World’s ‘biggest farmer’ says future is in outsourcing

Gustavo Grobocopatel gets embarrassed when he is told that he is arguably the world’s biggest farmer —he cultivates over 300,000 hectares of land in four countries in Latin America.

The Argentine chuckles in amusement, saying, “But I don’t own an inch of farm”. So how does that make him the biggest and his company Los Grobo report a turnover of $700 million last year?

This economist-turned-farmer owes his success to the Indian IT companies’ back office model. Although Grobocopatel set up Los Grobo in 1984, the company remained a small player for the first 15 years until he outsourced all farming operations, including planting, fertiliser spraying, harvesting, storage and even transportation. His company enters into lease agreements with land owners, thereby allowing him to use capital to farm scientifically by satellite mapping.  Grobocopatel now wants to export pulses and is now scouting for companies interested in strategic partnership with his company.

The future of farming is in outsourcing, he says.

“You do not have to own land to farm,” Grobocopatel told DNA in Mumbai, in a conference organised by United Phosphorous, the country’s largest pesticide maker. “What they (farmers) could possibly do—as my experience in Latin America tells me—is that villages can pool together the land and run it like cooperatives.”

This, according to Grobocopatel, “is agribusiness in the new era of knowledge society” and would further help the farmers do well in times when input costs are swelling, thereby forcing many to quit farming as returns don’t match to the costs.

“You work according to your strengths: you good at driving trucks, be in transportation; you good in getting people on to the fields, be in the harvesting,” he says.

Back in Argentina, Grobocopatel said that his company is also undertaking high-end research and development work.  Calling cellulose as the next ethanol, Los Grobo is presently testing enzymes that can convert cellulose into ethanol that can be blended with oil and fuel the cars.

“We should be able to commercially develop such technology in five years,” said Grobocopatel. His company is also supplying one of United Phosphorous’ companies Advanta with a drought-resistant rice variety.
Grobocopatel is not surprised when he is told that over 80% of the people in India own less than two hectares of land, according to the landholding survey of NSS, carried out in 2003.

“Worldover we (are) seeing this trend where farm land is coming under a lot of pressure from industries,” said Grobocopatel whose company Los Grobo farms across four countries — Argentina, Brazil, Paraguay and Uruguay. His agronomist wife is also a director in the company.

Only by improving field productivity can we expect to eradicate malnourishment and keep a check on food prices, said the entrepreneur.

 “(Our) Profit margins are nearly 7-8% of the turnover,” said the agronomist, adding that he “plans to get it (Los Grobo) listed in the next 2-3 years and make it a $1.5 billion company by 2015.

The Argentine also makes an appeal to Delhi: Promote biotechnology for the good of farmers. 

“Biotechnology can help farmers provided the state encourages companies. It is because R&D in this sector is very risky and only with the help of an institutional support, you can see the benefits of biotechnology reach to the farmers.”

“Just like India has become a global IT leader, I believe the country can and should become a leader in biotechnology space.”