CONTROLLED COPY Edible Agro Products Limited: Creating Higher Value for Farmers. One Monday afternoon in July 2010, Ashok Agarwal, the director of Edible Agro Products Limited (EAPL) sat in his Kolkata office, his brows furrowed in confusion as he considered the production figures laid out before him. The reasons for his confusion were the production figures for the harvested produce of the new white sesame variety Gujarat Til-2 (GT-2) from Gujarat, a state in Western India (Exhibit 1). Keeping in mind the amount of sesame seeds he had supplied to the farmers, the harvested production was way below of his conservative expectation of yield of at least 200 times per kg of supplied seeds. He had started supplying this new variety in 2008, and this was the third consecutive year the yield had not met his expectations. At the beginning of the season in 2010 he had distributed 7000 Kg of GT- 2 to the state of West Bengal1 farmers. He had expected to receive a harvested produce of a minimum of 1400 metric ton. However, the report presented by the stores department proved that EAPL had received only 300 metric ton of harvested produce. Worse, some of the farmers who had considerable experience of sesame production had reported a lower yield of the new variety than local established varieties. EAPL, a West Bengal based company had been in the agri-business of trading oil including sesame oil. It entered in the trading of sesame seeds in recent past, and dealt with all types of seeds other than white seeds. In 2006, Agarwal attended an international conference on sesame in China. Agarwal learned about significant benefit of white sesame over Brown sesame in that seminar. His entrepreneurial acumen sensed an opportunity and scope for a sustainable social entrepreneurial venture. He asked himself ‘what can I do to develop the farmers in West Bengal and give them higher value’. Agarwal's vision was to promote the advantages of white sesame in West Bengal. He knew that the colored seeded varieties (viz. Brown, red, black, pale yellow) generally cultivated in West Bengal give 30% - 40% lesser yield of poor quality sesame than the white seeded variety (GT-2) cultivated in Gujarat (Exhibit 2). Seizing the opportunity he brought GT-2 (Exhibit 3) variety white sesame seed from Gujarat to West Bengal in 2008 with an intention to bring revolution in sesame production in West Bengal and provide higher value to the farmers of the state. The farmers of West Bengal in general earn far less than the farmers of the North Western and Western states of India. To achieve this mission Agarwal wanted to have full integration of sesame chain starting from production of white sesame to selling seed as well as final branded product of white sesame oil. Before bringing GT-2, Agarwal told his business partners: There is a great opportunity in improved white sesame varieties both for farmers of West Bengal as well as for the company if we can produce it in West Bengal. We can buy seeds of GT-2 variety of white sesame from Gujarat, distribute to the 1
A state in east India. It accounted for 8.2% of national population and only 3% land of the country.
farmers in West Bengal, and then buy back the produce from them. The farmers may be reluctant to shift to new variety from their regular cultivated varieties in the initial stage. But, I am confident that they will realize the value of white sesame in due course and will adopt it within a year or two. Farmers who grew sesame were either small (marginal), medium or large producers. Agarwal reached the farmers through some vendors with whom EAPL had made contracts. As per the contract, each vendor had to be in charge of convincing several farmers about the GT-2 and make them cultivate a certain amount of seeds. They would have to distribute the GT-2 seeds to the farmers, monitor the production and take back the harvested produce from them. EAPL was the first company in West Bengal to introduce this...