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Food Security and India’s Vision of Agriculture Development in Africa

Dr. Suresh Kumar

Africa Review, May 2012


Introduction

Agriculture is the dominant sector of Indian economy, which determines the growth and sustainability. About 65% of the population still relies on agriculture for employment and livelihood. The green revolution transformed India form a food deficient stage to a surplus food market. In a span of 3 decades, India becomes a net exporter of food grains. Remarkable results were achieved in these fields of dairying and oil seeds through white and yellow revolutions. The rich experience of India’s Green Revolution needs to be shared with the African countries that will convert the barren land of Africa into Green Horizon. This Green Horizon engrosses enhanced cereal and other agro-products in the region that will boost agro-market & automatically the rural incomes leading towards food security. The rich experiences of scientific farming technologies in India will boost Africa’s world’s food basket, micro-financing institutions to grow better, by transferring Indian expertise in this field and encouraging Indian agro-processing firms to invest in Africa and promote joint initiatives in organic farming to meet the demand world markets. “Recent policy discussions have emphasized the importance of the staple food crop sector in Sub-Saharan Africa in increasing farm productivity to achieve food security and to alleviate poverty. A critical issue in the debate is how the staple food sector can generate surpluses and how to ensure an equitable distribution of these surpluses. It is argued that the governance of food markets and commodity chains is a crucial element for efficiency and distributional effects, including for growth and food security- and that the chain governance itself is endogenous in an environment of weak contract enforcement and imperfect markets, and importantly depends on the value in the chain and on other commodity characteristics” (Alexander Sarris, 2010:77).

The Structural Adjustment Programme (SAP) started in 1960’s in Africa and focused upon the development of agriculture sector. One knows the experiences of production of Cocoa in Ghana and Ivory Coast that led to neck-throat competition among them. It ultimately benefited the European and American market as the demand of cocoa was tremendously high and the African farmers failed to cater their basic needs for survival, and nothing had come forwarded on the name of food security. As we know, the agriculture accounts for more than 25% of the GDP in most African countries and employs more than 70% of the workforce and having approximately 783 million hectares of arable land (27% of the world total). But SAP did not cater to this work force in Africa. The neo-colonial practice in Africa successfully worked from 1950 to 1990 and stopped functioning with the disintegration of erstwhile Soviet Russia and the independence of South Africa. The post 1990 globalization has marked the effective presence of developing countries of India, China, Brazil, East-Asian countries and Africa in the international market. A new development approach ‘Cohesive Development’ of developing countries has been adopted and many more countries have adopted the electoral democracy and multi-party system in their homes. India and Africa both are serious about the issue of food security and are ready to change their existing land laws, practices and adopting the new guidelines as per the needs. India is sharing its rich experiences in agriculture sector with African countries and receiving reciprocation.

The Western world looks for the bonding among developing countries as a new concept of colonialism. This connotation ‘colonialism of market economy’ cum globalization is different from the European Colonialism of political and economic sharing to Neo-colonialism of economic plunder. It is interesting to note here that both the European and American colonial master till 1990 had no role to play in this new colonialism rather they are interpreting new colonialism more vigorously with rich bandwagon. It is a hard fact that the Euro and dollar market faced a tough face of market depression since 2007 onwards. The markets of Asia, Africa and Latin America did not get a U-turn impact like Europe and America and survived with the strong base of educated middle class. All of them come under as a group of South-South unity and having broader understanding on political, economic and social milieu. Indian agriculture produces 100 million tons of milk and 200-300 millions tons of vegetable goods but able to process 10 percent of the total and 40 percent gets wasted. Indian political leaders and industries are not looking towards western solution to this problem and re-think its approach of development. It is common consensus that agriculture needs value addition in its production and India’s federal polity need to work for economic federalism and persuade State leadership to act as execution driven leadership. This is the biggest challenge in India and the major development paradigm of North-South divide. The developed countries or North bloc have no issue of economic federalism and their provinces/states are capable to drive their own maneuver. But the developing countries or South bloc has adopted and are practicing the federalism but with complications of allocations of financial powers, collection and dispersal of taxation, complex social matrix including all ethnic issues. The Center and most of the State’s leadership has taken this issue seriously leading towards productive solution.

