Indian entrepreneurs will soon become farmers in Latin America. About 14 producers of vegetable oils, including Gujarat Ambuja, KS Oil, Liberty Oil, Pranab Agro and Betul Oil, have formed a consortium to acquire 10,000 hectares of farmland in Uruguay and Paraguay to cultivate soybean, maize and sunflower.
?There are 4 to 5 major Indian companies keen to participate and become either partners or just buy for holdings,? said Martin Pablo Leon O?Farrell, a representative from Southern Land Co, Ireland Inc, the company which is leasing and selling land to Indian companies. The price of farmland is around $3,000 per hectare.
?The land is fertile and has enough rainfall round the year. The area has high yield of soybean crop at 3,000 kg per hectare,? said BV Mehta, executive director of the Solvent Extractors Association of India (SEA). The Indian companies have lined up a line of credit of Rs 200 crore from the Exim Bank of India. ?We have asked Exim Bank for Rs 200 crore for land purchase and meeting incidental expenses,? said Pravin Lunkud, chairman of the consortium.
When contacted, an official of the Exim Bank confirmed receiving the request and said the bank was currently examining the feasibility of the project.
According to Lunkud, while the farmland will be purchased by individual companies, the consortium will be an umbrella organisation for resolving issues that these companies may face in executing the projects.
According to the plan drawn up by these companies, they would cultivate three cash crops, mainly soybean, maize and sunflower as single crop farming will not be economically viable.
Responding to a query about tax benefits on investments, Farrell said, ?There are tax benefits when you invest in other countries either for land or developments. On top of that, because of the Kyoto Protocol and Bali convention, there are some benefits when you work with preservation and conservation. Then there is the choice of the forest area in the Andes that generates the 35 or 40% of the clear pristine oxygen of the planet. Some governments give back part of your off-shore investments if you are participating or investing in places like these forest areas (cold forest in the Andes, Patagonia region or rain forest in Brazil).? Farrel added there was sizeable business opportunities in the country to participate and invest in areas like energy (bio diesel with jaropha or soybean, sunflower seeds, oil & gas etc.
According to Farrell, the Latin American group has an invitation to visit India later this year to sell the concept. ?Also, a high-level delegation from the Solvent Extractors Association of India (SEA) and other officials will visit our country later this month,? said Farrell.