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Wednesday, 01 December 2010 13:05

Agriculture Outsourcing & Food Security: A Way towards Mutual Cooperation

India, Africa & LAC under South-South Cooperation

Dr. Suresh Kumar

Indo-Africa Business. EXIM Bank. May-July 2010

The CII invited the author as delegate in 6th Conclave on India-Africa Project Partnership of 13-15th March 2010 and 4th CII India-LAC Conclave of 29-30 April 2010.

Introduction

The concept of agriculture outsourcing has different connotations since European Industrial Revolution of 1848 that led to the colonialism in Asia, Africa and Latin America & Caribbean (LAC) countries. This revolution required the raw materials such as cotton, tea, palm, cocoa and iron ore and human labour on the one hand and an urgent market to sell the finished goods to sustain themselves on the other hand. India, Africa & LAC (IALAC) countries fought against this colonialism. The post Second World War (1940 onwards) began neo-colonialism and the economic exploitation through Structural Adjustment Programme (SAP) in agriculture outsourcing in Africa & LAC region, which continued till 1990. Consequently, the food scarcity and poverty in the developing countries has become a major challenge.

The post 1990 end of Cold War has opened the gateway for the developing countries to share their common concerns of food security. India’s current population is around 1.15 billion in 2010 that is the second largest in the world. Approximately 50 percent of its agricultural land has been used to fight against food insufficiency. Similarly, African continent is having approximately 840 million people in 2010 using approximately 3 percent of its land for the agriculture by employing the traditional methods of agriculture productivity. The LAC countries approximately consist of about 795 million population and good amount of its agricultural land need balanced scientific techniques for agriculture production. The Water table is falling as per the NASA imagery in India. The optimum cultivation of land with the availability of water in India is not sufficient to cater to the billions of population. The Worldwatch Institute observed that India will be the second food grain importer requiring around 45 million tons in 2030 after China. India is ready to share its agricultural scientific knowledge with Africa & LAC (ALAC) countries for the benefit of all.

Issue of Food Security
The issue of food security is the genuine concern in IALAC region. India has faith that ALAC regions are not accepting the Concept of Aid in terms of quantity, rather demand quality to be an integral part of economic development. Science and Technology (S&T) of India shaped new vision in the agriculture sector that believes in self-reliant agricultural growth in IALAC region that will lead to self-reliant development. The development cooperation should not be based on donor-recipient basis but stand on equal partnership. The Delhi Declaration 2008 mentioned that India is committed on technology transfer and capacity building. There is also need for a closer look at the IPR regime to ensure cost-effective transfer of appropriate and advance clean technologies to ALAC countries. India endeavors capacity building in policy analysis, planning and training in agriculture sector to ALAC region. It has adopted collective engagement of food security in ALAC countries that will promote the region’s agriculture outsource and agro-industry by producing surplus agriculture output.
India targets food security and education among youth in ALAC region. Oil prices are quadrupled and are sucking the economy of developing countries badly. There is a need to look for alternate source of renewable energy, which should not harm the environment. Developed world is misusing wheat, corn or soya in the production of ethanol and hence a direct threat to food security. Ethanol is used in preparing bio-fuel and almost 12 billion USD spent to divert edibles in the production of ethanol in USA. As a result, there is crisis situation in international food market and food prices have shot up. Consequently, people of IALAC are dying of hunger and starvation. India neither supports such inhumane use of cereals for bio-fuel on international platforms nor is encouraging Indian Research & Development (R&D) sector to work on it. One SUV fuel tank (of 45 liters) is filled with the bio-fuel produced by corn may serve a person’s food for one year. It is clear that India’s agriculture knowledge will enhance production five to seven times in ALAC region not for the Ethanol but to promote the food security.
The additional food surplus of ALAC region through Transfer of Technology will promote agriculture outsourcing to India ensuring food security of this region and not for the use of bio-fuel. India as per its present and future status of food security needs active support from ALAC region that will give a real shape to South-South Cooperation in which the practice of neo-colonialism using cereals for bio-fuel has no space.     
Relevant queries that raised a genuine concern as to why and how the land of ALAC region will provide food security to India are as follows:
1.    ALAC has abundance of land and water that will be used to develop agriculture sector. India’s S& T in agriculture will initiate another Green Revolution in these regions that will secure the Food Security of ALAC countries on the one side and provide additional employment opportunities to indigenous people in this sector on the other side. The surplus agricultural products will be shared with India by using agriculture outsourcing that will provide foreign reserve to ALAC countries. The idea of India ushering in neocolonialism in Africa & LAC region will shrink down by its transparent practices in this sector.  Agriculture and agro-infrastructure are inter-linked and need mutual support, which persuaded ALAC region to share Indian experience through National Research Development Corporation (NRDC), Central Food Technological Research Institute (CFTRI), Council of Scientific and Industrial Research (CSIR) and Indian Council of Agricultural Research (ICAR) that have assisted its agriculture engineering and developing their business ideas in the ALAC regions. It is already clear that India needs to outsourcing of production of different cereals to feed Indian population and the above discussion will work on mutual basis to strength the South-South Cooperation in practice. 
2.    Today, ALAC is the hub for resources with leading world powers eyeing these continents for its natural resources. Only an average 3% of cultivatable land using conventional system in Africa is being used now, which is not sufficient to feed the entire population of Africa. Similarly, 37% of the world’s unexplored arable land having 12% of the world’s fresh water reserve is found in LAC region. It is imperative to incorporate the development of agriculture sector as a prerequisite to country’s progress and overall prosperity in contemporary IALAC regions. The outsourcing in agriculture sector is inter-linked and needs mutual support, which persuaded ALAC countries to share Indian experience in this sector and benefit by sharing the surplus production for the Indian population on the other side.

