India mulls contract farming in silk to counter China

Banglaore, Nov 27 | Updated: Nov 28 2006, 05:30am hrs
Indian sericulture industry is all set to undertake contract farming in a big way to check silk imports from China.

The Central Silk Board (CSB), the apex body of the Indian silk industry, has drawn up a new strategy in this connection, which is expected to drive up the quality of the domestic silk while boosting the production manifold.

Talking to FE, CSB chairman H Hanumanthappa said that India imports around 9,000-10,000 tonnes of silk every year from China in addition to domestic production of 17,000 tonnes to meet a demand of 26,000 tonnes.

Although CSB is involved in various schemes to ramp up the silk production, Hanumanthappa said the demand is also growing year-on-year, making India dependent on the dragon country.

To overcome this, he said CSB has decided to attract large investments in sericulture industries by introducing contract farming through corporate bodies.

In fact Parliament passed the Central Silk Board (Amendment) Act, 2006 during last September facilitating several changes in the Indian silk industry.

Following this, the draft rules were sent to different state governments. After receiving opinions from the state governments, the CSB is expected to finalise the rules. The purpose of amendements is to produce, certify and distribute good quality eggs to farmers, ensuring that the reelers get good variety cocoons.

Following CSBs move, several corporates have come forward to set up giant silk reeling machines, which is mandatory for large scale contract farming. Interestingly, India would import reeling machines from its competitor China.

Currently, two major silk producing states Tamil Nadu and Andhra Pradesh have given their nod for corporate bodies installing giant reeling machines and tying up with sericulture farmers for contract farming.

The CSBs CEO and member secretary H Basker said that the board has received applications from 33 entrepreneurs in TN and six from AP, of which the CSB has permitted one each in both the states to set up Chinese reeling machines.

The complete unit for contract farming would cost Rs 3 crore. This include Chinese reeling machine, which costs Rs 1 crore, in which the CSB offers Rs 50 lakh as subsidy. Every unit, which should have tie ups with at least 300 farmers, could produce 60 tonnes of yarns a year.