Land Grab in Africa
12 Nov 2012 10:17 PM GMT
What the Indian diaspora did not do was ‘AgInvesting’, the new buzz word after the Wall Street meltdown since 2008.
Western investors are now finding the food economy potentially more profitable and scrambling for Africa noted for its low population and large landmass. While the West moved in a decade ago, India has since the last five years, according to professor Jayoti Ghosh, professor of Economics at Jawaharlal Nehru University, embarked on a scramble similar to the European Africa rush in the 1890s. Approximately 70 Indian companies and corporates are in this. Why not would say Karuturi Global, India’s biggest floriculture corporate, when they can get a 50 year land lease for Ethiopia for a measly $10 per hectare. Land rush can raise the heat of the ground. Is anyone who is aware of the fate of the Ugandan Indians who had to pack overnight when they came under the hammer of Idi Amin, listening?
Let’s look at some of the more prominent names from India in this land rush: Adani, MMTC, Karaturi, KS Oils, Mcleod Russell, Ruchi Group, Uttam Sucrotech International. Mthuli Ncube, chief economist at the Africa Development Bank (ADB), argues that 70 per cent of the growth story in Africa has come from agricultural resources. Recent press reports of large land acquisitions in Africa however has suddenly highlighted the aftermath; the death of the small farmer, famine, rocketing land prices and growing disaffection with the power elites who are brokering perhaps the biggest land scramble Africa ever witnessed since the last century when it went under colonial rule. Lorenzo Cotula, of the International Institute for Environment and Development, London has argued in his book, Land Deals in Africa, What is in the contract, that looked at 12 land deals across Africa show few benefits at the cost of many. Ethiopia, India’s biggest partner in Africa, is under the scanner and trails lead to the palace. It is here that Karuturi Global set up shop and made the bucks. Informed Indian diplomatic sources told the author that Karuturi has over reached in Africa.
Land grabs are one of the biggest issues in Africa. Last year the World Bank documented media reports of land deals between 2008-2009 for nearly 60 million hectares, roughly the size of Ukraine – and two thirds of the land acquired was in Africa. While new figures keep emerging, some individual deals are for very large areas. Liberia recently signed a concession for 2,20,000 hectares (see land acquisition table for Africa). Media focus is on investments by Middle Eastern and Asian government backed operators but Western companies are heavily involved. A summary of 30 reports worldwide indicate that many investments have failed on account of fertility, over ambitious plans and financing difficulties. For example, in Mozambique and Tanzania some large bio-fuel projects have been fully abandoned. While African governments have argued that land acquisition will secure affordable food for their people growing evidence indicates that not all investment is good and large land deals are not the way to go.
Reports of contracts that governments have been signing show large discrepancies. In Uganda, for example, 20,000 people claim that they have been evicted from their land and a court case is pending. In several regions in Africa, local farmers and herders have secured legal rights to the land that they have grazed for centuries. No documents exist; much land is known by the state which can allocate to foreign investors despite local opposition. There are alternatives to this. In Ghana for example, a cooperative of 60,000 cocoa farmers have run a successful business for more than 20 years and owns 45 per cent of a UK company that a manufactures and distributes chocolates. Same goes for Mali and Zambia. Cotula who leads the Land Rights Team at the UK based research body the International Institute for Environment and Development, has argued that promoting agricultural development in Africa and addressing the worlds food security challenges requires investing in farmers not in farmland.
Does Africa really benefit from foreign investment? Mthuli Ncube, chief economist of the ADB, argues that it does not since Africa has weak manufacturing and agro-processing sectors. Seventy per cent of growth over the past decade has been driven by natural resources and says that exploiting natural resources is capital intensive and does not create direct jobs. Much of the African continent remains poor and in some areas youth unemployment stands at 50-60 per cent. The United Nations is now aware of the groundswell, building up in Africa and the emerging slogan Africa for Africans. Vaulting politicians can exploit this when the need arises. The spectre of Idi Amin has not been lost on the Indians who fled Uganda in the 1972’s. Countries like Ethiopia, South Sudan, Democratic Republic of Congo and Sierra Leone have all signed major deals with foreign investors. The UN’s adopting global guidelines in this issue may be a weak palliative as of now where voluntary rules call on governments to protect the rights of their own indigenes people. Estimates show that 200 million hectares of land, an area the size of Britain, has been bought and leased over the past decade, most of it in Africa and Asia.
