The Punjab government has chalked out plans to promote contract farming of basmati and other long grain varieties of paddy, over 26,000 acres of land in 12 districts of the state.

According to an official release here, the state government has directed the Marketing Federation Limited, (Markfed) to promote crop diversification across Punjab.

The project will be implemented in Amritsar, Tarn Taran, Gurdaspur, Kapurthala, Hoshiarpur, Nawanshahar, Ropar, Ludhina, Patiala, Fatehgarh Sahib, Faridkot and Ferozpur.

Markfed managing director G S Grewal said the varieties, which have export potential, including Basmati 306,Pusa 1121, PB1, Super Basmati and Sharbati will be sown under the contract farming.

He said the Marketfed would provide quality seeds, seed treatment chemicals, fertilizers (macro and micro nutrients) and other pesticides for weed control and plant protection on a cost-to-cost basis to the farmers.

Apart from the logistic support Markfed will also provide technical support through qualified and experienced field staff they shall visit the fields of register farmers on regular basis.

To provide loans to the farmers under contract farming, Markfed has tied up with State Bank of India [Get Quote] and decided to give loans at seven per cent interest.

Grewal pointed out that company shall be organizing the procurement of the contract farmed varieties at the predetermined quality and trade parameters at the prescribed rates of each basmati variety.

The cooperative is likely to procure upto 40,000 tonnes of the contract farmed produce during Kharif 2007-08.

Meanwhile, Markfed will also be upgrading and dedicating its Modern Rice Mill at Nawanshahar exclusively for the milling of basmati and long grain varieties, for exports and domestic sale, by setting up a state of the art at a cost of Rs 5 crore (Rs 50 million).