Gujarat farmers look at alternative to groundnut

Poor realisation from groundnut in Gujarat may result in farmers switching to cultivation of alternative oilseeds like cottonseed and castor, traders and industry players said Monday.

Farmers may be forced to set aside 5-10 per cent of their total area under groundnut cultivation for other crops, they said.

"A bumper harvest of groundnut during the 2005 kharif season (July-November) and general bearishness in edible oils have led to very poor returns for the farmers in the state, whereby they might be compelled to shift to other more profitable crops like cotton seed in the next season," said G G Patel, managing partner, Deepak Enterprises, a city-based oil trading firm.

Groundnut oil prices have dropped to Rs 430-440 per 10 kg in February from around Rs 500 in October largely because of bumper output and general bearishness in the edible oil complex. As per industry estimates, groundnut production in Gujarat during the winter sowing season is likely to be around 2 million tonnes, up 33 per cent on year.

During the rabi season (November-March), production is estimated to be around 1.7 million tonne, up 200,000 tonne on year. Groundnut prices in Gujarat averaged around Rs 350 per 20 kg during the current season, down Rs 40-50 from the previous year.

In Gujarat, during the kharif season, groundnut was sown in 1.9-2 million hectares. "If there is a shift in acreage to cottonseed due to better realisation, then groundnut output in India's largest producing state might subsequently drop next season," said Bipin Patel, chairman, Groundnut Promotion Council of Solvent Extractors Association.

Cottonseed and castor are fetching better returns. "Moreover, crops like castorseed are sturdier and require less water, fertiliser, and other inputs and can also be grown in arid land," said Shvetal Vakil, head of SEA's castor promotion council.

Castor can also be harvested several times over," said Shvetal Vakil, head of SEA's castor promotion council.

Industry players said castor seed is already fast replacing groundnut as the choicest commercial crop of Gujarat farmers.

A recent study by AC Nielsen and ORG MARG said that in Gujarat, castor acreage is up 5 per cent to 333,000 hectares this kharif season. The production is also seen rising 16 per cent to 571,000 tonnes. In case of cottonseed, industry estimates total production to be around 8.5 million tonnes, up 24 per cent from a year ago.

"Castor and cotton seed derivatives fetch better realisation in the export market than groundnut oil because of growing industrial usage and higher demand for compound livestock feed," Vakil said.

Castorseed meal is being increasingly used in China as a compound livestock feed along side soymeal after de-toxification.

Supporting his views, Patel said that due to extensive use of hybrid pest resistance BT cotton in Gujarat and Maharashtra, farmers prefer to shift from groundnut cultivation to cotton crop. Groundnut crop needs proper water at every 25-day interval, while cotton and castor crop can withstand low soil moisture.