These initiatives are the timely step to deal with the Euro-dollar depression and it boosts India’s agriculture sector towards food for all. Do all these efforts lead towards India’s food security or new colonialism? What’s wrong with India’s sharing this expertise with the other members of South bloc mainly to African counterparts? There is no doubt about it that China has successfully implemented the idea of food security and alleviating the poverty in practice at home front. The second largest population of India has adopted their own pattern of development to over come the problem of agricultural production and its safety measures to reach to the maximum people. One fails to understand the idea of European and American philosophy of new colonialism and India act as colonial power in Africa. It looks that Euro-dollar crisis is looking towards the market of Asia, Africa and Latin America for their own survival and when it fails to sustain in these market with the development of indigenous technologies of developing countries, it looks revolting to the developed world. This is new colonialism or one may add the Euro-dollar cultural colonialism by imposing their philosophies on the developing world. Despite their past two hundred years of colonial and neo-colonial supremacy of Euro-dollar identity, it looks erstwhile superiority now in the developing world. India is working on another agricultural revolution to get its value addition and propagate it among the developing countries of Africa. This propagation will give a tough time to the wild-mongering SAP policies in Africa and other developing countries and introduce the idea of food productivity, processing and distribution. India is adopting e-based portal with single window these policies and the Euro-dollar domination of world looks it as a move towards new colonialism. The South bloc fought against the colonialism and got independence and it is not possible for the developing countries like India to move as colonizer either in Africa or any parts of the world. India respects the sovereignty of all of its neighbors and no country has come forward to the idea of India acting as colonizer.

The Post Summit 2011 development in Agro-Infrastructure Sector

There is a new economic growth story emerging from Africa. Africa possesses all the prerequisites to become a major growth pole of the world. India will work with Africa to realize its vast potential. India believes that a new vision is required for Africa’s development and participation in global affairs. Both will enhance the development partnership between the two regions, which is founded on the pillars of mutual equality and common benefit. India’s exports to Africa have risen from US$10.3 billion in 2006-07 to US$21.1 billion in 2010-11, primarily due to increase in exports of transport equipments and petroleum products, wherein India’s imports from Africa have more than doubled from US$14.7 billion in 2006-07 to US$32.3 billion in 2010-11, with the African continent now accounting for 9.1 percent share in India’s total imports. Consequently, due to large imports from the region, India’s trade deficit with Africa has also increased to US$11.2 billion in 2010-11, implying that India has become a major market for African products. Table-1 highlights India’s agriculture sector export and import items to Africa.

 

Line of Credit (LoC) of India and Agriculture Sector Development

Export-Import Bank of India (EXIM Bank) has in place LoCs to enhance agriculture sector in Africa. Currently, 105 LoCs are earmarked for agriculture, infrastructure and related projects amounting to more than US$ 4 billion covering over 47 countries in the African region. Some of the LoCs beneficiaries’ African countries (Table-1) dealing with agriculture sector are:

  • “Angola- Railway rehabilitation project/Industrial park/Textile project/and acquisition of tractors from India;
  • Burkina Faso- Rural electrification/Agricultural equipments and Cyber city project;
  • Burundi- Hydro-electric project;
  • Cameroon- Plantation project;
  • Chad- Setting up of cotton yarn plant, plant for assembly of agricultural equipment;
  • Cote d’Ivoire- Project for renewal of urban transport system in Abidjan and for agricultural projects/IT & Biotechnology park/Fisheries and coconut fibre processing plant/Electricity interconnection project;
  • Equatorial Guinea- potable water plant project;
  • Eritrea- Agricultural and educational projects;
  • Ethiopia- Energy transmission and distribution project Development of sugar industry;
  • Ghana-Rural electrification, agriculture, communication and transportation projects;
  • Lesotho- Export of tractors, pump sets, consultancy services and irrigation equipment;
  • Madagascar- Rice productivity and fertilizer production project;
  • Malawi- Cotton processing/irrigation & threshing plant/one-village one-project;
  • Mali- Rural electrification, and setting up of agro machinery and tractor assembly plant;
  • Mauritania- Potable water project;
  • Niger- Acquisition of transport equipments, transformers, motor pumps and flourmills;
  • Rwanda- Power projects;
  • Senegal- rural electrification project and fishing industry development project, irrigation project;
  • Sierra Leone- Procurement of tractors, harvesters and pesticides/potable water project;
  • Tanzania- Export of tractors, pumps and vehicles;
  • Zambia- Hydroelectric project/export of buses, motor vehicles, motor cycles and supply of vocational tool kits.”

