PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

Chapter 1: INTRODUCTION
For an agro processing unit to run successfully, it must operate throughout the year. To
achieve this, there must be a constant source of raw material (industrial hemp). Working on
the assumption that the climatic and soil fertility rate are equitable in all states, I have
narrowed down on a few straight-forward/obvious parameters as well as some non-obvious
but interesting parameters.

Chapter 2: PARAMETERS

2.1: Awareness/Education
Hemp is lacking the attention it needs by growers. The facilitation of cultivation and
processing of hemp will become many folds easier in locations where its awareness exists.
Since awareness programmes are limited in this field, one approach could be to identify
areas where there are existing programmes and incorporate the hemp approach within
them.
Andhra Pradesh, Karnataka, Himachal Pradesh, Chandigarh, Jharkhand, Kerala and West
Bengal have active training programmes, aimed at improving farming techniques and
incorporating modern practices.
Srijan (http://srijanindia.org/) is one such NGO that conducts widespread programmes for
farmers within the country and is currently active in

Odisha: Anugul
Chhattisgarh: Koriya
Karnataka: Mundgod, Haveri
Rajasthan: Bundi, Duni, Pratapgarh, Pali, Newai
Madhya Pradesh: Jaisinagar, Anuppur, Jatara, Chhindwara

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

2.2: Cultivation Method

It is imperative to make sure that the agro processing unit receives hemp throughout the
year for it to have continuous operations. Hemp is best grown as a rotational crop. There are
a number of factors that must be considered when planning a crop rotation. A good crop
rotation requires the weighing of fixed as well as fluctuating production circumstances like:
market, farm size, labour supply, climate, soil type etc. The hemp stem is the most important
morphological factor that influences the productivity of the plant. The longer the stem, the
better are the processing outputs.
The stem length and overall success of the crop can be directly affected by factors such as
seed rate, genotype, climatic conditions and other such variables.
These factors mentioned above are in tune with the circumstances one must look into for
the cultivation of hemp in general and are hence to be considered as a sub-parameter. That
is: while studying a parameter like farm size, the crop rotation involved in the farm must be
a significant factor too.
Crop rotation in India in not practiced in recent times due to reasons such as market
pressure, improved technologies and existing fertilizers that have cornered farmers. Because
of the imperative nature of maintaining crop rotation for hemp cultivation, areas where crop
rotation is practiced would be suitable to approach for cultivation.
Traditional growing zones are advised to be avoided to the extent possible. Easily available
marketing facilities might result in cross purchases.

2.3 Land-Holding Pattern/Size

Due to the lack of interest in hemp cultivation from farmers with large cultivable land, a good
tactic would be to set up cultivation in smaller land holding sizes. Once the concept of hemp
as a sustainable crop is shown via a working model. It will attract the interest of hemp
cultivation on a commercial scale. However, knowing the requirements of hemp on the basis
of machinery and fertiliser input. It would not be necessary at all to target larger land holding
farmers.
According to a NABRAD report, Andhra Pradesh, Assam, Haryana, Himachal Pradesh,
Karnataka, Manipur, Meghalaya, Nagaland, Rajasthan, Tripura and West Bengal have
witnessed reduction in land holding size. At the same time it has been seen that the same

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

states have seen increase in operational farming land. It would be great to further investigate
other parameters in these areas to find a good match.
More information on land in respective states can be found out by approaching people/
bodies such as

State Electricity Board

Public Works Department
Office-bearers of Local Industry Associations
Banks/State Financial Corporations
District Industries Centre

2.4 Availability of raw materials

The availability of good quality raw materials in required quantity at close hand is very crucial
for the success of a new enterprise. The main raw material and the supplementary raw
materials for the plant to operate must be identified. Subsequently, areas can be narrowed
down for setting up the processing unit. The agro processing unit must be surrounded by
many different feeders of hemp for its successful operation. A cluster of locations must exist
around the processing at a relatively close distance to cut down on transportation expenses.
The nature of the hemp crop is such that it takes a meagre four months to reach harvest
phase. Moreover it can be sown as a kharif as well as a rabi crop. Strategic locations must be
identified to cater to this advantage. Other than the raw material, water, power and other
infrastructure facilities like access to road, railhead, ports and airport as well as the markets
for the products have to be ensured.

