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Viridas’ preferred to take the “owner managed grove” route as opposed to the "seed purchase" route. This requires more capital, goes slower and requires more research and development than the “seed purchase” route, but gives a more soundly based business.
Managing their own Jatropha groves gives Viridas control to develop good husbandry, and to develop the mechanisation and pruning and picking techniques which will be fundamental to the economics of Jatropha growing and to the production of a reliable, high quality product. Best practice also leads to more responsible sustainable farming and better pay and conditions for the workers.
The alternative approach taken by traders is to use outgrower schemes based on a “seed purchase” model. Farmers being encouraged to produce jatropha seeds on marginal land against an “offtake” agreement for the seeds. This has many advantages for the trader. They do not need to invest in land, they do not need to tie up capital in plant and machinery, they do not need to employ labour or manage the farms. It also allows them to demonstrate rapid roll out of their programmes, whilst at the same time implying that some how the hectares owned by the contracted farmers belong to them, claiming they have thousands of Hectares under cultivation.
However, the “seed purchase” model has certain draw backs. Contract farmers with limited capital are not able to use best practice in their agronomy, and the trader has no control over the growing or harvesting techniques applied. It does not lead to optimum production of a reliable, sustainable high quality product.
Viridas believe the better route is through its own managed Jatropha groves. |
