ITC Ltd may invest Rs 2,500 crore (Rs 25 billion) in contract farming in Punjab.
The hotel-to-fast moving consumer goods major has had several rounds of discussions with the Punjab government and a formal announcement is expected shortly.
Punjab Chief Minister Amarinder Singh told Business Standard that ITC was one of the major companies to commit big-time money in the state for agro-processing. The others were Reliance Industries and Bharti.
Singh said the business models of ITC and Reliance Industries would be similar. Both companies would do contract farming and buy back the entire produce for their respective retail businesses.
Commenting on Reliance Industries' plan, the Punjab chief minister said the Mukesh Ambani-controlled company would invest Rs 6,000 crore (Rs 60 billion) to set up 54 rural hubs across the state. The company will also set up eight agro-processing units to supply fresh vegetable and fruit to West Asia and Europe.
"The company plans to set up three hubs each in 18 districts. RIL will also take care of education for the farmers as well. It has finalised 15 hubs so far and I am sure the remaining hubs will be finalised soon."
Sunil Mittal's Bharti, in collaboration with Rothschild is setting up a cold chain near Ludhiana.
The state government is not acquiring land for the proposed businesses of these companies. "The companies are taking over land n their own. The government is a mere facilitator," he said. These companies would help the state government in its efforts to diversify agriculture.
The stake government has taken several steps for improvement of the agriculture and allied sectors.
These include the establishment of Punjab Farmers' Commission, introduction of agriculture diversification programme through contract farming, establishment of a Rs 100 crore (Rs 1 billion) Agriculture Diversifaction Infrastructure Development Fund and enactment of the Punjab Agriculture Produce Market Committee Amendment Act, 2005.
The state government, Singh said, had so far received investment commitment of Rs 60,000 crore (Rs 600 billion). Half of this was for the housing industry while the other half goes to an array of industries.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