Source: Background Note, 2012: 71-72: emphasis mine.

 

The post Forum Summit and the basis of India-Africa Conclaves documented that the Africa has approximately 783 million hectares of arable land (27% of the world total), which is adequate to effectively feed its population. It is the only region in the world where agricultural productivity has not grown noticeably. Increased agricultural output and income needs a green revolution with value addition in Africa. It will influence directly the output of the manufacturing and services sector. Agriculture has been at the forefront of the recent transition in India-Africa relations.

The agro-industry in Africa needs farm mechanization that will facilitate increase in productivity. The production boost in agriculture is the only way to initiate the agro-industry in Africa. It should be remembered that once there will be surplus production of food in Africa, the agro-industry will get the input of raw materials to produce different food products and cater to the needs of urban as well as rural areas. Approximately 80 Indian companies have collectively invested US$2.3 billion in Ethiopia, Kenya, Madagascar, Senegal and Mozambique (Indian farming companies buying in Africa. 2011). Some African countries are offering land on lease for 99 years to overseas farmers, and several farmers from Punjab in India have already migrated to these countries and begun farming (African nations offering land for free to Indian farmers,” The Economic Times website, http://economictimes.indiatimes.com/news/economy/agriculture/African-nations-offering-land-for-free-to-Indian-farmers/articleshow/6293149.cms, accessed 28 January 2011). Close to 70 Indian companies are working in the farming sector in this region (Indian business groups are investing heavily in Africa, 2011: emphasis mine). Such investments will generate local employment as well as create opportunities for local skill development.

Case Study of Africa Invitation to India for Agriculture Investment

  1. Botswana

India and Botswana agriculture, livestock and human resources development cooperation started in 1999. Indian seeds (Maize and Paddy rice) have been sent to this country for experimentation. A project for import of Indian Buffalos to this country has been set up. The farmer’s project has been finalized and since 29th October 1999 six farmers form Punjab have landed to this country in view of realizing this project. “The tender for the purchase of Indian tractors at large scale in under process.

2. Burkina Faso

The cotton from Burkina Faso exports to India. Burkina Faso is second largest producer of cotton in West Africa and ranks third in entire Africa. Today, many trainees from Burkina Faso are coming to India for training in computer education, diplomacy, telecommunications, etc. Botswana is looking forward to setting up units of production of commercial farming such as fruits, vegetables, Arabic gum and cotton. Livestock occupies an important place in the economy of Burkina Faso in West Africa. The opportunity in this sector is the setting up of:

  • Small industrial units for milk processing (dairy plants) breweries.
  • Small industrial units for production of animal feeds.
  • Small industrial units of veterinary pharmaceutical products.
  • Meat processing.
  • Small units for leather.
  • Cattle rearing-ranching and poultry
  • Industrial units of manufacturing tractors.
  • Industrial units of manufacturing pump sets for irrigation.
  • Industrial units of manufacturing agro-food products.
  • Small Industrial units for agro-chemicals (fertilizers and pesticides).
  • Industrial units of manufacturing textiles (Cotton fabrics, garment production and yarn).
  • Setting up commercial farming units (fruit, vegetables, Arabic gum and cotton).

Burkina Faso exports cotton, animal skins, and leather and cashew nuts to India and imports Agro-machinery (tractors and farm implements), Rice, small and medium scale industries (e.g. oil processing) from India. Burkina Faso guarantees the foreign investors such as:

  • Right of full business awareness for foreign investors.
  • Right to acquire real estate, land, forested land, industrial areas in addition to concession from government.
  • Right to transfer capital and profits of any investor.
  • The advantages of investing in this country are:
  • A possibility of Joint Venture with Burkina Faso business community.
  • Low cost of labour.
  • Good infrastructure (telecommunication, roads, railways and airport) and services.
  • Strategic position in the heart of West Africa.

