Alternate contract farming - Jatropha

Alternate Contract FarmingA STUDY - Jatropha

Contract Farming In India

• The concept of contact farming is not new to India. In the 19th Century, India produced cotton and indigo to supply raw materials to European nations for their blooming textile industry.

• Contract farming is an agreement between a farmer and an agri-business firm that binds the farmer to supply raw material, i.e. the harvest, to the latter at an agreed price. The agri-business firm, on its part, confirms to supply credit, packaging materials, crop sprays and arrange transportation.

• The agreement between the farmer and firm is mutually beneficial: the farmer acquires an assured market for his produce while firm is assured of raw material – risk mitigation being the aim.

• The aggregator, while selection of the farmer/farmer groups, checks for reliability, knowledge, willingness along with land area, accessibility and facilities for processing, drying and storage. The model is used for food crops, horticulture, estate crops and livestock.

• The regulator of the model is either the Government or an NGO which ensure that laws and dispute-resolution activities are adhered to by both parties. Besides, they also ensure reduction in transaction cost, quality control, saving by farmers and research activities.

Jatropha

Part Used : Jatropha Seeds, Jatropha Leaves.

Habitat : Cultivated throughout India.

Product offered : Seeds, Oil

Uses : Jatropha is a small tree or shrub with smooth grey bark, which exudes whitish colored, watery latex when cut. It grows between three and five meters in height, but can attain a height of up to eight or ten meters under favourable conditions. Oil has a very high saponification value and is being extensively used for making soap in some countries. The oil is used as an illuminant as it burns without emitting smoke. Oil cake of Jatropha is rich in nitrogen, phosphorous and potassium and can be used as organic manure. It is a drought resistant shrub with a smooth grey bark.

It contains anti-cancerous properties. It is also used as an external application for skin diseases and rheumatism and for sores on domestic livestock. In addition, the tender twigs of the plant are used for cleaning teeth, while the juice of the leaf is used as an external application for piles. The roots are used as an antidote for snakebites. A decoction of roots and leaves is given for diarrhoea.Root bark is used in external applications for sore.

Why Jatropha ?

Business Model for Contract Farming can work well where the Post Harvest Processing Technology is difficult, and Supply is Greater than Demand (as in case of Aloe vera). In case of Jatropha, it is other way round. The Demand will be THOUSAND times the supply for next decade, and post harvest technology to extract oil, through a hand press, is very simple. A farmer will sell his seeds at good price, else he can crush the seeds himself and use Crude Jatropha Oil as Fuel Additive and to burn Lamps. Realizing this BP has terminated its Tie-up with D1 Oils of UK and Mission BioFuels had to wind up its operations in Mumbai. Jatropha is important to Uplift from Poverty, the Rural Poor in Developing Countries, supply of Fuel to Rural Population and Correcting the ill effects of Climate Imbalance occurring very frequently. This is a good Model for Charity in Poor Countries, with Charity Funds from Rich people from those countries, who have made millions abroad.

Why demand for Jatropha oil is so high from US and Europe

USA and Europe are by far the largest producers of BioDiesel in the world and more plants are under implementation very rapidly. Since USA and Europe have to comply with new Climate Change treaties, they need a lot of Green Fuel in next few years.

Palm oil has high cloud point / pour point and hence not suitable in freezing weather. Since properties of Jatropha oil are good as far as its cloud point / pour point are concerned, it is raw material of choice of BioDieselmanufacturers.

Jatropha oil is non edible and can be grown on non fertile lands. Jatropha requires a lot of cheap labour, hence it is not viable in US and Europe.

Socio Business Model

Scheme 1

The NGOs then process the seed cake to Bio Fertilizer in their centres, and sell it later. Villagers collect sufficient seeds, during harvesting period to last for a year, but crush these to get oil as and when required.

The NGOs set up Hand Operated Expellers like these, (which do not require electrical power) in their centres in rural areas. Villagers come to these centres with their bags containing any Oil Bearing Seed like Jatropha, Neem and Pongamia, (Non Edible oils for lamps), Mahua (Edible oils for Cooking) and crush the seeds themselves. The tribals carry the extracted oil home for burning these in oil lamps and for cooking. The villagers leave the seed cake in these centre.

