In the past one year, the drought in the Horn of Africa consisting of Ethiopia and Somalia has morphed into the biggest humanitarian crisis in history. People migrating to refugee camps perish before they could reach their destinations. While this painful process is going on, a new wave of agriculture is taking shape in these countries. Agricultural companies from developing countries like India and China are making huge investments in Ethiopia and neighbouring countries. They are buying up lakhs of hectares of arable land, sometimes after evicting the original inhabitants.
A feature of these African countries is that the farmers do not have any rights on their land. Government owns majority of the farmlands in Ethiopia. The peasants use ancient techniques of cultivation. When rains fail, their survival depends on the food aid. To breathe life into this agriculture sector, the Ethiopian Government began wooing foreign investors in the later part of the past decade. They were offered large tracts of land at rock bottom prices. They were also given tax breaks and Government built the roads and other infrastructure.
The biggest investor in Ethiopia currently is Karuturi Global ltd., a Bangalore based neo agricultural company. In the province of Gambella, they were given 300,000 hectares of land on a 50 year lease, at 10 dollars a hectare. They are cultivating palm, rice, sugar etc. They had promised homes, schools and clinics to be built in the locality but these are yet to be fulfilled. Thousands of farmers were evicted from the land they have farmed for generations. Compensations were not given because they do not have ownership on their land. Recently, Ethiopia slashed the size of Karuturi Global Ltd.’s land concession that was larger than Luxembourg on concern it was too big for a single company to manage and to enable an annual migration of antelope.
Forests across hundreds of hectares are being felled and burned to the dismay of locals and environmentalists concerned about the fate of the region's rich wildlife. There have allegedly been a number of arrests and killings of local people who oppose the recent land investment. The deals are signed in such a way that there are no limits to where the companies can sell their crops. So, most of these agro products are exported. David Hillam, Deputy Director of the FAO, told a conference in Washington DC in 2009, "Imagine empty trucks being driven into, say Ethiopia, at the time of food shortages caused by war or drought, and being driven out again, full of grain to feed people overseas. Can you imagine the political consequences?" However, Karuturi's CEO, Sai Ramakrishna Karuturi, denies such allegations when he says, "We are putting money into Africa and making the lives of these exploited people better."
In Ethiopia, some of the land now being used by foreign companies had formerly been used for the production of teff, the staple diet of most Ethiopians. Now the land is being used by companies like Karuturi to produce such crops as maize for export. It is believed such shifts have contributed to the recent local price increase in teff, the supply of which has decreased as demand has increased.
The Indian Government and the Indian business associations have provided strong support for these companies’ endeavors in Africa. The stagnant food grain production and dependence on international food imports prompted the Government to look for other avenues. Rapid industrialisation and conversion of farmland for other uses has reduced food grain production. Water availability, exacerbated by climate change and increasingly erratic rainfall has also hit Indian agriculture hard. The opening up of some agricultural items to International trade without proper restrictions, have also impacted the domestic prices. In this scenario, the Indian Government has supported a host of initiatives to facilitate Indian agricultural companies in their overseas investments in Africa. They support conventional new greenfield foreign direct investments, merger and acquisitions, public-private partnerships and specific tariff reductions on agricultural goods imported to India.
Another major way the Indian government has financially facilitated the process is by giving concessional Lines of credit to various African governments, banks, and financial institutions through the Indian ExportImport Bank (Exim Bank). Often such lines of credit are for the purpose of national development projects, and where these projects involve agricultural development, Indian foreign investors stand ready to win concessions and contracts for agricultural development in the form of their foreign direct investment. The Indian government has also liberalised its regulations on allowing outward foreign direct investment by Indian companies. The Confederation of Indian Industries and the Federation of Indian Chambers of Commerce and Industries have organised several buyer-seller meets between African delegates and Indian businesses to facilitate agricultural investments in these countries.
In 2009 the FAO along with the World Bank and other organizations drafted the Responsible Agricultural Investment (RAI) principles, a set of best practices and principles that foreign investors ‘can’ adhere to. These set of rules were supposed to govern the international transactions of farmland and also expected to incorporate the rights of the local residents. However the RAI principles have been widely criticised by activists and scholars as an insufficient response that can actually result in legitimising a process many feel is rife with exploitation and rights abuses. Critics say the fact that the principles are only voluntary falls far short of actual laws and strict regulations that could be enforced.
In June this year, Obang Metho, Executive Director of the Solidarity Movement for a New Ethiopia (SMNE), a non-violent, grassroots social justice movement, wrote an open letter to thepeople of India. She raised some pertinent questions-“Any who resent the colonial past of your own country, should know that it began through the British East India Trading Company; where some of the more unscrupulous often colluded with corrupt indigenous government officials. What would Gandhi say today were he to know that Indians, who were only freed from the shackles of colonialism in recent history, were now at the forefront of this “land-grabbing” as part of the race for foreign control over African land and resources; currently being called the Neo-Colonialism of Africa?” The Indian media was largely silent on this issue except for an article by Jayati Ghosh in frontline two months back. The rest of the media were largely celebratory with regard to companies like Karuturi.
So, are we trampling upon the rights and lives of these innocent Africans in our quest to become a developed country? Or, are processes like these inevitable in a world which is increasingly finding it hard to feed its millions?
References for this post- Rick Rowden's study on 'India's role in the global farmland grab'
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