Issue of Agriculture Outsourcing


Being the largest population of the world, the agriculture land is overusing by producing cereals for the billions of people of India. As a result, the water table is lowering and may be a serious challenge to produce cereals in future by 2020. The climate change is another major challenge that leads to unpredicted weather conditions (droughts or flood) on the land of India. Dave Ramaswamy, the partner of Allied Venture highlighted during the 4th CII India-LAC Conclave said that ‘the land per capita in India is shrinking from 1 to 1.5 acres (0.3 hectares) and farming has become a terrible business and about 45% of farming community wishes to quit farming. The average land in India (from10 to 100 acres) is distributed unsystematically that leads to bleak supply side. The rapid urbanization has increased the cost of land about $20,000 per acre in India. The climate change and drying glaciers as per NASA image of water table is showing the dangerous red signs in India’ (emphasis mine).
This situation poses a challenge before India that despite highly developed S& T of agriculture sector, it cannot sufficiently feed its people. The discussions during the last 6th India-Africa & 4th India-LAC Conclaves came forward with the idea of agriculture outsourcing within the frame work of South-South Cooperation to strengthen the food security of IALAC regions through reciprocal distribution. India will be the largest importer of the food in the world. The agriculture development in ALAC regions will not only strengthen the food security to its indigenous people but will also play its role as the world grainary. It will be the additional source of income for the ALAC countries as it will bring the foreign reserve by outsourcing numerous items related to agriculture sector.
ALAC regions produce the surplus of soybean, coffee grains, sugarcane & sugar, fats, vegetable & animal oils, ethanol, oranges, beverages & vinegar, organic chemicals, pulses and other cereals. It is worth mentioning here that sugarcane should be outsourced to India for the production of sugar and not to South Africa for the production of ethanol oil. The priorities to use the different agriculture outsourcing needs to be fixed under South-South Cooperation whether the outsourcing should be used for the survival of human beings or to produce bio-fuel to cater selected section of the population.
India, South Africa, Tanzania, Nigeria, Sudan, Ethiopia, Kenya, Egypt, Morocco,  Brazil, Argentina, Venezuela, Mexico, Colombia, Peru, Chile, Jamaica, Cuba and others are showing their presence and strengthen political economy globally. India is working for technology transfer that contributes to growth, poverty reduction and socio-economic security. There is a need to conglomerate the technology and majority of people’s need. This IALAC partnership primarily a step towards development and mingling the common idea of mutual progress and prosperity will facilitate the way towards mutual India-Africa-LAC socio-economic transformation.

Conclusion

Public-Private Partnership (PPP) in ALAC regions are concerned about the relative decline of agricultural production of domestic food and industrial requirements. It is estimated that the use of 15 percent of the total land in ALAC countries is sufficient for the domestic consumption including food stock for the emergency. Indian investors are buying land in Africa for agricultural outsourcing. The sharing of the total produce should be in the ratio of 70:30, where 70 percent should be reserved for the export & industry and only 30 percent should be used for domestic consumption. This ratio may vary from 70:30, 75:25, 85:15 and so on depending on particular country’s land fertility and the requirements of the total population of the country concerned. The suggestion to put this ratio is that the lower proportions are sufficient to cater to the population of a country. ALAC governments should adopt a method of assessing the quantity of food production required for local markets versus production for outsourcing. Along with it, similar method should be used for local agro-industrial activities. These measures will help to develop mutual understanding among PPP.

Figure-1




The improved connectivity between India and ALAC regions (Figure-1) are the essential first step towards developing a deeper agriculture outsourcing and other economic relationship. Developing logistical chains and creating inter-connected transportation hubs (Figure-1) will address more than just the trade needs on both sides and there is need for policy intervention with strong private sector involvement in this critical area.
Overall, India’s worry about future food security to cater to its billions of population will not snatch the bread of Africa and LAC countries people. The scientific investigation leads to miraculous results that strengthen the real way towards South-South Cooperation such as:
1.    Indian government approved sector wise FDI in manufacturing, financial & non-financial services and trading. This data does not show anywhere about the government’s investment in procurement of land. In agricultural sector in general, it proves that it is not being used for land grabbing or for food piracy.
2.    The average use of 15-20 percent of total land in Africa and LAC countries produces the cereals for the domestic consumption as well as storage sufficiently.
3.    Hundred million hectares is farmed land in LAC countries and nearly 170-200 million hectares can be brought online for the agriculture production. 

The IALAC regions agriculture outsourcing is a challenge to the SAP policies that failed to provide the food sufficiency in Afro-Asia-LA regions in the last forty years and focused only to fulfill the demand of industrial raw materials. The agriculture outsourcing will work as linkage among the largest part of the world (Asia-Africa and LAC). It will prove that the mutual partnership of the developing countries is sufficient to fulfill their food security needs. Also, it will strengthen their human resource in the long term and will not have to depend on the developed world for the Food Aid.