Potatoes, grapes and Mahindra

Chennai: If you thought only cars and trucks rolled out of the Mahindra stable, sample this: Mahindra grapes disappear from the shelves of European supermarkets within minutes of their display. So do their tomatoes, and soon seed potatoes are set to join the list!

In April 2000, the Mahindra group decided to leverage its engineering prowess to maximise the profitability of farmers. The new agro-business initiative was called Mahindra ShubhLabh Services Limited (MSSL).

With a view to empowering the nation's farmers, MSSL engages itself in a gamut of activities related to farm production such as seeds, fertilizers, chemicals, farm finance and agriculture extension service.

Recently, the firm also entered into an exclusive alliance with Holland-based HZPC BV, a 110-year-old company engaged in producing, marketing and exporting seed potatoes.

Days after the signing of the strategic deal, K. Sreedevi caught up with the MSSL Chief Executive Officer Vikram Puri.

With over 25 years experience in the industry, Puri was part of the first large scale contract farming programme in the country, and is a key member in most agribusiness committees of CII and Bombay Chambers of Commerce & Industry. Deeply involved in the roll out of a rural marketing network for Mahindra agro products and in developing the supply chain, he feels that agri-business has been the least hit by recession. In fact, he says, with the increased MSP (minimum selling price), the farmer's buying power has gone up.

Excerpts:

What is the 'strategic alliance' with HZPC?

The intent of the strategic alliance with HZPC is to develop it into a premium seed potato player in India. Potato is the fourth largest crop in India and is planted over 3.8 million acres. India has a great production opportunity for high quality seed. The seed so produced is presently marketed in the domestic market only. This alliance aims to:

Help build quality production systems and protocols for India and overseas markets.
Introduce IPR varieties that are bred via the HZPC network into India - following govt /CPRI approvals
Develop export markets using HZPC's distribution network in various parts of the world. (They sell in 73 countries across the globe).

‘I will live for 122 years’

And what are the 'Mahindra-HZPC' co-branded products that have been lined up?

The co-branded products will be seed potato in a twin brand - both Mahindra and HZPC logos will feature on the bag. For specialist requirements - (a) carrying the name of the variety that is given by HZPC in its overseas markets - such as for crisps, french fries or processing (high dry matter content) or even for table consumption.

How is the company's seed potato initiative faring and what are its export opportunities?

The seed potato industry in India is in its nascent stages of development. It is influenced by table potato prices which are cyclical in nature. Therefore, seed prices are also cyclical. So, at present, there is an element of price cycles in our business.

However, we are addressing this by finding ways and means to reduce price cycles - by balancing the portfolio of products - e.g. crisping seed is less cyclical as it is supported by institutions like Pepsi & ITC. Export volumes operate against fixed prices and valuations are attractive. Lead times to develop supply, however, are long.

Further, table exports can be developed and have the potential to lead to symbiotic relationships with farmers which can reduce price spikes both for seed and table purposes, etc. Export opportunities exist for seed potato for markets like Sri Lanka, Bangladesh, Pakistan, Indonesia, Philippines, Egypt, Saudi Arabia, Kenya, etc.

No child`s play this

What are the acquisitions that are being looked at in vegetable and cereals market?

Quite a few of them in the vegetable seed industry but too early to disclose.

Can you dwell a bit more about your biotech lab in Himachal Pradesh?

This is a high technology tissue culture-based mini-tuber facility which uses the nutrient film technology to produce high quality mini-tuber of potato for subsequent seed production. Every time seed potato is planted into the ground, it gains in what we call a 'generation'. In doing so, it picks up a disease load. Successive disease loads in advanced generations lead to loss in yield potential. This facility will produce seed in soil less culture and the product will be called 'generation 0'.

All products will be virus indexed through Eliza tests and certified by independent US-based labs for six viruses which are known to reduce yields. So, the resultant product will be a highly clean product.

'IITians created 20 million new jobs'

How do reach your research offerings to the Indian farmer?

Research offerings reach the Indian farmer through the seeds. R&D leads to production of better varieties such as resistance breeding, quality breeding, stress tolerance, etc. It takes a long time to introduce varieties of potato and spread this technology to farmers. This technology helps collapse the time window - from say 8-9 years to three years - and has the capability to reach large acreages, fast.

What are the company's experiences with high value segments of the industry such as organic farming and medicinal crops cultivation etc.?

Organic & medicinal crops prospects are good and we stay informed of issues to the extent possible. However, at present, they are not a strategic priority.

Has the global recession had its impact on the company's business too?

Exports are showing signs of weakening a bit. On the domestic side, unless you have a commodity slide due to oversupply, in our businesses the agro economy has not shown any signs of a slowdown. In fact, with increased MSP, the farmer's buying power has gone up. Therefore, to sum up, so far so good.