3. D R Congo

The country is the land of opportunities wide open to everybody and agricultural sector is one of the priority sectors. In order to access these opportunities, the Government recommends the strategies such as: Public – Private Partnership, Public – Public Partnership and Private – Private Partnership in agriculture, forest and hydrographic, re-launch of food crops: maize, rice, tomatoes, groundnuts, bananas, resumption of palm-tree exploitation (Bandundu and Equateur), re-launch of income-generating farming: cotton, coffee, hevea, tea, cocoa, sugar cane farming, production and transportation of rough lumber (Equateur, Eastern Province, both Kasai, Bandundu, Mayumbe), bio-fuel production from palm oil, jatropha, seaweed of the river and lakes, etc, industrial timber processing (Kinshasa, Kisangani, Kananga), wood pulp production (Kinshasa), cattle breeding (Katanga, Kivu, Eastern Province, Bas-Congo), pig breeding and poultry farming all over DRC, milk production (Katanga, Kivu, Eastern Province, Bas-Congo), rehabilitation of the agro-industrial Domain of N’sele (Kinshasa) and Fluvial, sea and lake fishing. DRC’s food crops potential is tremendous and possible in manoic, maize, rice, groundnut, plantain, potato, yam, wheat, sorghum, bean, soya beans, tarot and sweet potato and market gardening is open for onion and tomato. The income-generating farming prefers fibre, hevea, millet, palm-tree, coffee, cinchona, cocoa, tobacco, cotton, pyrethrum, tea, gourd, sugar-cane, papaine, sesame, urena and voandzou (Invest in D R Congo, 2012: 12).

4. Ethiopia

The country has 111 million hectare of land out of which 74.3 million (45% of the total area) is suitable for agriculture. However due to underdevelopment only 18 million hectare is under cultivation. The government offers about 3 million hectare (5% of the available land) to local and foreign investors. The prominent investor ‘Sheikh Mohamad Al-Amoudi currently leases 10,000 hectares for a pilot project for rice production in Gambella Regional State. Under the agreement his company will be allowed to export no more than 60% of its production and 40% will be for local consumption. He is currently looking to increase the investment to US$450 million and expand the area for cultivation’ (Ethiopia: Land of Tomorrow, 2012: 5). The foreign investors may look for products such as:

  • Food Crops- Cereals and pulses, Oil Crops
  • Beverage Crops- Coffee, Tea
  • Horticulture- Fruits and vegetables, herbs and cut flower
  • Cotton, Sugarcane plantation and sugar processing
  • Rubber and Palm tree plantation and Apiculture- honey and beeswax
  • Bio-fuel production- feed stocks for bio-diesal: Jatropha, palm oil, castor, feed stocks for ethanol: sugar cane, sugar beet, potatoes, corn, etc.
  • Livestock- 43 million heads of cattle, 31 million heads of sheep, 27 million heads of goats, 53 million poultry, 2.3 million camels, 7 million equines. The investment opportunities here focuses on animal fattening, animal feed processing, meat processing and export abattoir for chilled and frozen meat.

The agro-processing deals with the processing and preserving of fruits and vegetables, meat products, , fish and fish products, dairy products, integrated production, processing of crude and refined edible oil from oil seeds, processing of crude and refined edible oil from oil seeds, processing of starch, cornflakes and edible oil from maize, processing of spices, production of spaghetti, macroni, etc, brewing and wine making (Ethiopia: Land of Tomorrow, 2012: 8: emphasis mine).

The government of Ethiopia provides 100% exemption for the payment of customs duty on imported capital goods, construction materials, and spare parts worth up to 15% of the total value of the capital goods to be imported. The income tax exemption gives right from 2 to 7 years for manufacturing or agro-industrial, agricultural and ICT investments.

5. Ghana

About 57% of total land (of 23.9 million hectares) is suitable for agriculture sector in Ghana and offers opportunities in different products as shown in the Table mentioned below.

  • Agriculture (Cassava, Cashew, Cotton, Sugarcane, Soya Beans, Oil Palm, Pineapples, Mango, Ostrich, Coconut, Tomatoes, etc.)
  • Agro-processing (Cocoa, Fruits, Rubber, Vegetables, etc.)
  • Food-grains (Rice, Millet, Sorghum, Yam, etc)
  • General Infrastructure (Agricultural and Industrial Estates, Roads, Railways and Ports).
  • Cattle, Sheep, Goat, Fisheries.

The government gives incentives by way of tax rebates for manufacturing in certain locations, tax holders, ranging form 5 to 10 years depending on sectors, custom import duty exemption for plant machinery, equipment and parts thereof and double taxation agreements. The tariff incentives refer to zero rated for agro inputs, plant and machinery and non-tariff incentives refer to observation of regulations on import/export of agro-products (Doing Business with Ghana, 2012: 28).

