ITC empowers farmers by strengthening system of direct procurement of pulp wood


Hyderabad: ITC’s Paperboards and Specialty Papers Division is taking several measures to facilitate realization of fair prices to farmers growing pulp wood plantation. ITC has spearheaded measures to streamline and strengthen critical aspects of procurement including payment.

ITC officials have been continuously engaging with farmers to enable them to supply their ready produce directly to the Company’s mill at Sarapaka, Bhadradri-Kothagudem district,Telangana In such cases of direct supply, the Purchase Orders are being issued to the farmers and payment as per mill landed price (including cost of transportation and harvesting) is being made directly to their respective bank accounts, within 10 days of receipt of material with acceptable quality

Since April 2018, ITC spearheaded a special initiative to procure wood directly from farmers in Khammam through the direct Purchase Order (PO) system. In February 2019, nearly 75% of the 15,175 MT of wood procured from Khammam, was through direct PO from farmers.

Commenting on this, Mr Vadiraj Kulkarni, COO, ITC’S Paperboards and Specialty Papers Division said – “ ITC has implemented a large scale afforestation programme which has created a green cover over 7,20,000 acres and large scale livelihoods. We cherish our long standing relationship with farmers and are committed to ensuring their livelihood security”.

ITC has also communicated to the farmers that those who are not able to arrange for harvesting / transportation, can use the ITC nominated suppliers to sell their produce. The company has clarified that the role of suppliers is to help farmers organize harvesters and transportation and pay to the farmers the rate/ton, as agreed with ITC and tonnage based on the Focal Point Weighbridges nominated by ITC. While selling to the suppliers, farmers have been advised to sell on tonnage basis and not area (acre, hectare) basis. ITC has put in place systems to monitor/verify that fair prices have been remitted to the farmers’ accounts.

In addition, farmers are being requested to conduct all transactions only through banking channels, so that payments to farmers can be monitored/verified by ITC on a periodic basis.

This procurement of wood, through aggregators and through farmers, is being undertaken in accordance with the existing database on plantations, and after sequencing the harvesting of plantations in different villages. The focus is on supply of wood to the mill all through the year as the mill has to be operational for 365 days. ITC’s Paperboards and Specialty Papers Division maintains an extensive data base including geo-coordinates, of all subabul and eucalyptus plantations (of 1 to 4 years age) based on the assessment done every year, Sequencing of plantations for harvesting (either through aggregator or through direct PO) is done after physical verification of plantations that these are mature plantations. When sequence of a particular farmer/plantation comes for harvesting (as per widely publicized harvesting list for different months), farmers have the option to either supply through direct PO or through an aggregator PO, depending on the farmer’s capacity to arrange for labour and transport for harvesting and transport of wood to the mill.

ITC has implemented a plan to ensure that all mature plantations would be harvested by the end of season (June 2019), before fresh start of harvesting from July, 2019, towards plantations which were planted in June-July of 2015 season. There is no scope for any financial burden on the farmers as her/ his mature old plantation would certainly get harvested by the end of the season, and stipulated price would be paid in his bank account.

The Company has also clarified that mature wood is mutually beneficial for both farmers and ITC. Farmers benefit by generating higher quantity of such wood and this mature wood also meets the quality specifications of the Company. However, farmers are free to sell their produce to anyone and are not tied down to ITC in any manner.

ITC has stated that it will continuously engage with farmers and work out a planned schedule of harvesting so that farmers are aware when the produce will be harvested and sold. The Company has assured farmers of their support and urged them not to be misled by unscrupulous vendors and have conveyed that farmers can reach out to ITC managers to discuss their issues. ITC has also set up a farmers’ helpline, for any farmer to directly reach out to the Company for any support/suggestion/grievance.