1. Alternate Contract Farming
A STUDY - Jatropha

2. 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.

3. • 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.

4. 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.

5. 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.

6. 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 BioDiesel
manufacturers.
 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.

7. Socio Business Model
 Scheme 1
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.
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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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. Pongamia
and Mahua oil can also substitute Castor oil to some
extent.

13. Intercropping of Jatropha With
Vegetable Plants

14. Jatropha Seeds

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

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

17. Extraction of Jatropha Oil from
Seeds

18. Oil Used As Fuel For Diesel
Generator

19. Leftover Seed Cake to be Used
For Bio Gas Plant

20. The cake from Biogas plant is further
processed in a low cost Bio Fertilizer plant.

21. 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.