Socio Business Model

Scheme 2

The same NGOs buy the oil, extracted as above and sell it to Temples, Hotels, Households for burning them in simple lamps, as a social cause. The NGOs also tie-up with fuel additive manufacturers and soap manufacturers for buying oil from them, at a specified rate. The profit from sale of oil is passed on to rural people as reasonably good price.

Live Examples

PRAGATI PRATISHTHAN in Thane district of Maharashtra, just 100 miles from Mumbai, works for Jatropha Plantation in number of villages, where they planted 10 million (1 Crore) Jatropha saplings, in every monsoon season, in the ADIVASI (Aboriginal) lands. The saplings were planted on non productive / barren land. With these plantations, they have reduced CO2 from atmosphere, and lent a small hand in reducing Climate Change Disasters. They planted in 10,000 Acre of land during the monsoon season starting June 2009.

An Electricity Generating set is now commissioned in the same village. The engine runs on 100% Jatropha Oil (Not Diesel or BioDiesel blend). It lights up Two Electric Bulbs each, in 50 houses of the village.

In the village of Chapaldi in Andhra Pradesh, India, women make fuel from jatropha seeds and use it to power the village's electricity micro-grid and irrigation pumps. Every family pays the women's association with 7 kilograms of seeds per week for electricity, while local farmers pay an additional fee to run their pumps. In 2003, the women leveraged their seeds even further when their association sold 900 tons of carbon-dioxide equivalent emissions reductions to Germany for $4,164 - the equivalent of a year's income for the entire village.

What should a farmer do?

A small farmer can set up a his own nursery in 1 to 2% of plantation area of his land. 1,600 saplings are required for plantation in 1 hectare (600 in 1 acre). He should set up a nursery in March (for plants to be ready by June). Seeds are sown in soil at a distance 150 mm in square formation. If nursery is started in any other time (for plants to be ready by June), seeds should be sown in soil at a distance 300 mm in square formation. The saplings should be grown in nursery till June and replanted only on onset of monsoon. There is no need of plastic bag for growing sapling. If nursery is set up in summer, it should be done under the shade of big trees. 2,000 kgs of Cow Dung is required for 1 hectare of nursery which is added to soil in the beginning. Soil should be moist at all the times with plenty of water. 1.5 to 2 kgs of seeds are required for 1,600 saplings.

Current Trend in Use of Jatropha Oil

The Jatropha Oil extracted by expeller is being marketed by us as Fuel Additive for fuel used for Diesel Generating sets. The users have found that when added to Petroleum Fuels, @ 20 to 50%, it improves the lubrication of Engine and reduces the noise of engine. We have the entire supply chain of Non-Edible Oil Seeds growers, oil production and Marketing.

New Usage Of Jatropha

Castor oil and Animal Tallow is mainly used for manufacture of Stearic Acid, and other derivatives. Since the price of Castor oil has shot up to US$ 2.5 per liter, price of Jatropha oil (which is technically oil of Wild Castor having similar fatty acid structure) at US$ 1.5 per liter is competitive for using it in place of castor oil. Most of the animal tallow is now used for manufacture of BioDiesel, hence its supply is greatly reduced. Pongamiaand Mahua oil can also substitute Castor oil to some extent.

Intercropping of Jatropha With Vegetable Plants

Jatropha Seeds

Aloevera growing wild underneath.Intercropping with Jatropha can bring bonus benefit to the growers as additional yield gets additional bonus profits...

This 20 acre Jatropha plantation has seen no care in the last two years

Extraction of Jatropha Oil from Seeds

Oil Used As Fuel For Diesel Generator

Leftover Seed Cake to be Used For Bio Gas Plant

The cake from Biogas plant is further

processed in a low cost Bio Fertilizer plant.

Conclusion

Jatropha has the potential to be a real game changer in the rural empowerment schemes. As it provides fuel from seed oil, gas from its waste cake and manure from the leftover.

Carbon credits can also be sold for extra income.

Replicable, and does not require any care after plantation of saplings.