6. Kenya

Agriculture is the mainstay of the Kenyan economy with great potential for growth. It currently represents 24 percent of GDP. More than a third of Kenya’s agricultural produce is exported and accounts for about 60% of Kenya’s total exports. The vision for agriculture sector is to be innovative commercially oriented and modern, offering the investment opportunities in Sugarcane development, Value Addition and Marketing Infrastructure. This will involve the wholesale projects: Two wholesale markets for fresh produce in Nairobi, a wholesale market in Nakuru and a wholesale market in Mombasa. The Livestock production is one of the major activities in the sector that includes Dairy industry and Hides, Skins and Leather industries.

The fisheries sector plays an important role in the national economy contributing 0.5% to GDP in 2006

Areas for Private Sector Investment are Value addition in fisheries products, Certified fish seed breeding facilities to avail quality seed to fish farmers, Investment in Tropical Aquaria parks for local and overseas tourism, Fish leather industry and Cooling-plants in major landing bays of Mbita, Sindo, Sori, Sio port, Usenge and Port Victoria.

The water sector offers good investment opportunities in Water Storage and Drilling: Capacity Building of National Water Conservation and Pipeline Corporation and Mzima II Pipeline Project (Kenya- A Hub for Investment, 2012).

7. Mauritius

The agricultural sector in Mauritius is being re-engineered to cater for the rising needs of the global food security crisis with an increased diversification of agricultural production backed by modern techniques and technologies. Investment opportunities in the sector can be captured in advanced agricultural technology including precision farming, hydroponic cultivation, green and organic farming among others. Furthermore, the transformation of the sugar industry in the sugarcane clusters present opportunities for the production of high value-added sugar, by products and energy.

Seafood and Aquaculture Based on a current world per capita consumption of 16 kg., the global seafood market is estimated at USD 100 billion per year. Mauritius has an exclusive economic zone of 1.9 million sq. km and is set to emerge as a leading seafood hub with seafood export accounting for 16.1% of total exports in 2009. Mauritius also offers the opportunity for sustainable fish farming activities in its lagoon. Furthermore local companies are also involved in fish transshipment, seafood processing activities and ancillary services (Mauritius.2011:23).

8. Mozambique

The wide diversity of soil types and climatic conditions, access to over 60 rivers and 36 million hectares of arable land greatly enhance Mozambique’s potential as an agricultural exporter. The main agricultural exports include cashew nuts, cotton, sugarcane, a variety of fruits and vegetables and tobacco, but virtually any crop can grown easily in Mozambique – and harvesting can occur months before other countries. The rich waters in the Indian Ocean offer a variety of seafood products from world famous tiger prawns to crayfish to langoustine – as well as a variety of fish such as tuna, grouper and cod. Mozambique also has 19 million hectares of productive woodland, rich in tropical hardwood and to a lesser extent eucalyptus and pine. The natural potential of the sector offers a wide range of opportunities for timber, construction materials, furniture, wood products and pulp (Institute of Export Promotion Mozambique. 2011:7).

More than 95% of cashew marketed output is produced by about 1.4 million small family farmers in Mozambique and has cashew investment opportunities, distributionof production in North 57%, Center 24% and South19%. The investment opportunities in Mozambique has fvourable agro climatic conditions for cashew production having land available for new orchards, potential for new processing plants, all producitn provinces with aces to the see (Export infraestructures) and appropriate institutional environment. The investment opprtunities in chashew plantations as per the available area is mentioned under Table-1.

 

The Mozambican production and its presentation on global markets require a new approach in the packaging sector, to create conditions for the country to compete in an international market, where rules are constantly changing and consumer demands are rising continuously. The MOZNEGOCIOS-International Packaging and Packaging Equipment Trade Fair 2-10 June 2011 is a public event with international scope that involves producers, suppliers and consumers of the packaging industry from Mozambique and other countries. In this second edition, the MOZNEGOCIOS fair will bring together companies of the packaging sector and agro-processing enterprises (IPEME.2011:1-4).

Mozambique offers some of the best shipping ports in Southern Africa, serving as a link to the sea for its landlocked neighbours and the rest of the world. The three main ports in Mozambique are in Maputo, Beira and Nacala. The port at Maputo is the hub the surrounding fishing and agricultural industries serving South Africa, Swaziland and Zimbabwe. The ports in Beira and Nacala serve Malawi, Zambia and Zimbabwe. Beira is linked to by road and rail to the African hinterland. The recently modernized ports in Mozambique enable them to handle millions of tons of cargo arriving from and departing to distant international destinations (Institute of Export Promotion Mozambique. 2011:8).

