. The US consumes in the range of 45,000-50,000 tonnes of castor oil annually. |
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| Jayant Oils has tied up with Maharashtra Hybrid Seed Company (Mahyco), Nath Seeds and Maha Biz for the supply of hybrid seeds and IIT-Kharagpur, Punjabrao Deshmukh Agriculture University for R&D. |
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