Punjab Agro Foodgrains Corporation and Mahindra Shubhlabh Services have signed an agreement under which Mahindra and Mahindra will provide guidance to farmers of the state and help them in crop diversification under a contract farming programme.

Punjab Chief Minister Captain Amarinder Singh announced this at a news conference in New Delhi on Thursday.

"Over 600 farmers have committed suicide in the last five years or so because of various difficulties. Since the wheat and paddy production have touched unprecedented highs in recent years, we want our farmers to switch over to cultivation of other crops like maize, et cetera. From June this year, 100,000 hectares of land would be cultivated under contract farming programme called 'grow to order.' The farmers would be assured that their produce would be bought by the private sector. We are trying to provide an alternative to Food Corporation of India. In case the farmers want to sell their produce in the open market they would have the option of doing so, too," he said.

According to the agreement Mahindra and Mahindra would provide 1,000 experts to guide the farmers and help them in cultivating alternative crops. The project will cost Rs 150 crore (Rs 1.50 billion).

"Over 50,000 farmers have shown keenness to join this experiment. We must make it clear that we are not asking farmers to join by force. It is up to individual farmers whether they want to join the scheme or not. To begin with, we would ask them to experiment in two or three acres of their total land and see for themselves if the scheme is working to their advantage or not," Anand Mahindra, vice-chairman and managing director of Mahindra and Mahindra, said.

When asked how much money would the farmers get if they switch over to the contract farming scheme, nobody was willing to give a clear answer.

"They would get the same kind of money which they get from selling wheat or paddy," was the stock reply.

Under the new scheme, the farmers would be given loan by ICICI Bank at the rate to be fixed by the Reserve Bank of India from time to time.

If the experiment succeeds, 2.5 million hectares of land would be brought under this scheme by year 2005.