SABMiller India

UB Group, SAB Miller take the lead in contract farming of malting barley, 21-July-2008

The bigwigs of the liquor industry are turning to Punjab and Haryana to fulfill the increased demand of barley and up their beer production. Where SABMiller has spread its roots in contract farming of malting barley in Haryana, liquor baron Vijay Mallya’s United Breweries is well established in Punjab.
The market leader United Breweries has been undertaking contract farming of barley in the districts of South and West Punjab for the last five years. A top company official informed The Indian Express that UB group has a contract farm area spread over 12,000 acres engaging about 5,000 farmers. “UB’s own developed varieties, including VJM 315, VJM 201, DRW-28, are grown there and entire produce is used for UB’s own requirement. We have invested close to Rs 25 crore in Punjab in this initiative over a period of time and we aim to cover the whole of Punjab gradually. We have also registered ourselves with the Haryana State Agricultural Marketing Board (HSAMB) for getting the license to start contract farming in Haryana,” said the official.
UB group also works with Pepsi which, through its contract farming initiatives in the northern part of the country, supplies the local varieties of barley. The company has its own malting plant in Punjab and has entered into an agreement with the Haryana State Cooperative Supply and Marketing Federation (Hafed) to run, on lease, a barley malt plant at Jatusana in Rewari district.
The official said, “We are upgrading the plant and it is likely to be functional by year end. The plant, spread over six acres of land, was commissioned in 1989 with an installed capacity of 9,000 MT per annum. However, production was stopped in 2002 and hence it remains non-functional. As per the agreement with Hafed, the capacity will be upgraded to 10,000 MT per annum.”
On the other hand, SABMiller India is giving a leg up to the cultivation of malting barley in Haryana for over a year in collaboration with HSAMB. The company has engaged about 400 farmers across 2,500 acres to do contract farming of barley in Gurgaon, Jhajjhar and Sirsa districts. Discussing about the success of the initiative, Sundeep Kumar, Director of Corporate Communication and Affairs, SABMiller said, “In the first year, we had a modest success of 35% of member farmers selling back barley to us in contract farming.
The farmers have appreciated our crop monitoring and advisory services and fairness in buy-back practices and are keen to join us in our barely development. We intend to expand in Haryana from next Rabi season. We are planning to intensify our presence in Gurgaon and Sirsa districts and extend our activities to Fatehabad and Hisar districts also.” But SABMiller doesn’t seem eager to enter Punjab yet. Sundeep said, “Area under barley in Punjab is stagnant at about 19,000 hectares over the last few years. We are prioritising the states where there is more potential for barley growth and Punjab is currently low on our priorities.”