9. Nigeria

In 2009, the Federal Government introduced the National Food Security Programme in Nigeria to focus on both upstream and downstream activities such as production, storage, processing and the marketing of crops, livestock and fisheries (Programme on Food Processing, Storage, Marketing Out. 2009).

10. Republic of Congo

The Ministry of Trade and Supplies attracts investment opportunities in Congo in the different areas of agriculture sector such as: ‘establishment of companies for rental and maintenance of agricultural equipment, fabrication of chemical fertilizers and production of natural fertilizes, revival of the business of coffee, cocoa, tobacco and others, creation of agro-food industry and revival of industries that have stopped exploitation and been privatized, such as Sanghapalm for the exploitation of oil palm at Oesso, in the north of the country, and RNPC, national palm plantations authority of Congo in the Cuvette region, establishment of the pilot villages, realization of the complex agro-industrial of oil palm, rubber and others, establishment of vegetable villages, intensification of vegetable planting around big cities, development of food crops (paddy, bean, groundnut, potato, cassava, banana, rice and maize, etc.), production of seeds of good quality, irrigation of the fields establishment of quality-control center and establishment of biotechnological laboratories’ (Investment Opportunities in Congo, 2012: 4).

The livestock production opportunities especially breeding sector attracts the restoration of ranches and farms development, production of animal feed, establishment of poultry farms and ranches, creation of processing industry of derivative livestock product, construction of abattoirs in big cities and the slaughter areas in the secondary centers, creation of purchasing centers of veterinary inputs, equipment and products, development of non-conventional livestock, such as crocodiles, turtles, pigeons, agouti, development of livestock with short-cycle reproduction (poultry, pigs, sheep’s, goats), amelioration of the forage plant and development of dairy cattle breeding. Along with it, the continental maritime fishing sector attracts the investors in establishment of structures of supply of materials and equipment of fishery at reasonable prices, establishment of structures for the factory and supply of food for fish, creation modern storage structures, establishment of transport companies for fishery products (land, river and sea freight), establishment of appropriate structures to finance fishery, construction of fishing jetty, valorisation of the lakes, development of fish breeding, breeding of freshwater crayfish and establishment of enterprises for fabrication and maintenance of fishing boats.

The forest sector of Congo attracts the ‘investors in obtaining exploitation permits and creation of exploitation companies, restoration logging companies, including industrial companies that have stopped exploitation due to diversified reasons by the management, establishment and development of tourist zones in the various wildlife reserves full of rare species and production of logs. The Congolese forests can support a production of two million m3 on the basis of a rotating exploitation with damage to their regeneration in sawing and development of wood, production of support poles of power lines, industrial processing of wood, production of pulp, exploitation of the hevea, fabrication of plant-based medicament and agro-forestry’ (Investment Opportunities in Congo, 2012: 3).

11. Togo

Le Parc des Expositions “TOGO 2000” of Lome will host the 9th International Trade Fair of Lome from 25th November to 12 December 2011 focuses on promotion of trade and services of all sectors of economic activities of countries in the sub-region as well as those of the other continents and contacts between professionals for the development of sub-regional and intercontinental commercial activities. This fair of Lome is opened to economic operators (manufacturers, industrialists, traders, businessmen /women and service providers) from Togo, Africa, Europe, Asia and America.

12. Tunisia

The agribusiness sector in Tunisia comprises 791 firms, employing 10 workers and more. Among these firms, 92 produce entirely for export (Table-1). The investments in the agribusiness sector have steadily increased during the period 1992-2001. They went from Million Tunisian Dollars (MTND) 100 in 1992 to MTND 204 in 2001. Their share in the manufacturing investments has been 21% in average for the same period. In 2001, the agribusiness sector occupied the 2nd rank in terms of investments in the manufacturing sector, preceded by the textile and clothing sector. ‘The exports of the agribusiness sector went from MTND 224 in 1992 to MTND 670 in 2001. The share of olive oil is 30%. The imports of the agribusiness sector totaled MTND 888 in 2001, against MTND 350 in 1992. The cereals and cereal by-products, seed oils, and sugars and sugar by –products represent 70% of the country’s imports of food products in 2001. Tunisia is the 4th international exporter of olive oil, after Spain, Italy and Greece. Given the highly-prized quality of its dates, Tunisia is the 1st world exporter of this product. 90% of the exports of frozen sea products go to Italy and Spain. 97% of the fresh tuna is exported to Japan. The agribusiness sector comprises 68 joint-venture firms, and 13, 100% foreign-owned firms. 25% of Tunisian engineers serve in the agricultural and agribusiness sector. The universities and technical institutes provied the local labour arket with some 300 specialised engineers per yar in the agribusines sector. There are also vocational training centres int eh agribusiness branch. Their training capacity is of 400 trainees per cycle (training session). A major programme is currently underway to enhane and adapt the training capacities to the needs of the firm’ (Agri-business: Achievements and Opportunities, 2012: 2).

