Page 265 - DMGT509_RURAL MARKETING

Rural Marketing

Notes BILT

Paper industry depends on the agriculture sector for the availability of its raw material. For its
paper unit in Jeypore, Orissa, BILT had to get wood from distances ranging between 500-1,000
Kilometers resulting in high freight costs and delays. In the year 2000, BILT started farm forestry
for its raw material. In this farm forestry the company got in to buy back arrangement with
marginal farmers to grow eucalyptus for which it provided seedlings. In this social forestry
initiative over 9,000 farmers are involved.

DSCL

DCM Shiram Consolidated (DSCL) has put in place a relationship model for ensuring supply of
sugarcane for its sugar production business. With improved inputs, better technology and modern
farm practices, the company achieved a sugar recovery of 10.4 percent, the fourth highest in the
country, for the financial year 2004-2005. DSCL is also employing information technology tools
for dissemination of information to enable farmers to increase their productivity through better
cropping practices. The improved sugarcane production is leading to increased incomes for
farmers in Uttar Pradesh in the last 7-8 years.

GGCL

Thapar Group’s Global Green Company is helping farmers in Andhra Pradesh and Karnataka to
grow gherkins. The company markets 30,000 tonnes of gherkins and has a contract farming
arrangement with 12,000 farmers. The business model has enabled the company to earn
substantial hard currency from international market. Over 95 percent of GGCL’s products are
exported to 23 countries.

MAHINDRA

M&M’s Shubh Labh network is spread over eight states with 36 outlets. Only three centers are run by
M&M and the rest are franchisees. The company retails agri-inputs, including M&M brands through
Shubh Labh. It also undertakes contract farming in over a lakh acre. In the year 2003, it grew oilseeds
and cereals and in the year 2004, it grows horticultural products, aromatic plants and flowers. It also
offers borrowing support to farmers through the Mahindra Krishi Vihar, a platform for banks to
provide loans to farmers with minimum documentation, quick sanctions, and attractive interest
rates. For banks it is a good way to make their rural lending safer without too much overhead.

TATA CHEMICALS

The company undertakes contract farming in 15,000 acres of land. It grows paddy and vegetable
seeds in Uttar Pradesh and Punjab and fruits in Karnataka and Maharashtra. The produce is sold
to retail chain or exports.

CHAMBAL FERTILISERS

In the year 2002 Chambel Fertilisers entered the food processing by taking over a food processing
unit in Haryana. The unit processed and freezes fresh vegetables and markets them under Ever
Fresh Brand.

Task Discuss the upcoming Financial and Durable services in Rural Sector.

260 LOVELY PROFESSIONAL UNIVERSITY