Sep 27, 2009

The global land rush continues

When the Ravalomanana government in Madagascar was overthrown for handing over 1.3 million hectares -- half of its total arable land -- to Daewoo of South Korea, I thought at least India is not being accused of taking an East India company onto tthe shores of this poor African nation. But hold on, I was mistaken.

A Mumbai-based company, Varun International, is still in negotiations with the Madagascar government for acquring 170,914 hecatres of land to grow rice, corn, wheat and maize. These and several other instances of how Indian companies have joined the global land rush have been very neatly brought out in a cover story by the Times of India in its inaugural weekend crest edition (TOI Sept 26-Oct 2 2009).

The Guardian, in a recent article, says the report, wrote, "India has lent money to 80 companies to buy 350,000 hectares in Africa." And there are reports that Indian companies are eyeing not just Africa and Latin America, but countries nearer home, such as Myanmar, as well as those further afield, like Australia and Canada.

Within India, Indian companies are acquiring land in the guise of boosting exports. The Special Economic Zones is merely an euphemism for domestic land acquisitions. In a leading letter to Outlook magazine (Oct 5 2009 issue) I wrote: It is good to see Outlook continuing to blaze a lonely trail with its investigations and exposures. That said, the wakf board scams are a brief diversion compared to our biggest land scandal, the special economic zones (sezs). The government is doling out all sorts of sops to ensure that these 'princely estates' -- some 600 of them -- can operate like small kingdoms. Except for flying their own flags and having their own ambassadors, they look to be autonomous in all respects.   

For a country that ought to know better (having lived through a colonial past) how damaging colonisation can be for any nation, I am shocked at the way some of the Indian companies are trying to acquire land in Africa, Latin America and Southeast Asia (not to talk of within the country). Still more intriguing is the role being played by the government in facilitating the process, and that too by a government which swears in the name of the Mahatma. What a shame.

The TOI report The New Landlords states that an area of more than 33 million hectares, almost equal to the size of Germany, has already been leased out or acquired worldover by hungry corporations.

As I said in the report: Outsourcing food production will ensure food security for investing countries but will leave behind a trail of hunger for local populations...The environmental tab of highly intensive farming — devastated soils, dry aquifer, and ruined ecology from chemical infestation — will be left for the host country to pick up." That's quite apart from the fact that locals do not gain from the increased productivity since the output doesn't accrue to them. And this makes me again draw your attention to the story of food exports to UK at the time of the Irish Potato Famine. While millions perished from hunger and starvation, food was loaded onto ships enroute for the colonial masters. If you have missed out on this, you may search for my article Outsourcing Food Production on the net.

Here is the detailed article by Indrani Bagchi

The New Landlords

Indrani Bagchi,
Times of India | 26 September 2009

Ramakrishna Karuturi does not feature on any international power list. Perhaps he should. A new UNCTAD (UN Conference on Trade and Development) report names Karuturi Global Ltd as one of the top 25 agri transnational corporations in the world. Another report, by the International Food Policy Research Institute, says he owns one of the world’s largest landbanks — over 3,000 sq km. In a conversation with The Times of India, he claimed, “I’m the largest landbank holder in the world.”

Karuturi’s modest floriculture business outside Bangalore really blossomed when he discovered faraway Ethiopia in 2004. The African country welcomed the industrious Indian farmer and in the span of a few bountiful years, KGL has grown to become the world’s largest producer and exporter of roses.

The 43-year-old engineer-MBA is now venturing beyond Ethiopia and the rose. In 2007, his company acquired Sher Agencies in Kenya, the world’s largest rose farm, which incidentally employs four national football players. Then, last year, KGL bought more land in Ethiopia for sugarcane, staples, coffee and palm oil. And now, he’s set to enter Uganda and the Democratic Republic of Congo.

KGL is one of the pioneers of what Japanese financial services giant Nomura Securities calls “the third wave of outsourcing”. With world consumption of foodgrains having outstripped production in eight of the last nine years, and cultivable land increasing at a negligible 0.27% per annum, the spectre of a serious food crisis and spiralling prices is very real. Food import bills have already risen about 25%. Indian consumers, too, have been hit hard by soaring food prices.

In a breathtakingly ambitious bid to ensure food security, a number of countries — particularly those that are cash-rich but land-poor — are buying up enormous swathes of farmland in the poorer nations. In the last one-and-a-half years alone, over 33 million hectares of prime agricultural land in dozens of developing countries have been snapped up. That’s roughly the size of Germany.

The land is used to produce food, fodder and fuel, which is transported back to their own countries for home consumption (and partly for third-country sale).

Sensing a great opportunity for profit, private agri-business companies and investment/hedge funds have joined sovereign nations and state-sponsored corporations in the land-buying spree, as have a number of automobile manufacturers who are exploring biofuel alternatives to petrol, diesel and gas.

There have been several cover stories on the global race for the earth’s treasures, from oil and gas to coal, iron ore, bauxite (for aluminium), zinc, copper and gold รข€” a race India’s very much a part of, but one that China’s clearly winning as it uses its huge financial reserves to take over mines and mining companies across continents.

It’s the stampede for land that promises — or threatens, depending on your point of view — to reshape the map of the world, and its geopolitics.

Analysts estimate that over $60 billion has been committed to acquire land and establish farms to produce foodgrains, oilseeds, and biofuel crops. These eye-popping numbers could be just the tip of the iceberg, since most deals are cloaked in secrecy.

Read the full article at


Anonymous said...


Barbara Panvel

Anonymous said...

very good

Anonymous said...

very good