Chennai: In an attempt to tie up assured supply of raw material for its chocolates, Cadbury India Limited has decided to sell cocoa seedlings to coconut farmers in Tamil Nadu at Rs4 per seedling.

The farmers will grow the cocoa plant as intercrop in their coconut groves and sell cocoa beans back to Cadbury India at the prevailing market rates subject to a minimum of Rs60 per kg for a period of five years. The beans should meet the company''s quality specifications.

An MoU was signed between Cadbury India and the Tamil Nadu government to this effect. In Tamil Nadu around 9 lakh acres are under coconut plantation. With an average yield stagnating at 4,590 nuts per acre average income of the farmers in the state is as low as Rs15,000 per annum.

The government has therefore launched a new initiative to promote cocoa as an intercrop. Cocoa is expected to yield 1,000 kg of beans per hectare. If sold at Rs60 per kg it may get the farmers an additional income of Rs60,000 per hectare and net profit of Rs40,000. This shall be in addition to the income from coconut farming.

During the next five years the state aims to bring 50,000 acres under cocoa cultivation in Tamil Nadu. This is expected to generate an additional income of Rs80 crore every year to the coconut farmers.

The farmers shall be eligible for a financial assistance of Rs11,250 per hectare the following financial assistance for establishing the cocoa garden and 50 per cent of the unit cost for micro irrigation.

Cadbury India would provide technical assistance and farming literature to the cocoa farmers.