Track the rise of Karuturi. The flowers which were used during the inaugural of World Cup 2010 in Johannesburg came from the Ethiopian rose gardens of Sai Ramakrishna Karuturi. Karuturi, a Bangalore businessman who has been acquiring land in African nations has already become the world’s biggest rose grower and one of the biggest landowners. He has opened the floodgates for more Indian, shown the way to gold. The Tatas in Uganda, the Jaipurias of RJ Corp in Uganda and Kenya, Shappoorji and Pallonji & co. in Ethiopia. Roughly 70 Indian companies are in the fray in Ethiopia, Malawi, Kenya, Uganda, Liberia, Ghana, Congo and Rwanda. A beeline for acquiring estates. The BM Khaitan owned Mcleod Russell India, the largest integrated tea company in the world has acquired Uganda’s Rwenzori Tea Investments for $25 million. Elsewhere the Confederation of Potato Seed Farmers are inking a deal with the Ethiopian government for 50,000 hectares for growing pulses and grain; Sukhjit Singh Bhatti, the president said that this was because of farm land availability at throwaways prices, duty free import of capital goods and zero duty on farm exports offered by Ethiopia.
The flip side on Africa’s agriculture is that it still employs more than half the labour force yet remains one fourth productive vis-a-vis its counterparts primarily because two thirds of its land has been degraded by erosion and misuse of pesticides. Eight-five per cent land in Ethiopia is damaged. More and more are looking to Africa with greed. Hillary Clinton after an African visit said, ‘More and more, the world will look to Africa to be its breadbasket, and I hope that when the world looks. Africans and African farmers who will profit from becoming the world’s breadbasket.’
Kalyan Mukherjee is the director of KAS Movie Makers Research by Aman Ramrakha
Western investors are now finding the food economy potentially more profitable and scrambling for Africa noted for its low population and large landmass. While the West moved in a decade ago, India has since the last five years, according to professor Jayoti Ghosh, professor of Economics at Jawaharlal Nehru University, embarked on a scramble similar to the European Africa rush in the 1890s. Approximately 70 Indian companies and corporates are in this. Why not would say Karuturi Global, India’s biggest floriculture corporate, when they can get a 50 year land lease for Ethiopia for a measly $10 per hectare. Land rush can raise the heat of the ground. Is anyone who is aware of the fate of the Ugandan Indians who had to pack overnight when they came under the hammer of Idi Amin, listening?
Let’s look at some of the more prominent names from India in this land rush: Adani, MMTC, Karaturi, KS Oils, Mcleod Russell, Ruchi Group, Uttam Sucrotech International. Mthuli Ncube, chief economist at the Africa Development Bank (ADB), argues that 70 per cent of the growth story in Africa has come from agricultural resources. Recent press reports of large land acquisitions in Africa however has suddenly highlighted the aftermath; the death of the small farmer, famine, rocketing land prices and growing disaffection with the power elites who are brokering perhaps the biggest land scramble Africa ever witnessed since the last century when it went under colonial rule. Lorenzo Cotula, of the International Institute for Environment and Development, London has argued in his book, Land Deals in Africa, What is in the contract, that looked at 12 land deals across Africa show few benefits at the cost of many. Ethiopia, India’s biggest partner in Africa, is under the scanner and trails lead to the palace. It is here that Karuturi Global set up shop and made the bucks. Informed Indian diplomatic sources told the author that Karuturi has over reached in Africa.