2.5 Farming Techniques

Small-scale farming in India rarely provides sufficient means of survival in many rural areas.
It is therefore imperative to explore alternative income generating opportunities to support
poor families who can no longer fend for themselves from the land-based activities alone.
Recent research demonstrates that rural households depend on a diverse portfolio of
activities and income sources. Some households are looking towards activities such as food
processing as a means to enhance the livelihood they can achieve from a limited area of land.
In this context the small-scale food processing activities represent a potential source of
livelihood for rural poor.
The crop is cultivated in a wide range of climate in all parts of the country. It grows almost
in every type of soil but cannot stand water logging. Land is required to be ploughed properly.
The crop is useful in rotation with potato, tobacco (AP, Karnataka, TN) and other crops that
are subjected to nematode infection. The crop is also rotated with sugarcane, rice, wheat

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

and jute (AP, TN, UP, West Bengal). It is also favoured as a cover crop in citrus, tea, cocoanut
and rubber estates. It has proved as a special rotational crop with cotton in U.S.A.

2.5 Supply of Labour

The availability of the required grade of labour i.e. skilled, semi-skilled or unskilled is an
important factor influencing the location of the industry. Besides, the cost and productivity
of labour, attitude of trade unions and the state of industrial relations in a particular region
are also important.
The varying labour costs across the country are certainly a significant factor that decides
Wages constitute a major component of cost of cultivation in the country, because of the
labour intensive nature of agricultural operations.
Interestingly, the two graphs below portray the trends of labour rates in different states for
skilled and unskilled labour. States of Gujarat and Chandigarh do well with the national
average. However Maharashtra that shows low labour rates in this report does not fare well
with most other articles that I had gone through, therefore questioning its credibility.

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

2.6 Proximity to the Product Market

An industry should ideally be located close to the market for the product produced by the
firm. This reduces the cost of transporting the finished product to the market.
Hemp having a widespread market potential must focus more on cultivation and production,
and subsequently attach itself to a market nearby. Not having an existing market makes it
necessary to target locations where road infrastructure and transport facilities are good.

2.7 Availability of transport facilities

A factory requires transport facilities both for getting its raw materials as well as for reaching
its finished products to the market. Hence, location is to be chosen in such a way that its
total transport cost is the lowest. Of the two elements of transport cost, which one will have
a decisive influence on the decision of location will depend on the characteristics of the raw
materials and the nature of the manufacturing process
Transport and Storage Unprocessed hemp biomass, like agricultural residues or other fibre
crops, is very bulky material, and the costs of transportation and storage are a major
consideration in the largescale use of these products, regardless of their end use. The low
density of stem core material from hemp, is an apparent major factor limiting their utilization
in pulping. An inexpensive method of increasing their density is required to reduce

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

transportation costs and ease handling in the mill. Hemp requires protection from the
elements to maintain quality, particularly if grown in high rainfall areas.
Providing storage facilities and holding stocks of raw materials to ensure uninterrupted
supply to a mill will involve considerable investment. The idea of pre-processing of the hemp
before initial transport must be worked on as a possible solution to the problem.

2.8 Supply of Power

With increased mechanisation, a location which ensures a regular and adequate supply of
power and fuel for the business has become an indispensable requirement.
Policies in favour of agro industries can be identified, for instance; the government of Gujrat
provides the following Incentive on Power Tariff and Electricity Duty.
Agro and Food Processing units and Infrastructure Projects will be given power tariff subsidy
at the rate of Re. 1 per unit in the billed amount of the utility as promotional incentive on
reimbursement basis for a period of five years with effect from the commencement of
commercial production/ rendering services
Agro and Food Processing units and Infrastructure Projects will be given 100 %
reimbursement for electricity duty paid for a period of five years on coterminous basis with
power tariff subsidy.
1. Above assistance will be available to agro and food processing units and infrastructure
projects on power purchased from the State electricity distribution companies or power
distribution licensees. Agro and food processing units, either generating power from its
captive power plant or getting electricity through open access will not be eligible for the
incentive.
2. Existing units undertaking expansion/diversification will be entitled for power tariff
subsidy and electricity duty reimbursement only for additional power consumed, attributable
to
such
expansion/diversification.

