Land acquisition overseas for farming could soon become a reality. The agriculture ministry plans to announce a policy that will allow farmers to buy land in continents like South America and Africa to farm for all sorts of crops.
Speaking on condition of anonymity, a source told FE that the policy was in the works. Current government regulations allow companies to buy land for building factories and even individuals to buy houses. But there is no clarity on buying land for agricultural investments.
?With a projected population of 1.6 billion by 2050, it is imperative to seriously explore the opportunities of transnational farming and facilitate the same so as to better the national food security concerns of both the sides in the future,? the source said.
While options such as boosting yields through technology interventions and provision of better irrigation facilities do exist, a key solution theme that has garnered immense attention in the recent past has been investing in farmland in under-developed and developing countries ? across regions such as Africa, Latin America and South-East Asia. China, South Korea and a several Arab countries have led the way in creating new African mega-farms to outsource domestic food production. South Korea has bought under 700,000 hectares in Sudan, while Saudi Arabia has signed a deal for 500,000 hectares in Tanzania, according to the Federation of Indian Chambers of Commerce and Industry (Ficci).
The government reckons that this will bring large tracts of uncultivated lands in the two continents under farming. ?The land in Latin America is fertile and the rainfall pattern easily allows one a choice of crop. The soybean boom makes it much more competitive as far as working capital requirement and risk mitigation is concerned,? a government official said.
Indian agribusiness companies are estimated to be planning to spend $2.5 billion in deals in several countries. A delegation of 35 Indian investors, including food conglomerates McLeod Russel, Kaveri Seeds and Karuturi Global, had toured Ethiopia, Tanzania and Uganda for a week recently under the aegis of Ficci to seek land to grow palm oil, maize, cotton, rice and vegetables, largely for the burgeoning Indian market. It is not just large Indian companies, but also the small and medium enterprises in sectors ranging from spices and tea to chemicals that are looking at entering the commercial agriculture space in Africa.
But more than Africa the emphasis is now on Latin America. An increasing number of Indian companies are looking at Latin America as a safe investment destination, mainly because of stable governments and economic policies. These markets are also becoming a potential lifeline as India deals with food shortages and droughts. Earlier, India was bullish on Africa, but political turmoils there gradually shifted interests towards Latin America.
According to an MEA official, ?there is immense scope for collaboration between businesses of the India and the LAC (Latin American and Caribbean) region in beefing up India?s food security and in areas related to development of agriculture and agricultural processing. With climate changes wreaking havoc in the agriculture output, India and LAC could synergise and complement each other to meet the growing food crisis?.