February 22, 2020
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For Pepsi, It's Hot Potatoes All The Way

MNCs in the food sector may be pariah for the swadeshi brigade, but Punjab farmers swear by them.

For Pepsi, It's Hot Potatoes All The Way

IN a sunny spring morning, potato farmer Satguru Singh, 35, sits outside the Pepsi Foods potato chips plant at Channo village. "We were not happy with the middlemen. They would not pay us on time. But now I'm happy," he beams, as a dozen more farmers line up their produce at the plant gates.

Unseasonal rains affected the harvest, but Pepsi-supported farmers aren't worried. They were given the potato tube by Pepsi and under Pepsi scientists' guidance, they have had a bumper crop. Against the average of about 17-18 tonnes per hectare, Satguru has done 25, inching closer to the international mean of 30. Suppose the new government threw out foreign potato chip companies? Satguru is baffled: but why? he asks. He isn't sure what he can do to prevent such a step; maybe he'll write to the prime minister, he muses.

MNCs in the food sector may be pariah for the swadeshi brigade, but the Punjab farmer is willing to vouch for them. In fact, the government's failure to provide farmers with the latest techniques have become the MNCs' opportunity. Potatoes, chillies, garlic, tomatoes—their farming methods are all now under MNC microscopes. The target: improve produce as well as quality.

Says Dr J.S. Grewal, consultant to Pepsi on potato operations, and former director of Central Potato Research Institute: "Production is just 50 per cent of the job, marketing and post harvest are the rest. These cause the real problem for the farmer, forcing him into the arms of the middleman at the local mandi." Adds Abhiram Seth, executive director (exports): "We have built a relationship with the farmer where he can trust us."

What attracts Punjab farmers, already nearly 1,400 in number and growing rapidly, to Pepsi, other than access to better farming methods developed by Pepsi laboratories, is the assured price the MNC offers. The farmer is told in clear terms that the price he would be getting would probably not be the highest the produce could fetch at the local mandi. But it's a full guarantee of picking up the produce, timely payment and returns. If the farmer has a bumper crop, the excess supply drives down market prices. Here a fixed price per tonne helps him. If the crop fails, an assured return is insurance.

Bhupinder Singh, general manager at the Channo plant, says that the company is very careful about selecting farmers for contract farming: "Typically, we advise them to go for contract farming only on a part of their land. A good part of the produce is picked up by Pepsi while the farmer can sell the rest at the prevailing market price."

Pepsi already gets its daily potato requirement of 1,000 tonnes from its farmers. The effort now is to produce sugar-free potatoes to churn out chips that don't turn brown when deep-fried. In other words, Pepsi at its fully automated Sangrur plant is sparing no computer chip to ensure that potato chip quality changes for the better.

And it's not just potatoes, Pepsi wants chill-ies and tomatoes too. Where results are stunning. Punjab's annual tomato production has increased from 28,000 tonnes to 128,000 tonnes; average yield is up from eight tonnes to 20. In chillies, per acre yield has shot up threefold. All these with a cumulative investment of just Rs 30 crore from Pepsi, part of which is incurred when Pepsi field trial executives visit farmers to work closely with them, particularly in the case of chillies. The company is now looking at carrot and ginger. Carrot juice and paste and ginger paste are in great demand in the Far East.

A quiet helping hand has been lent by the Punjab Agricultural Export Corporation. Two weeks ago, the corporation was entertaining executives from Cargill Seeds, a company anathema to the swadeshis, to help Punjab farmers improve the quality of wheat.

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