Land grabs are one of the biggest issues in Africa. Last year the World Bank documented media reports of land deals between 2008-2009 for nearly 60 million hectares, roughly the size of Ukraine – and two thirds of the land acquired was in Africa. While new figures keep emerging, some individual deals are for very large areas. Liberia recently signed a concession for 2,20,000 hectares (see land acquisition table for Africa). Media focus is on investments by Middle Eastern and Asian government backed operators but Western companies are heavily involved. A summary of 30 reports worldwide indicate that many investments have failed on account of fertility, over ambitious plans and financing difficulties. For example, in Mozambique and Tanzania some large bio-fuel projects have been fully abandoned. While African governments have argued that land acquisition will secure affordable food for their people growing evidence indicates that not all investment is good and large land deals are not the way to go.
Reports of contracts that governments have been signing show large discrepancies. In Uganda, for example, 20,000 people claim that they have been evicted from their land and a court case is pending. In several regions in Africa, local farmers and herders have secured legal rights to the land that they have grazed for centuries. No documents exist; much land is known by the state which can allocate to foreign investors despite local opposition. There are alternatives to this. In Ghana for example, a cooperative of 60,000 cocoa farmers have run a successful business for more than 20 years and owns 45 per cent of a UK company that a manufactures and distributes chocolates. Same goes for Mali and Zambia. Cotula who leads the Land Rights Team at the UK based research body the International Institute for Environment and Development, has argued that promoting agricultural development in Africa and addressing the worlds food security challenges requires investing in farmers not in farmland.
Does Africa really benefit from foreign investment? Mthuli Ncube, chief economist of the ADB, argues that it does not since Africa has weak manufacturing and agro-processing sectors. Seventy per cent of growth over the past decade has been driven by natural resources and says that exploiting natural resources is capital intensive and does not create direct jobs. Much of the African continent remains poor and in some areas youth unemployment stands at 50-60 per cent. The United Nations is now aware of the groundswell, building up in Africa and the emerging slogan Africa for Africans. Vaulting politicians can exploit this when the need arises. The spectre of Idi Amin has not been lost on the Indians who fled Uganda in the 1972’s. Countries like Ethiopia, South Sudan, Democratic Republic of Congo and Sierra Leone have all signed major deals with foreign investors. The UN’s adopting global guidelines in this issue may be a weak palliative as of now where voluntary rules call on governments to protect the rights of their own indigenes people. Estimates show that 200 million hectares of land, an area the size of Britain, has been bought and leased over the past decade, most of it in Africa and Asia.
Track the rise of Karuturi. The flowers which were used during the inaugural of World Cup 2010 in Johannesburg came from the Ethiopian rose gardens of Sai Ramakrishna Karuturi. Karuturi, a Bangalore businessman who has been acquiring land in African nations has already become the world’s biggest rose grower and one of the biggest landowners. He has opened the floodgates for more Indian, shown the way to gold. The Tatas in Uganda, the Jaipurias of RJ Corp in Uganda and Kenya, Shappoorji and Pallonji & co. in Ethiopia. Roughly 70 Indian companies are in the fray in Ethiopia, Malawi, Kenya, Uganda, Liberia, Ghana, Congo and Rwanda. A beeline for acquiring estates. The BM Khaitan owned Mcleod Russell India, the largest integrated tea company in the world has acquired Uganda’s Rwenzori Tea Investments for $25 million. Elsewhere the Confederation of Potato Seed Farmers are inking a deal with the Ethiopian government for 50,000 hectares for growing pulses and grain; Sukhjit Singh Bhatti, the president said that this was because of farm land availability at throwaways prices, duty free import of capital goods and zero duty on farm exports offered by Ethiopia.
The flip side on Africa’s agriculture is that it still employs more than half the labour force yet remains one fourth productive vis-a-vis its counterparts primarily because two thirds of its land has been degraded by erosion and misuse of pesticides. Eight-five per cent land in Ethiopia is damaged. More and more are looking to Africa with greed. Hillary Clinton after an African visit said, ‘More and more, the world will look to Africa to be its breadbasket, and I hope that when the world looks. Africans and African farmers who will profit from becoming the world’s breadbasket.’
Kalyan Mukherjee is the director of KAS Movie Makers Research by Aman Ramrakha
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