India outsources agriculture

Tuesday 30 June 2009

Invests US $4 billion to lease land in Ethiopia

INDIA is leasing land in Ethiopia to grow food to meet its domestic demand and boost exports. The government invested US $4 billion (Rs 19,000 crore) on agriculture, horticulture and sugar estates in the African country where land is cheap.

This is a fallout of the economic crisis and jump in food prices, said US-based research agency, the International Food Policy Research Institute (ifpri), in its policy brief. Indian analysts have criticized the move. "Leasing land in Africa doesn't make economic sense especially because its political situation is unstable," said Himanshu, assistant professor with Jawaharlal Nehru University, New Delhi.

Rich countries rush for cheap land in Africa
Target country Investor country Nature of deal Status
Sudan UAE 30,000 ha for alfalfa, wheat, potatoes, beans Being implemented
Zambia China 2 million ha for jatropha (biofuel) Requested Zambia for land
Turkey Bahrain US $500 million investment in agriculture Deal signed
Sudan Jarch Capital (pvt US company) 400,000 ha in southern Sudan Signed
source IFPRI

India is the latest to join the bandwagon of countries leasing land at cheap rates in African countries. The United Arab Emirates and China started leasing land in Africa much earlier.There are concerns that growing food for the investor country would displace communities or create food shortage in the domestic market. ifpri said it has prepared a code of conduct to ensure that communities are involved in negotiations and get the first right over the produce in case of food crisis. "Foreign investment in agriculture will improve local infrastructure," said Joachim von Braun, director general at ifpri.

Codes of conduct don't work, said Devinder Sharma of Forum for Biotechnology and Food Security, Delhi. "It is unethical to grab land in other countries; it will lead to food crisis as investor countries will grow food for profit." he said. "India probably plans to grow crops for international market...not to bring food for us," said Himanshu.

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