 

13. Uganda

Uganda is east Africa’s food basket. ‘A KES1-billion food processing plant was commissioned at Makerere University’s Faculty of Food Science and Technology in Uganda in 2009. The fruit and vegetable processing plant, scheduled to operate on a pilot basis, will help the department produce fruit juice and other foodstuffs for sale as well as train students to become entrepreneurs and agro-processors’ (Food Processing Plant Launched. 2011). Similarly, Britania Allied Industries, a consortium of food processing firms, plans to invest KES11 billion for the construction of a fruit juice-processing plant in Namanve, Uganda. The investment incentives in agriculture sector focuses on:

Agribusiness

Uganda is among leading producers of coffee and bananas. It is also a major producer of tea, cotton (including organic cotton), tobacco, cereals, oilseeds (simsim, soya, sunflower, etc.), fresh and preserved fruit, vegetables and nuts, essential oils, orchids, flowers and sericulture (silk). Opportunities include commercial farming and value addition, as well as the manufacture of inputs and supply of agricultural machinery.

Fisheries

Uganda’s fish processing sector has expanded greatly in recent years and current export earnings for the year 2006 were close to US$146 million. Large fresh water expanses are home to a wide variety of fish products. Opportunities are available for fish farming and establishment of more fish processing factories on other lakes other than Lake Victoria, Uganda’s fish is a delicacy in Europe and has recently penetrated the US market.

Forestry

Uganda is having over 4.9 million hectares of rich forest vegetation. Uganda possesses abundant potential in areas like timber processing for export, manufacture of high quality furniture/wood products and various packaging materials. There are also opportunities in afforestation and reforestation especially of medicinal trees and plants, soft wood plantations for timber, pulp & poles.

 

14. Senegal

Fishing is a significant sector of the economy, but agriculture is Senegal’s principal resource accounting for almost 50% of the country’s total exports. Peanuts are the main commodity produced in the country, but attempts have been made to diversify into others, particularly cotton, the second largest export commodity, millet, sugar cane, fruit and vegetables. Phosphate is the most important mineral resource, although there are also significant iron ore deposits as well as oil. India facilitated Senegal agriculture sector on lines of credit such as:

  • ‘15 million USD for acquisition of agricultural material and the creation of rural enterprises.
  • 27 million USD for irrigation projects with a view to achieve rice self sufficiency.

Agriculture sector comprises of 70% of Senegalese population is central to the country’s development. India put at the disposal of 510 tractors, equipment for tilling, carts, drilling machines, pumps, trucks and maize processing and enriching equipment under Indo-Senegalese cooperation. Senegal government and Indian Farmers Fertilizer Co-operative Limited (IFFCO) signed an agreement of about $240 million. There are export opportunities in the agri-business sector, with the AGOA visa in:

  • Floriculture
  • Fruit Cultivation
  • Market Gardening
  • Thousands of hectares of Cashew nut plantation
  • Diversification of the industrial processing of groundnut.
  • Fish Cultivation
  • Support to the development of horticultural exports.
  • Improvement of the condition of market operation.
  • Support to agri-business producers and operators for a better adaptation of products to the market.
  • Development of private irrigation and land-related activities’ (Dr. Suresh Kumar.2008).

Senegal is dependent on import rice that reached 400,000 tones of CFA Francs 118 billion for 2003. As an alternative, the Senegal government offers investment opportunities in this sector particularly in Senegal River Valley region. Senegal has become a leading exporter of cherry tomatoes, fine green beans, basil, green asparagus, onions, potatoes and aborigines (Dr. Suresh Kumar.2008).

