SBI signs deal for contract farming

State Bank of India (SBI) has signed a tripartite agreement with industrial groups and farmers to develop contract farming system in Maharashtra at a total investment of Rs 101 crore.

"SBI (Mumbai Circle), which includes Maharashtra and Goa, has signed agreements with 20,000 farmers for 11 products like onion, sugarcane, grapes, dairy products and babycorn at an investment of Rs 101 crore," SBI chief general manager A Ramesh Kumar said yesterday.

While SBI would take care of the financial needs of farmers, buyers or industrial groups would provide guarantee for the purchase of entire produce, he added.

The agreement not only covers production but post-production activities like cold storage and supply chain to complete the link, he said.

SBI has financed contract farming ventures in Vidarbha with Ballarpur Industries, which is a major paper producer. "Farmers would grow bamboo and subabool for the Ballarpur mills located at Chandrapur district for which the bank has signed an agreement for 2,000 acres of land, " Kumar said, adding a similar area might be added every year.