A number of leading corporates, including Reliance Industries, have evinced interest in corporate farming, which is expected to emerge as a new realm of interest to most corporates.

Rallis India managing director Vijay Rai said that the services have been kicked off recently, and, as part of a start-up operation, the division is providing services to small companies and medium-to-large-sized farm owners, involved in farming and farm-related agri-activities.

"The services will deal with a wide range of subjects involving improvement of yield, seed procurement, soil fertility or even macro issues about the agro economy and farm management or financing," said Rai.

While the company has yet to sign up corporates on its list of firm clients, Rai believes that a host of them will be waiting todiversify into corporate farming as part of a larger initiative.

Reliance, for instance, has recently evinced interest in corporate farming. The company plans to invest up to Rs 100 million in Madhya Pradesh. Rallis is providing services to internatonal seed companies, including the Dutch company Beejoo, on how to procure seeds, as per their specifications. "There are a number of queries on farm-related global issues which we plan to tap and cater to," said Rai.

Rallis has recruited a number of professionals to run the services. With the infrastructure already in place, the company is looking at reaping good returns from this business, feels Rai.

Rallis has interests in agrochemicals, pharmaceuticals, fine chemicals and leather chemicals. It also markets pesticides and fertilisers. With such a background, corporate farming was a related diversification for Rallis.

On sales of Rs 1,206 crore in 1997-98, the company posted a net profit of Rs 23 crore. The company focused on exports of agrochemicals andby introducing additional products and making new strategic alliances, Rallis achieved a 23 per cent growth last year.

Insight

Agriculture offers immense potential

With the government being compelled to open up the agriculture sector, companies like Rallis are gearing up to capitalise on the vast market. Seed patenting is now a forgone conclusion and sooner or later farmers will be forced to procure seeds from companies. Apart from government bodies there are very few companies who have the reach for marketing seeds.

Rallis is not the first company to come up with such a concept. Companies like Nagarjuna Fertilisers provide entire services to farmers from seed and other inputs procurement, to advisory services to selling of the crop. These services not only increase revenue generation but also enables companies to get ready buyers for their core products, in case of Nagarjuna Fertilisers it is urea, while for Rallis it is fertilisers and pesticides.