India’s Role in the New Global Farmland Grab

See how CII, CIFA, FICCI etc have played an important role in new farm by Indian companies

indias role in new global farmland grab

This report explores the role of Indian agricultural companies that have been involved in the
recent trend in large-scale overseas acquisitions of farmland, criticised as “land grabbing”.
While many international companies have traditionally grown cash crops abroad, and more
recently crops for producing biofuels for global markets, this report is focused especially on
the issue of Indian companies that invest in food production overseas.

The report examines the various factors driving the “outsourcing” of domestic food
production. Primary among these are the Indian Government’s growing strategic concerns
about ensuring the country’s long-term food security, and its concerns about diminishing
ground water tables in Northern and Central India. Other factors include the allure for Indian
foreign investors of much cheaper land and more abundant water sources in overseas
locations and the eager welcome of many developing country governments, many of which
have courted Indian agricultural investors. In many cases, such countries have offered special
incentives, including the offer to lease massive tracts of arable land at very generous terms,
including access to water and the ability to fully repatriate profits generated.

The report also lists the major ways in which the Indian Government has been increasingly
pro-active in taking steps to facilitate this trend for overseas agricultural investment by Indian
companies, such as high-level trade diplomacy and lines of credit from the Export-Import
Bank. India’s outward foreign direct investment has been enabled by a series of reforms and
modifications over the last decade to India’s rules and regulations on Indian companies
investing in overseas operations.

Also reviewed are the pro-active roles played by national Indian business associations such as
the Confederation of Indian Industry’s (CII), the Associated Chambers of Commerce and
Industry of India (ASSOCHAM), the Federation of Indian Chambers of Commerce and
Industries (FICCI), as well as by sector-specific groups, such as the Consortium of Indian
Farmers Association (CIFA) and the Solvent Extractors Association (SEA) of India. Such
groups have been actively engaged in high-level trade delegations to countries which are
interested in luring Indian agricultural firms to invest, and have arranged a series of business
conclaves and trade fairs. The groups are all active in lobbying the Indian Government to
pursue even further reforms to trade policy, Exim Bank credits and the rules on outward
foreign direct investment in order to facilitate the overseas acquisitions of agricultural land by
Indian companies.

The report also explores the negative consequences of such a trend. It looks at why critics
have called the trend “land grabbing” and reviews the impacts on local peoples on the
ground, who are often displaced in the process. It considers the negative ethical, political,
human rights and environmental consequences for the people and host countries involved in
such investments by Indian companies.

Although information about such overseas operations by Indian companies is difficult to get
from the Indian Government, this report used available research and press accounts to explore
the details of 19 Indian companies who have made such land acquisitions abroad, including
an exposé of the actual contracts of 5 Indian companies operating in Ethiopia. Ethiopia has
taken center stage in the story of “land grabbing” because it is one of the developing

countries where some of the largest agricultural land acquisitions by foreign investors have
occurred, including by Indian firms.

The report reviews the calls by many advocates for a major shift away from the current model
of large, corporate commercial agricultural production based on monoculture, which depends
on chemicals and genetically-modified organisms (GMOs), towards an alternative
agricultural production model based on a more decentralised approach that favors small
holder farmers. Such an approach is based on agro-ecological methods that support and
enhance biodiversity, environmental sustainability and community control.

Finally, this report gives voice to those Indian activists fighting for small farmers rights and
against the “land grabbing” going on within India, and their call to create international
linkages of solidarity with small farmers in other countries who are facing similar problems.
They see a “common struggle” everywhere in the world and are calling on Indian citizens to
take action to address the problem of landing-grabbing by Indian companies operating
overseas.

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