Technico Pty Ltd!
ITC Agri-business Division!
March 2013!
ITC Technico works with over 1,000 farmers and supplies improved potato
seeds to Pepsi, McCain, Haldirams and Balaji for their value chain operations
with farmers. In Gujarat, ITC offers a buy-back option but gives farmers the
freedom to sell to the market.
Distribution of Farmers under ITC Contract Farming (India)
Uttar Pradesh
Gujarat
Number of
farmers
300
In one village
Punjab
Haryana
Maharashtra
Others
500
100
50
75
State
Potato
Potato
Average land per
farmer
2.5 acre
700 acre/30 farmers
Potato
Potato
Potato
Potato
2.5 acre
2.5 acre
2.5 acre
2.5 acre
Crops
ITC collaborations
In Gujarat, farmers can engage in contract with ITC
Technico or buy seeds and sell to others in the market.
ITC Technico works with small and medium sized potato
farmers, providing improved potato seeds, advice, and
procurement.
ITC Technico Services
•
•
•
•
•
An agri-biotechnological company involved in tissue culture, seed potato
Contract farming (2,000 potato producers –ITC and Technico)
Technical support to achieve high yields
Quality control
Support services through SMS, telephones, regular visits
to advise on irrigation, methods
•  Buyback of agriculture produce
•  Cold storage facility to farmers at a price
•  Works with 10,000 farmers annually
Technico revenues
(Rs. Million)
700
620
550
2010
2011
2012
Contract farmer
characteristics
•  Small landholdings: 1 to
2 acres, 2 crops per
year.
•  Selection of contract
farmers is based on
good agricultural
practices, references
from other farmers No. of contract farmers* and
Potato production amount (MT)
100,000
83,000 2,000
70,000 1,700
farmers
1,500
farmers
2010
farmers
2011
2012
* Includes ITC and Technico potato farmers
Farmers with an average of one to two acres
who work with ITC earn average net incomes
of Rs. 32,400 per acre.
Gross Margin per acre in INR, average production: 100 quintal
Potato type: Chick-Sona 1
Revenue/acre
Grade 1 (90 quintal) at 575 Rs/quintal
Grade 2 (7 quintal) at 300 Rs/quintal
Grade 3 (3 quintal) at 520 Rs/quintal
Transport (ITC to farmer at 18 Rs/quintal)
Expenses/acre
Seed
Fertilizer
Sowing
Rogging*
Sowing-harvest (labor at 200 Rs/labor)
Medicine, pesticide
Irrigation (3 labor at 200 Rs/labor)
Gross Margin
*Rogging: Mahindra (competitor) does not charge this
57,210
51,750
2,100
1,560
1,800
24,775
15,000
5,000
500
175
2,000
1,500
600
32,435
In a cluster of villages in Meerut, about 300 farmers work
with ITC on contract farming to produce and sell to ITC
improved potato ‘seed’ at an agreed price
Mapping value chains in Potato Farming - The Role of ITC
Input
Suppliers
Smallholders
Seeds of
better
quality
provided to
farmers at
special
price by
ITC
Farmer
type
ITC
Farmers
Land Use
Produce
Grow
potato from
October to
March
Produce
bought by
ITC
Medium
Insecticide,
Pesticide,
Fertilizer,
Weather
Information
Land
1-2
acres
4-5
Non-ITC
acres
Use
Market
Storage
Cold
Storage
Technology
ITC buys the
Advisory by ITC,
Contract
produce from the throughout the six
Farming
designated land month growth period
Private
Farming
Produce sold to
traders
Conventional
methods as per
experience
Retailers
Supermarkets,
kiosks,
etc
Consumers
Domestic
consumers
Price
Fixed in the contract
document, gives stable
income to the farmer
Market price, gives high
or low returns depending
on the demand
Some issues faced by farmers in ITC
Technico potato value chains
Fertilizer
prices
Contracts
Seed
quantity
Quality of
seeds
Issues
Potential improvements
Government removed nutrient
based subsidy (NBS) from
fertilizers. Cost of fertilizers
increased from Rs. 300 to Rs.
800. ITC has not revised prices
paid with change in input and
market prices
Farmers asking for higher
prices to reflect higher fertilizer
prices and changes in market
prices
Farmers required to use ITC
chemical kits with trust issues
ITC Technico should make clear
advantages of its chemical kits,
or not require use.
Farmers find that seeds supplied Seed quantity can be increased
is inadequate, resulting in less
by three to four bags per acre,
than full land use.
enabling increased yields
Outgoing seed quality better
than incoming, affecting
profitability
Fraction of quality seeds
should be distributed back to
farms for good produce