Millennium Post

‘Indian govt backs firms’ strategies’

Is there a land grab in Africa?

Yes, when 70.2 million hectares around the world have been leased or purchased by foreign investors since 2000, with the bulk of these acquisitions occurring just since 2008, and this is contrasted with the fact that the average annual increase in global agricultural land use before 2008 was only about four million hectares, one can reasonably conclude there is a ‘land grab’ going on.

How different is it from the scramble for Africa in the 1890s?

They are similar, yet some differences are that today the leadership of African and other developing countries are eager to invite in Indian and other foreign investors and are offering very generous contract arrangements to entice investors. Another difference is that political and commercial considerations drove the late 19th century scramble, and while this is still true today, there is an added dimension of water and land-poor wealthy countries seeking to outsource their national food production to lands in Africa and elsewhere as part of their national food security strategies.

What are Indian investors looking for and why?

Indian investors are primarily looking for new commercial opportunities, but the Indian government sees the investments as part of its national food security strategy to begin outsourcing India’s national food production needs.

What kinds of leases are offered?

A 2011 report by the New Delhi-based Economics Research Foundation and the international advocacy organisation GRAIN detailed five disclosed contracts between Indian firms and the Ethiopian government, including those for Karuturi Ago Products, BHO Bio Products, Ruchi Agri, Sannati Agro Farm Enterprise and Verdanta Harvests. Critics say the lack of detail in the contracts raises questions about the limited obligations of investors towards local people and the environment. The contracts, all for operations in Ethiopia’s Gambela Regional State and ranging for terms between 25 and 50 years, specified that the companies were to ensure that environmental impact assessments were undertaken and that the investors would otherwise abide by current Ethiopian conservation laws, but they did not specify who would undertake the environmental impact assessments, the quality or scope of such assessments, the transparency of the process, or, if they were to identify environmental problems or threats, what remedial actions would be taken by the companies or how such would be enforced.

All five contracts stated that the Indian companies have the ‘right’ to provide local residents with power, health clinics, schools, etc., however these were not listed under ‘obligations’ of the investors.

None of the contracts mentioned compensation for any peoples displaced. Nor did the contracts specify labour laws, wages or working conditions for their local employees. The contracts did not address the high-profile claims by the companies and government regarding the increase in agricultural productivity and transfer of new technologies to local farmers. The absence of detail on these points is alarming given the potentially negative impacts they can have on local populations and the local environment.

Which are the African countries that are in the eye of this land grab?

Ethiopia, Tanzania, Uganda and Mozambique are among the highest profile cases, although many African countries are attracting Indian agricultural investors.

What is the Indian government’s view?

The Indian government has supported this push by Indian agricultural companies to go abroad with trade delegations and has struck trade and investment deals with countries in Africa, Latin America and Southeast Asia to facilitate the entry of Indian firms. It has lowered import tariffs on their food exports form selected African countries which are heading into the Indian market. The government has also stepped up the use of India’s Export-Import Bank lines of credit to developing countries, particularly in Africa, for development projects, many of which include concessions for Indian investors to improve productivity of their agriculture sectors. In this way, India’s foreign aid credits are being used to provide inroads for Indian agriculture firms venturing into Africa. According to recent reports, the Indian Ministry of Commerce and Industry has been developing a new Overseas Investment Policy that can better facilitate outward FDI by Indian firms, possibly with new facilities and incentives for Indian investors, and is receiving input from the Ministry of Agriculture on specific ways to facilitate outward FDI for the purposes of outsourcing its agricultural needs as part of India's food security strategy.

Would you regard this as some kind of colonialism?

It is being driven by primarily commercial, environmental and food security concerns on the part of the investing countries. However, in cases where local residents who are impacted do not have adequate say and/or harmed in the process, it reminds us of colonialism.

Do you have any idea of the effects of this so called land grab?

Although it remains to be seen how such investments might help build the efficiency of the African agricultural sector going forward, there are emerging serious concerns about the harmful impacts on local residents due to bad governance and the environmental impact of extended the large-scale corporate model of monoculture agriculture that is heavily dependent on heavy water usage and pesticides and herbicides. Meanwhile, an international scientific consensus on the environmental benefits and output efficiency of smaller-scale, agro-ecological and organic farming methods is emerging.
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