The agribusiness incubation concept has been successfully demonstrated in setting up a farmer-managed seed enterprise. A farmers’ organisation in Tamil Nadu, India, has set up a professionally managed seed enterprise with mentoring and handholding by ICRISAT’s Agri-Business Incubation (ABI) Program. Apart from investing in the venture, ABI also provided support across the entire value chain from introducing seed varieties to help with branding, marketing and promotion activities.
The Kazhi Kadaimadai Farmers Federation (KKFF) ventured into seed production in 2008 with funding assistance of Rs 0.75 million (US$12,283) under the ABI program. This support was for procuring seed processing machinery. ABI also assisted KKFF in obtaining a corpus fund of Rs 0.2 million (US$ 3,275) for operations under the Technology Development Board’s (TDB) funding scheme of the Department of Science and Technology (DST), Government of India.
Under ABI’s guidance and training KKFF operates like a company governed by farmers and managed by professionals like executive director, technical officer, accountant, etc., who are engaged and employed by the federation. Every farmer member of this federation now earns an additional income of Rs 12,500 to Rs 17,500 (US$ 201 to 283) per hectare while KKFF generates a net profit of Rs 0.6 million (US$ 9,826) from an annual turnover of over Rs 12 million (approx. US$ 200,000).
“The lack of good quality seeds required us to start a seed business program. We collaborated with ICRISAT in 2008, and they helped us with business plan development, assistance in establishing our seed-processing unit, branding, and seed promotion activities. They also assisted us with selection of seed entrepreneurs and facilitated new seed varieties through the Tamil Nadu Agricultural University (TNAU), provided technical assistance and field exposure visits for our farmers,” said Mr AV Poomurugesan, Executive Director, KKFF.
In 2009, KKFF established its seed processing plant and registered its own brand of seeds ‘Pudhan’. Seed production was initiated in 15 hectares of land, which has now increased to about 100 hectares, resulting in the production and sales of over 300 tons of seed annually.
“This initiative has the potential to create a system which can be replicated among more farmers. It is a business proposition for the farmers and by the farmers to promote agricultural development with market linkages and to tackle the challenges faced by farmers, besides providing a model for others to emulate,” said Dr Kiran Sharma, CEO, Agribusiness and Innovation Platform (AIP), ICRISAT.
KKFF had also promoted the cultivation of ICRISAT’s groundnut variety, ICGV9114 early this year as a summer crop. This was well accepted and certified groundnut seed was supplied to the local farmers and to the government agricultural extension center (Krishi Vigyan Kendra) in Kanchipuram, Tamil Nadu.
KKFF started in 2006 as a post-tsunami response program to facilitate rehabilitation of the affected communities in Nagapattinam area. With 25 members, KKFF initially started paddy seed production by sourcing breeder and foundation seeds from TNAU, Coimbatore, India. The quantum of seed produced has grown substantially since 2006 and they are now able to meet more than 10% of the seed demand in Nagapattinam district.
KKFF now has over 900 farmer members, including more than a hundred seed entrepreneurs. This has spurred many more local farmers to turn into seed entrepreneurs, paving the way to Inclusive Market-Oriented Development (IMOD).
Commenting on the growth of KKFF, Mr SM Karuppanchetty, COO, ABI program says, “ICRISAT aims to enhance the capacity of farmers through promoting FPOs in agribusiness. The number of farmers involved by KKFF; area brought under seed production; quantity of seed produced; and revenue has increased tremendously ever since our intervention in 2008. Farmers have realized more revenue from seed production compared to normal grain production, thereby creating interest among fellow farmers to take up seed production.”
To ensure additional financial support and cater to the welfare of its members, KKFF also promotes crop insurance and the cultivation of crops like black gram as rice fallow, besides vegetables such as cluster beans, eggplant, and tomato.