In a move to promote cocoa farming, Cadbury India Ltd and the Tamil Nadu Horticulture Department have entered into an agreement.

The agreement is to promote cocoa farming as an intercrop through a contract farming and buyback arrangement with coconut farmers.

According to a press release, the five-year agreement aims to bring 50,000 acres under cocoa farming, which would provide coconut farmers an additional income of Rs 80 crore (Rs 800 million) a year. The agreement was signed in Tiruchi, the release said.

Under the arrangement, cocoa would be promoted as an intercrop in the coconut farms. Cadbury and the Horticulture Commissionerate would identify cocoa farming areas, assist the farmers financially and provide technical inputs and facilitate institutional credit.

The farmers would be eligible for a financial assistance of Rs 11,250 a hectare for establishing a new cocoa garden and 50 per cent of the unit cost for micro irrigation facilities.

Cadbury India would provide the seedlings at Rs 4 each and buy the cocoa beans at a minimum floor price of Rs 60 a kg. The company will enter into separate agreements with farmers.

The objective is to augment the income of coconut farmers. There are over 9 lakh acres of coconut farmers with an average yield of 4,590 nut an acre. Farmers make about Rs 15,000 an acre.

With cocoa intercrop the farmers would get about a tonne of bean a hectare, which would mean an additional income of Rs 60,000 a hectare with a net profit of Rs 40,000.