Purnia: From his sleepy village in Bihar, Ram Narain arrives at Gulab Bagh market to sell a truckload of corn that will fetch him enough money to buy a motorbike for his son, school uniforms for his daughter and a gift for his wife.
Narain and legions of farmers in the dirt-poor state have more than doubled corn output in just five years by adopting hybrid seeds and good farm practices, a rare success story that Prime Minister Narendra Modi wants to replicate in other states. He came to power six months ago by promising faster farm and economic growth.
Traders such as Cargill Inc, Glencore International AG and Louis Dreyfus Commodities BV have set up operations in Purnia, an administrative outpost that now buzzes with trading activity.
"Corn has come as a boon ... helping our children attend good schools and improving our living standards," Narain, 42, said, lending a hand to labourers unloading sacks at the mandi, or wholesale market.
Bihar had an initial advantage as corn is grown year-round to meet local food demand, making it a natural place for traders to seek supplies when demand began to rise. Other states were largely growing corn for animal feed.
The arrival of global traders and the establishment of a market for the crop gave small farmers the confidence to invest in higher-yielding hybrids.
Rising output encouraged banks, a commodity exchange and commodity collateral management companies to move in.
Local farmers say they now produce 7-8 tonnes a hectare. India's average corn yield is just 2 tonnes.
Urbanisation and industrialisation are limiting available agricultural land. Increasing yields addresses the issue and cuts the relative cost of inputs like fertilisers.
India produces 23-24 million tonnes of corn, with Bihar accounting for nearly 3 million tonnes.
With the advent of top-name traders competing for stocks, farmers are now making Rs 12 ($0.19) per kg against Rs 2-3 a few years ago, said Narain, who now grows corn on 2 hectares, up from less than a hectare 5 years ago.
Traders look to buy from local farmers living in the Gulab Bagh area because they can export to neighbouring Nepal and Bangladesh by road. The region is also close to six major ports on the east coast, including Kolkata.
The government says it hopes to extend Bihar's success in boosting yields and to other leading corn growing states such as Karnataka, Andhra Pradesh and Maharashtra.
"We are consulting concerned ministries like agriculture and government research bodies to see how this model can be replicated in other corn growing parts of the country," Food Minister Ram Vilas Paswan told Reuters.
Copyright: Thomson Reuters 2014
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