Sri Lanka Cargills and Northern Farmers come to Verbal Forward Contracts on Their Produce

13th October 2010, www.lankabusinessonline.com

Sri Lanka's Cargills, the island's largest retail chain said it had added farmers from the former war-torn north to its country wide network that keeps its outlets supplied with fruits and vegetables.

"We have added 1,600 farmers from the North," Cargills chief Ranjith Page told the annual annual sessions of Sri Lanka's Institute of Certified Professional Managers.

The firm already has a network of 10,000 which is growing fresh produce for its retail chain.

Page said the farmers came from Kilinochchi, Mulaitivu and Jaffna.

Almost the entire population of Kilinochchi and Mulaitivu were in refugee camps after a 30-year war ended in May 2009.

Jaffna had been under central government control for some time.

The government has since re-settled most of them. The government, donors and charities are helping them rebuild their lives and livelihoods.

Page said the firm had cut post harvest losses, which is a key problem in Sri Lanka's fresh product supply chain.

Page said Cargills had 'verbal' forward contracts with the farmers around the country to buy their produce. Some farmers feared paper contracts.

It was necessary to understand the psychology of rural farmers before dealing with them, he said.