Tata Chemicals recently launched a range of pulses branded i-Shakti Dal. Observers feel that this is just the beginning of the foray into edibles by the company which started out as a fertiliser producer and diversified into salt. That’s not off the mark. Tata Chemicals Chief Operating Officer (consumer products division) Ashvini Hiran says: “We will invest more in i-Shakti which will serve as our umbrella food brand.”
The Tata group indeed has strong links with the farmer community which can be leveraged for this. Tata Chemicals has 690 rural outlets called Kisan Sansars in the north and east. Rallis, its subsidiary, with a range of agro-chemical products, has a customer relationship programme called Kisan Kutumb in the south and west. Together, they touch base with over 5 million farmers across the country. In fact, the group has launched a private-public partnership with the Tamil Nadu (for urad dal) and Punjab (for moong) governments called ‘Grow More Pulses’.
Having homed in on pulses as the staple facing a chronic shortage not yet addressed by the government (unlike the crisis in edible oils), Tata Chemicals has been running a pilot in Tamil Nadu for the last one-and-a-half years. Pulse prices have risen sharply in the last few years because of the poor supply, not compensated even through imports. “Pulses are produced by few farmers, and those who do have low productivity. This despite high consumption in our country,” says Hiran. In the company’s estimate, the annual demand for pulses could shoot up from 18 million tones now to 34 million tonnes in the next 20 years. As the current domestic production is only 14 million tones, a huge effort to improve productivity is required.
The lack of farming best practices has led to low productivity, keeping the farmer disinterested in the crop, according to Hiran. Experts point out that yields in India are as low as just 50 to 55 per cent of that in neighbouring countries such as Bangladesh (over 800 kg per hectare) and Sri Lanka (over 950 kg per hectare). Pulse production has grown at a rate (0.7 per cent) way lower than population growth in the last 30 years.
Tata Chemicals plans to remove such supply issues by coaxing more farmers to take up pulses for farming. Helped by Rallis, it is ready to get farmers to stop treating pulses as marginal crops. It will inform farmers of better seeds, irrigation and give them an assurance of buy-back. The pilot in Tamil Nadu has a network of 4,000-5,000 farmers who have been roped in to cultivate 5,000-7,000 acres of urad dal. Punjab (moong), Uttar Pradesh, Maharashtra and Karnataka (toor) are other states which will start supplying other variants next year. The rest will be bought from farmer cooperatives and millers. Once processed, the pulses — moong, urad, toor and chana — will be priced between Rs 85 and Rs 100 per kilo, with smaller packets also.
Retail, both urban and rural, will be taken care of by the Tata Salt-iShakti distribution chain spanning 1.5 million outlets. Tata Chemicals’ largest consumer product, salt, has managed to maintain its market lead despite competition from Hindustan Unilever, ITC and Marico. Packaged staples till now have seen different kinds of flour and rice but pulses have been given a miss by food giants. Organised retail services are a part of urban consumers. With its private label of pulses, Tata Chemical’s bid to integrate the supply chain would help its foray since cutting out the middlemen would arm it with an advantage over retailers. It plans to rein in 600,000 hectares involving 230,000 farmers and sell 500,000 tonnes of branded pulses in the next five years. It will start with Tamil Nadu and Maharashtra and roll out i-Shakti in the rest of India by June 2011.