Assam is embracing organic farming in a big way with the help of central government.

In a historic move, two companies to promote organic cultivation in Assam's hilly Karbi Anglong district have been launched recently. The main aim of the companies is to help tribal people belonging to Karbi Tribe realise better returns from their land.

This initiative is designed to promote organic cultivation of turmeric (haldi), ginger (adrak) and chilli in the district on a large-scale and also to promote processing and export.

Union minister of state for commerce Jairam Ramesh told mediapersons that the two companies have been set up as producers' companies under Section 581 of the Companies Act 1956 - Coinonya Farms Producer Company Ltd for turmeric and Karbi Farms Producer Company Ltd for ginger and chilli.

Ramesh said this new initiative blends the economic advantage of a corporate entity with the social benefits of a co-operative, duly making use of the new provision to the Companies Act 1956 introduced in 1983.

The minister said the companies would be board-managed and do not come under the Registrar of Co-operative or state government control. Local tribal farmers, mostly small and marginal ones, traditionally practising jhum cultivation, own 51 per cent in each company, while the Kochi-based Spices Board owns the balance 49 per cent with an equity stake of Rs 1 crore in each company.

Ramesh gave the first instalment of Rs 13 lakh each to the companies' chairmen at a function at Karbi Anglong in the presence of Assam Chief Minister Tarun Gogoi.

Land owned by tribal farmers has been made available to these two companies as tribals' contribution to the equity. Six hundred farmers own 51 per cent of Coinonya Farms Producers Company Ltd and 400 farmers own 51 per cent of Karbi Farms Producer Company Ltd.

Ramesh said each company would have a plantation area of 500 hectares, which could be cultivated over a span of five years, with 175 hectares being taken up in the first year itself.

Stating that the North Eastern Region enjoys natural competitive advantage in organic produce, the minister said these include ginger where the northeast accounts for over 50 per cent of the country's output, turmeric, chilli, black pepper and large cardamom.

He underscored the importance of value-addition and the need for organisations such as the producer companies established in Karbi Anglong to be replicated in other parts of plantation growing states so that the benefits of export growth flow directly to deserving growers and tribals.

He said currently the contribution of the NER to the country's spices exports of about $800 million in 2006-07 was very small but there was scope for augmenting this through initiatives like this. He said on its part, the Centre would do everything in this context and said the commerce ministry would be establishing cold storage facilities at Guwahati, Aizawl, Imphal, Agartala and Dimapur airports and announced subsidies for air-lifting these organic produce for the overseas market.

He urged the Assam chief minister to improve road connectivity to and within Karbi Anglong district and the supply of power for processing units. He promised to take up the issue of improved telecom connectivity with BSNL soon.