in a bid to promote crop diversification, the Punjab government is venturing into contract farming of basmati rice, oilseeds and durum wheat (see: Down To Earth, February 15, 2003). The state-run Punjab Agro Industries Corporation (paic) will collaborate with Rallis India Limited, icici Bank and lt Overseas Limited for growing basmati on 12,140 hectares (ha) of land. The programme is slated to run for three years, but its duration could be extended by two years.

While lt Overseas will sell the rice under its Daawat brand name, Rallis India will impart advice on matters such as determining suitability of the area to be cultivated, selecting seeds and grading the produce. It will also be a conduit for icici Bank in providing insurance cover to farmers. "We get additional revenues by way of fees from farmers and commission for providing the link between the farmer and the lenders,' reveals Rajeev Dubey, managing director, Rallis India.

In yet another initiative, paic signed a memorandum of understanding with Escorts Limited to cultivate the three crops on 20,234 ha of land in 2003-2004. The company will provide a full range of agricultural inputs and extension services such as supplying seeds, pesticides, fertilisers and agricultural equipment to farmers.

"Punjab's diversification programme is focused on crops which either have an export potential or are scarce in north India,' says Himmat Singh, managing director, paic . Out of a total of 42 lakh ha of cultivable land, the state has allocated 10 lakh ha for crop diversification. The state government aims to meet this target by 2007.

The Madhya Pradesh State Agro Industries Development Corporation too is planning to grow potatoes on 28,000 ha of land under the contract farming scheme for the next five years. On its part, the Union government is thinking of formulating a model contract farming law soon.