Exactly a year back, I wrote a blog on the peanut prince Simmarpal Singh saying that he is a role model for success in agribusiness in Argentina. http://businesswithlatinamerica.blogspot.com/search?q=peanut+prince
Since then, the role model has become the target of pursuit of hot Argentine models....when they see his flashy red turban...they chase him..follow his car...and stalk him everywhere.
He is also being chased by Indian journalists ...for interview. He has been interviewed and written about in many newspapers and magazines in India. Here is his latest interview in the Financial Express of today written by Huma Siddiqui, .... the Latina of Indian media...
He started with leasing of 700-ha of land in Argentina and grew peanuts. It was a success. His company Olam International let him lease additional acreage. He has plans to continue the increase in acreage and grow other crops such as wheat, soya and pulses. Simmarpal Singh, Gerente General, Olam Argentina, today employs 140 people in Argentina, most of them in the processing plants. What Pal is doing in Argentina has a lesson for India which is going to face, in the long term, a shortage of agricultural land and water for irrigation to feed its population which is increasing by 15 million per year. Following are excerpts from an interview of Simmarpal Singh by Huma Siddiqui.
Realistically speaking, is contractual farming a concept for India?
Contractual farming applied in India may not work the same way as it does in Argentina because it is not about just getting an access to assured supply by giving some new seeds and a price cover to small farmers. All the while, you have to stay away from the operational part of the farm management. I think this is the way some companies are engaged in India. The higher plane of contractual farming is also about employing newer technology in planting, spraying and harvesting for which one needs large tracts of land to make the initial investment viable. We all know the kind of fragmentation that exists in India.
However, contractual farming in countries where large tracts of land are available can surely be an opening for Indian-based companies if they look at it from a long-term perspective and are ready to make some initial investments.
Agriculture ministry is planning to set up a task force which has members from MEA, Ficci and APEDA to help Indian farmers wanting to go to Latin America for contractual farming. What are your views on this?
A very good initiative looking at the entities engaged in the task force. Ficci along with MEA has organised quite a few conferences in LatAm in the recent past and they are in a position to access the right information in the region. However, everything will depend on how fast the task force is able to come up with a viable format for engagement and support.
The modalities of participation will be quiet different in each of these countries within the LatAm cluster and the country-specific social and cultural issues should equally be a focus area for the task force. It is also important to evaluate the segment this task force will be looking at within the ‘Indian Farmers’ category because that will go a long way in creating the initial acceptance locally which will be instrumental in the success of the venture—finally enhancing or destroying the brand India.
What has been the success mantra for your Argentinean venture?
Success, I believe, is all about the environment one happens to be in. Also, the level of effort one is willing to put in to achieve the objectives is also a crucial factor. I consider myself fortunate to be in Olam. It encourages risk taking under a properly-measured and evaluated framework. That gave me a ground to try something new.
Then, it was all about taking the plunge into it—ownership of the project, adaptability and readiness to take on new things.
When and how did you start in that country? How long did it take for you to establish yourself?
I came to Argentina in May 2005 to start the peanut operations in the country. I started from zero in a new place in my own way all the while aligning with and ensuring compliance with the core processes of Olam.
Starting up the operation had all its challenges related to understanding the business environment, the statutory, the labour and the tax-related laws, getting the governmental and institutional approvals and licenses.
Which are the commodities that can be grown in Argentina?
Argentina has fertile soil and good rainfall distribution which can allow one to grow all types of crops—soybeans, corn, wheat, beans, rice etc. One can go into citrus plantations or into vineyards too. It is all there.
What are the typical problems an Indian farmer can run into?
For me it is difficult to give a ready answer on this without getting a feel of what kind of a typical farmer it will be. The profile of a farmer in Punjab (95% farms with Irrigation) and some other state could be quite different. Again, within Punjab the profile of a farmers can differ. However, without generalising on the Indian farmer, I do think that there will be lot of starting problems but any educated person with a bit of meticulous planning can rough it out. The bigger challenge, however, will be the language and the ability to quickly adapt to the local culture.
What kind of food processing/exporting facilities are provided?
You can find everything there. However, most of the businesses are vertically integrated and depending upon which crop one may go into, there could be some specific infrastructure needed for stocking after a certain volume level. Generally speaking, it would not be so much of a challenge.
What are the laws of the land for the farmers/contractual farming?
Like any other place, the procedure is tedious on this aspect. But there is always a path available. I would say that one who has gone through the process with the Patwaris and Tehsildars in India is well trained for the situation here. Rather, he may find it slightly easier.