Contract Farming of Jatropha in India

Contract Farming can work well where the Post Harvest Processing Technology is difficult, and Supply is Greater than Demand (as in case of Aloe vera). In case of Jatropha, it is other way round. The Demand is going to remain THOUSAND times the supply for next decade, and post harvest technology to extract oil, through a hand press, is very simple. If the farmer can not sell his seeds at good price, he can crush the seeds himself and use Crude Jatropha Oil as fuel.
Some companies advertise a big foray into jatropha cultivation through the contract farming route across the country. The companies have evolved their own models, which will enable them to scale up planting of this shrub to 50,000 acres in some identified districts.
These companies tie up with Banks which will disburse loans to farmers, and confirm that the company has ensured a buyback arrangement for the produce, it will be extending the loan through its branches to contract farmers for the project. The company appoints two franchisees in each district, who in turn will appoint 10 direct selling agents who will interact with the farmers. Jatropha, being a hardy plant, can be planted on the periphery of a field or property without the main crop being impacted. The company encourages farmers to form groups of 25 each, akin to a self-help group. The idea is that this will be responsible for the repayment of the loan.
The banks fund each farmer to the tune of Rs 6,000 while he would be required to bring in Rs 3,000 as his contribution per acre, to the project. There will be a three-year moratorium on the loan and the farmers will need to start repaying the loan from the fourth year onwards. The company supplies the saplings to the farmers at Rs 2 to 4 a sapling, for which it puts up a nursery on farmland. They assure as low price as Rs 4 to 6 per kg to the farmers when the plant starts yielding seeds for crushing from the third year.
If you carefully analyse the figures, you will find that the loan amount and farmers contribution are highly inflated. If the farmer produces his own sapling, he can produce it at Rs. 0.30 to 0.50 each, inclusive of seeds and manure (Labour is farmers own). The total expences for plantation for him (Rs. 500 for saplings and Rs. 2,000 for manure) is much lower than his contribution of Rs, 3,000 per acre. He can sell the seeds currently at Rs. 6 to 10 per Kg. This shows that all these schemes are to exploit poor farmer. This has led to failure of most of the schemes.
For a small farmer, he can set up a nursery in 1 to 2% of plantation area of his land. 2,500 saplings are required for plantation in 1 hectare (1,000 in 1 acre). If nursery is started in March (for plants to be ready by June), seeds should be sown in soil at a distance 150 mm in square formation. If nursery is started in any other time (for plants to be ready by June), seeds should be sown in soil at a distance 300 mm in square formation. The saplings should be grown in nursery till June and replanted only on onset of monsoon. There is no need of plastic bag for growing sapling. If nursery is set up in summer, it should be done under the shade of big trees. 2,000 kgs of Cow Dung is required for 1 hectare of nursery which is added to soil in the begining. Soil should be moist at all the times with planty of water. 1 to 1.5 kgs of seeds are required for 1,000 saplings.