In a deal that could revolutionise potato seed production in India, Mahindra Agribusiness has announced that it has entered into a joint venture agreement with Dutch potato specialist HZPC Holland to offer premium seed potatoes to the country’s farmers. The companies say the new venture will boost farmers’ productivity and lead to improve prices.
Mahindra and HZPC will own 60 per cent and 40 per cent of the new company respectively, subject to the deal receiving the necessary regulatory approvals.
India produces around 43m tonnes of potatoes a year, of which around 10 per cent is used as seeds by farmers. This means the potential size of the seed market is over 4m tonnes, of which only an estimated 250,000 tonnes is currently organised. The country’s seed potato industry is forecast to grow by around 6 per cent per year in the coming years.
“To further grow this business, we will require special technology and will also need to put in some investments in the supply chain,” said Ashok Sharma, chief executive, agri & allied businesses of Mahindra’s parent company Mahindra & Mahindra Ltd. “Not only will [the deal] help in our quest for delivering farmer prosperity through agronomy and better technology, it will also open up global markets, thus providing our farmers with better returns.”
The new company will build a state-of-the art-facility to produce high quality mini-tubers and early generation seed potatoes that will be offered to farmers.
Gerard Backx, chief executive of HZPC, said the venture would provide high quality seeds and new varieties to potato growers in India and open up new export opportunities for them. “We have already sent 19 of our latest varieties from Europe for testing in India and are sure that some of them will go a long way in enhancing farmer productivity in the country,” he added.
With its strong focus on research and development, HZPC will bring access to the latest technology and new varieties to Indian farmers, while for its part, Mahindra will contribute to the joint venture through its contacts with farmers, widespread domestic distribution network and agronomy expertise, the companies said.
Mahindra started its seed potato business in 2005 and today works closely with over 600 seed potato growers through contract farming arrangements. The company supplies farmers with high quality mini-tubers which are produced at its facility in Palampur. The seeds are bought back from the farmers at a minimum guaranteed price and are further distributed to a network of potato growers in Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra and West Bengal.
HZPC is a grower-owned global company that develops potato varieties to suit local climate and soil conditions. Set up over 100 years ago, it employs 250 people in over 10 countries and has a turnover of €300m.