Farming fast food

Taking a closer look at contract farming initiatives in India, Binny Sabharwal spoke to Amit Jatia, MD, McDonald's India, and Jaideep Mukherji, Country Manager, McCain India.

Our pursuit of the companies involved in agri-business and contract farming led us to McCain Foods, which is undertaking potato farming in Gujarat, in association with the Indian arm of the Fast Food major, McDonald’s. The venture was undertaken in consonance with McDonald’s policy concerning the local sourcing of all its requirements.

Consequently, McCain being the international supplier of McDonald’s, started working closely with farmers in Gujarat to develop process-grade varieties of potatoes used for manufacturing its French fries and potato wedges.

“Before McDonald’s started its business in India, we started evaluating the quality of products available, whether the products we need will be available in the marketplace or not and then we realised that there was no lettuce and the potato grown in India was better suited for home cooking and not for processing. Therefore, we asked our international experts to come to India and identify local Indian farmers to work with.

With their professional guidance, we were successful in growing lettuce in Ooty and Pune. This was followed by a partnership with McCain to grow potatoes in Gujarat,” say Amit Jatia, MD McDonald’s India.

“In the case of lettuce we started working with two farmers in Ooty and one near Pune. As there was nobody really growing lettuce, we worked with these farmers, provided them with the requisite technology and developed the product. As we were opening restaurants all over the country, we had to branch out to other regions as well to avoid logistical problems. Therefore, we started a growing programme in Himachal Pradesh, Delhi and Kathmandu,” he added.

For lettuce cultivation, McDonald’s has provided assistance in the selection of high quality seeds, exposed the farms to advanced dripirrigation technology and helped develop a refrigerated transportation system to provide fresh, high quality lettuce to their restaurant locations all over the country.

Speaking on the necessity of potato cultivation in Gujarat, Mr Jatia said, “While conducting market research for the availability of a particular variety of potato for manufacturing our French fries, we found that the Indian farmers planted the seeds close to each other hoping that the more seeds they plant, the higher will be the production.

But that was not allowing the potatoes to grow in manner that was suitable for us. We taught them to leave enough space while planting seeds which allows the potatoes to grow much bigger and larger and suits our requirements. We also provided them seeds, identified the right climate and soil for the growth, and eventually narrowed down to the Gujarat state.

“The farmers were very progressive; the minute they understood the technology, they adopted it. Then the other key channel was to get an outlet for the farmers to market their produce. So we got a mini-processing facility established.

Now the farmers have a buyer, which is McCain, who then supplies to us. We need our French fries and wedges on time and it is the supplier’s responsibility to manage everything that goes with it. McCain has people out in the field every second day so that they can manage our delivery.”

After establishing the association between McCain the marketer and McDonald’s the customer, we spoke to Jaideep Mukherji, Country Head and Regional Director, McCain India, to determine the exact nature of the company's association with the farmers.

What is the nature of the contract between McCain and the farmers? Do you buy 100 per cent of the produce or is the farmer allowed to sell certain portions in the open markets?

As a policy, McCain never contracts 100 per cent of the production of a farmer. For example, if we need to ....

 

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