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

2.9 Government Regulations and Policies

Central Government and the State Governments have made several policy announcements
from time to time in order to encourage development of industries. Various incentive
schemes have been provided to attract investment especially in backward areas. These are
important factors while selecting a suitable location
To increase farming infrastructure growth, the Cabinet cleared key proposals for rural
development and railway lines. From developing clusters of smart villages to additional
employment under MGNREGA, the Cabinet gave its nod for proposals aimed at driving
growth. It is absolutely vital to further plan based on government policies towards growth in
the agro sector.
A few key things that can advance location selection for hemp, would be to pay attention to
recent government plans such as
1) Smart plan for rural areas:
The SPMRM mission aims to create 300 growth clusters over the next 3 years, across the
country. In a bid to transform rural areas to economically, socially and physically
sustainable spaces, the Cabinet approved the Shyama Prasad Mukherji Rurban Mission
(SPMRM) with an outlay of Rs 5142.08 crore. The Mission will develop a cluster of Smart
Villages.
The cluster would focus on:

Skill development training linked to economic activities,

Agro Processing/Agri Services/Storage and Warehousing,

Digital Literacy,

Provision of piped water supply,

Village streets and drains,

Street lights,

Fully equipped mobile health unit,

Inter-village road connectivity etc.

These objectives of the smart plan, will all play a crucial role to the success of the hemp
industry. It can definitely pose to be a good parameter while identifying a location.

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

2) Vision India 2020

An important document to understand the state wise policies towards various business
fronts. A brief study of this document clearly shows us how much money will be directed by
the respective states towards the agro-processing industry. This may be shown directly or
via indirect factors like agro infrastructure, water supply and logistics.
A good example would be the state of Gujarat. The Sardar Sarovar Project, which is expected
to be completed by the middle of the current decade, will provide annual irrigation benefits
to an area of ~18.45 lakh hectares spread over 73 talukas of 15 districts in the state. The
network will help in stabilising agricultural production by providing access to water to large
parts of South Gujarat.
Another example of how the vision 2020 document can be of help understanding state wise
policies for the near future would be; Bihar. Bihars agro-based industry is expected to be a
major growth driver for the economy, engendering large-scale employment in rural areas
and high returns for the farmers. Given the endowment of fertile soil and water resources in
Bihar, there can be a significant potential for agriculture development. More importantly the
state government is focusing significantly on improving the quality of national and state
highways as well as rural roads.
3) Subsidies
Many state governments provide subsidies to agro based industries. These subsidies can be
beneficial to all parties involved in the project. Subsidies are in the form of:
Input Subsidies:
Subsidies can be granted through distribution of inputs at prices that are less than the
standard market price for these inputs. The magnitude of subsidies will therefore be equal
to the difference between the two prices for per unit of input distributed. Naturally several
varieties of subsidies can be named in this category.
(a) Fertiliser Subsidy
(b) Irrigation Subsidy
(c) Power Subsidy
(d) Seed Subsidies
(e) Credit Subsidy

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

Example:
The state of Gujarat provides, assistance for Research 50% of the expenditure incurred &
Development on research activity subject to ceiling of Rs.20 lacs.
The Haryana Govts Policy towards Infrastructure development has lead to,

Great network of canals , distributary and tube wells , separate transmission lines for
tube wells all this makes an efficient irrigation facility all-round the year

Ease of excess to quality hybrid seeds and fertilizers from government seed centres
and valuable consultation from KVK's (each in a district ) which provides soil testing
facility , advice regarding timings of irrigation and sowing and about the best breed
to be sown .

Subsidy on installation of drip irrigation facility (highly efficient in horticulture),

fountain irrigation, underground pipe lines, farming equipment.

Anaj Mandi's in each block, they are the market to the crops.

Identifying government subsidies of various nature from the respective state agriculture and
agro processing departments will provide a good variable for zeroing in on the final location.
4) Schemes
The State agricultural department programs and schemes for the welfare of farmers which
may directly or indirectly benefit hemp cultivation in different states are listed below:
West Bengal

Subsidized sale of quality seeds

Production and distribution of organic manures
Development of quality control of inputs
Pest management including biological control of pests
Development of cotton and other fibre
Distribution of improved high-yielding/hybrid varieties of seeds though mini kits
Agricultural training centre and farmer study tours
Farm Advisory Services

Tamil Nadu

Seed processing units

Establishment of seed centres for procurement and distribution of Seeds

Establishment of a State seed farm

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

Punjab

Soil Testing

Training of Farmers

Madhya Pradesh
There are a multitude of agricultural schemes operating in this State and have been grouped
under five main heads:

Crop Husbandry

Research and Education

Soil Conservation

Minor Irrigation

Micro Minor Irrigation

Haryana

Crop production and plant protection

Agricultural mechanization

Soil conservation

Integrated Watershed Development Project

Ground Water Cell

Gujarat

National Agriculture Insurance Scheme

Farmers Accident Insurance Scheme

Schemes for Remunerative Farm Produce Price

89/-Micro Irrigation Scheme

Farmers Training Centre

Soil and Water Testing Labs

Karnataka
The State agricultural department is running more than a 100 plan and non-plan schemes.
Major State schemes include:

