Investors see growing fields of opportunity across Africa

Once the jewel in Britain's colonial crown, India is fast becoming a coloniser as it acquires vast tracts of land across Africa to farm a range of food crops for local consumption, import back home and export.

Backed by federal government loans, cheap credit and preferential import tariffs, some 80 private Indian companies have, over the past two years, acquired or leased thousands of hectares in Ethiopia, Kenya, Madagascar, Senegal and Mozambique's Zambezi Valley.

They are growing rice, sugar cane, maize, pulses, oilseeds, tea and even flowers, vegetables and fruit. Many Indian investors are also cultivating jatropha, the bio-fuel crop in West African states as part of the country's overall strategy of crop outsourcing.

Indian agricultural experts said that, unlike in the past when governments and conglomerates colonised and acquired land for profit, the 21st century drive was prompted by escalating shortages in emerging economies like India and neighbouring China where rising incomes were generating higher demands for food.

India's annual food grain production of 230 million tonnes is barely enough to meet a growing local demand.

However, environmental changes triggered by global warming, shrinking land holdings and urbanisation of agricultural land are affecting output.

Over half the US$4.15 billion ($6.23 billion) invested by the New Delhi Government in Ethiopia last year was via long-term loans which have enabled Indian conglomerates to develop in agriculture and floriculture.

In early June, the Bangalore-based Karuturi Global signed an agreement with Ethiopia to grow palm trees (for oil), rice and sugar cane on some 300,000ha of land. Flowers such as roses and gladioli grown here would be exported to European Union countries, significantly boosting company profits.

And in January another Indian company Varun Agriculture SARL inked an agreement with 13 landlords in Madagascar's Sofia region for 170,914ha to grow rice, corn, maize, wheat, pulses, fruits, vegetables and other local produce for both domestic use, import to India and for export.

But such activity has been criticised by food policy experts who accuse the Indian Government with practicing "neo colonialism" and of sponsoring "exploitative" agreements with poor African states. They reason this would further exacerbate their food insecurity, triggering civil strife.

"I call them food pirates on a land grab spree," Devinder Sharma of the Forum for Biotechnology and Food Security based in a Delhi suburb said. "The environmental cost of intensive farming like exhausted soil from over fertilisation and over exploitation of water resources would be the liabilities left behind for the host country."

The Confederation of Indian Industry disagrees. "Involvement in agriculture across Africa is a business model that provides value addition locally to the concerned countries," said Shipra Tripathi, the head of CII's Africa Division. It greatly helped entrepreneurs from either side by enhancing commerce, providing employment and boosting depressed economies, she said.

India is one of Africa's relatively newer and more modest colonisers.

According to a report by the International Food Policy Research Institute in Washington, between 15 million to 20 million hectares of land had recently been sold for US$20 billion- $30 billion across Africa to a handful of investors from China and the Gulf - regions which face graver land and water shortages than India. South Korea has also joined in the race, buying 690,000ha in Sudan to grow wheat to meet domestic demands.

"Many governments, either directly or through State-owned entities and public-private partnerships are in negotiations for, or have already closed deals on, arable land leases, concessions, or purchases abroad," said the IFPRI report titled Land Grabbing by Foreign Investors in Developing Countries: Risks and Opportunities.

India is also challenging China's influence across Africa by investing in infrastructural, industrial and human resource capabilities in return for access to vast, untapped reserves of oil, gas and minerals.

India has in recent years developed close relations with the 53-member African Union and various regional organisations not only by extending credit and expanding trade but also by building defence and military links.