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Home » Media » Press Releases » PepsiCo increases yield and income of contract farmers, reduce indebtedness: Nielsen

PepsiCo increases yield and income of contract farmers, reduce indebtedness: Nielsen Study conducted in 30 villages in districts of Jalandhar & Amritsar with 200 farmers as sample

New Delhi, 25 November, 2008: Contract farming with PepsiCo has enhanced farmers' incomes in the state of Punjab and helped reduce indebtedness, a recent survey conducted by Nielsen reports. The survey was conducted in about 30 villages located in the districts of Jalandhar and Amritsar with a 200 farmer sample size. The independent survey included those who partnered with PepsiCo (160 samples) on the basmati paddy contract farming initiative and those who did not partner with PepsiCo (40 samples) on this initiative.

According to the report, the incomes of contract farmers with PepsiCo increased due to higher yield, better quality of seeds and optimum usage of inputs due to better technical support. The report said that after having adopted contract farming with PepsiCo 98% of the farmers felt that the yield of basmati paddy increased and thus were able to bring in more land under basmati cultivation. The report cited better yield, higher return on investments lower irrigation requirements as also the reasons of bringing more land under cultivation, adding that technology supplied by PepsiCo requires less water for irrigation. About 96% of farmers felt that water consumption in basmati crop cultivation reduced due to superior technology while 92% felt that the irrigation requirement has decreased.

The report, which further strengthens PepsiCo India's commitment to Performance with Purpose through its Partnership with Farmers program, said that, trusting PepsiCo technology, contract farmers plant basmati in full landholding unlike non-contract farmers planting a fraction of land.

The Nielsen report observed that majority of the PepsiCo farmers (96.4%) who had taken loan were of the opinion that contract farming with PepsiCo had helped reduce their indebtedness. This is also due to the fact that about 94% of the farmers felt that risk due to crop failure has reduced after adopting contract farming.

In addition to all of these findings, a Happiness Index, which analyzed key indicators which could affect farmers' satisfaction, showed that a large proportion of farmers who sold their crop to PepsiCo are happier than the contract farmers who did not sell their crop to the company.

According to the report, 99.4% of farmers felt that PepsiCo undertakes contract farming on fair and just terms. 96.3% stated that PepsiCo provides good quality seeds and 97.5% said that PepsiCo provided them with all the required information to cultivate basmati paddy.

The other highlights of the survey include the findings that PepsiCo has provided farmers with superior technology to cultivate basmati paddy. This technology has led to an increase in yield which surpasses the yield achieved by farmers who do not partner with PepsiCo India. The results of the survey also show that contract farmers who partner with PepsiCo India enjoy higher incomes due to contract farming.

Almost all the farmers surveyed for this study were chief wage earners for their households and besides agriculture, livestock rearing was another remunerative activity for 71% survey farmers. Farmers selling produce to PepsiCo are primarily from SEC B with annual income in the bracket of Rs 2 to 5 lakhs (68%) and more than 5 lakhs (14%).

The Nielsen survey was conducted to get feedback to assess whether the contract farmers for basmati see PepsiCo in bringi ng value through –

  1. Better agri inputs - improved seeds, newer varieties
  2. Improved technologies – reduced costs, better yields, improved sustainability
  3. Building partnerships – a knowledgeable extension team who can guide farmers in a cordial way through periodic visits
  4. Reliable commercial dealings – procure as per contract terms, timely payments, pleasant interaction during procurement.

Performance with Purpose

Performance with Purpose articulates PepsiCo India's belief that its businesses are intrinsically connected to the communities and world that surrounds it. Performance with Purpose means delivering superior financial performance at the same time as we improve the world.

To deliver on this commitment, PepsiCo India will build on the incredibly strong foundation of achievement and scale up its initiatives while focusing on the following 4 critical areas that have a business link and where we believe that we can have the most impact.

  1. Partnering with Farmers to help them earn more
  2. Replenishing Water and continue to expand its expertise in water conservation
  3. Converting Waste to Wealth, to make our cities cleaner and healthier, and
  4. Improving the Health and Wellbeing of our children

About PepsiCo India

PepsiCo (NYSE: PEP) is one of the world's largest food and beverage company, with 2007 annual revenues of more than $39 billion. The Company employs approximately 185,000 people worldwide, and its products are sold in approximately 200 countries. Its principal businesses include: Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. The PepsiCo portfolio includes 17 brands that generate $1 billion or more each in annual retail sales.

PepsiCo entered India in 1989 and has grown to become the country's largest selling food and beverage company. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. The group has built an expansive beverage, snack food and exports business and to support the operations are the group's 43 bottling plants in India, of which 15 are company owned and 28 are franchisee owned. In addition to this, PepsiCo's Frito Lay snack division has 3 state of the art plants. PepsiCo's business is based on its sustainability vision of making tomorrow better than today. PepsiCo India's commitment to living by this vision every day is visible in its contribution to the country, consumers, farmers and people.

For further details, please contact:

Annie Kishen
Director - Corporate Communication
Tel: 0124 - 2880606
Email: annie.kishen@intl.pepsico.com

Abhishek Gulyani/ Divya Bakhshi
Genesis Burson-Marsteller
Mob: +91 9899045766 /9811613864
Email: abhishek.gulyani@bm.com / divya.bakhshi@bm.com

Mrinall Kanti Dey
GM - Corporate Communication
PepsiCo India
Tel: 9818449509
Email: mrinall.dey@intl.pepsico.com