NAFED diversifies to seed business, enters contract farming

NEW DELHI: National Agricultural Cooperative Marketing Federation of India (NAFED) plans to double the turnover of seed business in 2007 after entering the sector last year.

"We aim to take seed business turnover to about Rs 80-100 crore from the current level of Rs 50 crore," NAFED Managing Director Alok Ranjan said on the sidelines of the cooperative's Annual General Meeting here today.

He said NAFED has signed MoUs with state governments of Tamil Nadu and Orissa to produce seeds through contract farming.

In Tamil Nadu, the cooperative would develop groundnut and a local pulse variety in 50 villages while in Orissa it would undertake groundnut and sesame cultivation through contract farming in 20 villages, he said.

NAFED last year diversified into seeds and fertiliser sectors sensing the mood in the market.

The diversification for NAFED was essential considering the fragile nature of price of commodities while procuring oilseeds and pulses, a NAFED official said.

"May be, we do not need price support scheme (PSS) as market prices of pulses and oilseeds are higher. We, therefore, need to focus on commercial activities to increase our turnover," Ranjan told the AGM.

NAFED's net profit dipped to Rs 1.77 crore in 2006-07 as against Rs 14.28 crore in 2005-06 despite registering a turnover of Rs 6,381 crore in 2006-07 against Rs 3,186 crore in 2005-06.

NAFED is the main agency to operate government's PSS for pulses, oilseeds and other crops by procuring at the support price when the market prices fall.

Earlier, NAFED Chairman C B Holker told the AGM that the cooperative has stepped up its activities in the area of infrastructural development by taking up construction of cold storages and general purpose warehouses at various strategic locations in the country.

Ranjan told reporters that NAFED is in the process of constructing three warehouses of 10,000 tons capacity each in Madhya Pradesh and Rajasthan, While two 'packhouses' are being set up in Madhya Pradesh.

Commenting on the high prices of onion, he said the Kharif crop would arrive in the market by October 15, after which the prices would start softening. Ranjan said that onion production is expected to be 15-20 per cent higher in the current season.

India's onion production in Kharif 2006 was 13.17 lakh tons.