National Agricultural Extension Project (NAEP)

Production and distribution of quality seeds

Popularization of bio-fertilizers

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

Scheme for plant protection measures

Study tour of farmers within the State and country

Special component and tribal sub-plan

Supply of power tillers and tractors as an incentive to farmers

Distribution of machines such as rice planters, weeders and sugar planters

Andhra Pradesh
Work Plan on macro management basis - Andhra Pradesh Training of Women in Agriculture
(APTWA)

AP Economic Restructuring Programme (APERP)

Farm Mechanization

Example: Scheme in Rajasthan for Land acquisition

Department of Revenue (Gr-6), Government of Rajasthan has amended the Revenue Rules
vide notification Order No. F.6(6)Rev-6/92/pt/24 dated 14.10.2010 for following: i. Rajasthan
Land Revenue (Conversion of Agriculture Land for Non-Agriculture Purposes in Rural Areas)
Rules, 2007 has been amended to vest power for conversion of up to 10 hectare of
agriculture land for setting up agro-processing or agri-business enterprises with the SubDivisional Officer and beyond 10 hectare with the District Collector.

2.10 Existence of complementary and competitive industries

Such a location on one hand provides backward and forward linkages for the industries and
on the other hand it provides a competitive environment for them. It increases the supply of
the required raw materials and enhances the demand for the goods produced. It improves
the labour market by attracting both skilled and unskilled manpower. It also improves the
banking, credit and communication facilities in the area. It brings into existence various
commercial services like warehousing, packing, forwarding, grading, appraising, advertising
etc. which helps in the growth and expansion of all the business firms in the particular area

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

2.11 Socio-Economic condition of the region

The social environment of villages is often stated to be an obstacle in agricultural
development. It is said that the Indian farmer is illiterate, superstitious, conservative, and
unresponsive to new agricultural techniques.
However it is also true that the Indian farmer makes use of his resources very well. This fact
gives hemp cultivation a chance on a smaller scale too, where huge amounts of agricultural
infrastructure is not required. The output will be questionable but if many such clusters can
be targeted, a fully operational processing unit will be achievable. This can also prove to be
a working model to show other farmers the benefit of hemp cultivation.

2.12 Ecological benefits of hemp and flax cultivation and products

Hemp is a valuable preceding crop in rotation. Hemp has a deep rooting system, has a
favourable influence on the soil structure. After cultivation, the soil is left in optimum
conditions due to the complete weed suppression following from the high shading capacity
of hemp.
A study by Bcsa and Karus 1998 reports 1020 percent higher wheat yields after the
cultivation of hemp ( Possible impact locations: UP, MP, Punjab, Haryana). Furthermore,
due to its vigorous growth, hemp is known to be a pioneer plant that can be used for land
reclamation. Due to its vigorous growth, shading capacity and disease resistance, hemp can
be grown without the use of herbicides, pesticides or fungicides.

3. Conclusions

Cluster approach, to make sure raw material for the processing plant is in supply
throughout the year
Depending on the financial status of the project, large holding as well as smaller
holdings can be targeted for cultivation. However one is not so much more
advantageous as the other.
Incorporating a pre-processing at cultivation site can reduce a significant amount of
transport costs
There are many states providing great subsidies and schemes for new agro industries,
however the weightage of each scheme will depend again on the scale of operation
States with good, established agricultural universities is always a benefit to all parties
involved
Open mindedness of the community which one is involving itself with is paramount
importance especially in the initial stages

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PARAMETERS INVOLVED FOR CULTIVATION AND PROCESSING OF HEMP IN INDIA

4. References

o Sources for Data relating to food processing industries

o http://dipp.nic.in
http://mospi.nic.in
www.apeda.gov.in
http://rbi.org.in
www.fao.org http://agricoop.nic.in www.nddb.org www.nhb.gov.in
o https://www.nabard.org/Publication/Rural_Pulse_final142014.pdf
o https://gaic.gujarat.gov.in/writereaddata/images/pdf/comprehensive-agrobusiness-policy-gr-2016-2021.pdf
o Jodha, N. S., and Singh R. P. "Crop Rotation in Traditional Farming Systems in Selected
Areas of India." Economic and Political Weekly 25.13 (1990): A28-35. Web.

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