 

15. Zambia

Government regards the growth of the agricultural sector as a crucial element in enhancing Zambia’s foreign exchange earnings and economic development. Although the agricultural sector employs more than half of the total labour force, only 15% of the arable land in under cultivation. It is because of this potential that the government encourages investment in commercial farming. As the country is looking to diversify the economy away from copper, sectors has in agriculture production, which has not been fully exploited over the years. The sector has been performing poorly in recent years due to high input costs, inadequate infrastructure and low private investment in the sector. However to turn this around, the Government has increased its allocation of funding to the sector to address some of these constraints.

The government facilitates input tax claim for three months prior to VAT registration for businesses that have already commenced trading and reduction of VAT rate for investors in tax free zones (Zam-Indo Business Profiles, 2012:11-12).

Anyone investing not less than $500,000 in any of the priority sectors listed is entitled to fiscal incentives. The sectors are: Floriculture (Fresh flowers and dried flowers), Horticulture (Fresh and dried vegetables) and Processed foods (Wheat flour). The other processed foods include investment in Beverages and stimulants (Tea and tea products and Coffee and coffee products) and production and the processing of the following products in the textiles sector such as Cotton, Cotton yarn, Fabric and Garment and processing of Agricultural products and Forest products.

 

16. Zimbabwe

The agriculture sector remains under-capitalized with insufficient inputs and infrastructure. The Capitalization of commercial farming enterprises includes meat processing, poultry and fish farming, juice extraction, horticulture, floriculture and cotton-processing Infrastructure development and refurbishment, as well as investment in value-adding processing of agricultural equipment (Zimbabwe Investment. 2010-15).

 

17. Zanzibar

Zanzibar, part of United Republic of Tanzania offers investment opportunities in:

Agriculture

  • Horticulture and Floriculture.
  • Agro-processing.
  • Fruit processing and Canning.

Fisheries

There is a potential for development of various types of fish, shrimps, lobsters, seaweed and other marine resources. Investors are free to choose suitable areas for:

  • Deep sea fishing.
  • Fish Farming
  • Processing and Canning

Zanzibar is known as the Spice Islands. The investment opportunities in spices include:

  • Cloves,
  • Cinnamon, Cardamom, nutmeg, black pepper, chilies, etc.

Conclusion

India declared during the Forum Summit about the India-Africa Food Processing Cluster that will contribute to value-addition and creation of regional and export markets, an India-Africa Integrated Textiles Cluster to support the cotton industry and its processing and conversion into high value products, an India-Africa Centre for Medium Range Weather Forecasting to harness satellite technology for the agriculture and fisheries sectors as well as to contribute towards disaster preparedness and management of natural resources and an India-Africa Institute of Agriculture and Rural Development. India will work with Regional Economic Communities to establish at the regional level, Soil, Water & Tissue Testing Laboratories, Regional Farm Science Centres, Seed Production-cum-Demonstration Centres, and Material Testing Laboratories for Highways. The Forum Summit 2011 has focused on the Africa’s self-reliant development in agriculture sector and initiates an alternative to African countries either to go for the SAP or build indigenous techniques in the partnership with India and achieve the real reliant development and get rid of any sort of colonial past.

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Last Updated on Friday, 14 March 2014 08:12
 
Agriculture as an Emerging Sector: Mutual Interests of India and Africa. PDF Print E-mail
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Friday, 08 July 2011 05:15

Agriculture as an Emerging Sector: Mutual Interests of India and Africa.

Dr. Suresh Kumar

AFRICAN REVIEW. APRIL 2011. IACCI. MUMBAI.

Introduction

Agriculture accounts for more than 25% of the GDP in most African countries and employs more than 70% of the workforce (Challenges to Agricultural Development in Africa. 2011). Africa has approximately 783 million hectares of arable land (27% of the world total), which is adequate to effectively feed its population. However, the output is highly concentrated with Egypt and Nigeria accounting for approximately one-third of total agricultural output and the top 10 countries in the continent producing nearly 75%. Africa is the only region in the world where agricultural productivity has not grown noticeably. In fact, the Green Revolution, which enhanced agricultural growth in many Asian countries, is yet to take place in Africa (Raising Agricultural Productivity in Africa. 2011). The African agricultural sector has substantial potential to improve local economies and leave a lasting impact on the livelihood of its large populace. Increased agricultural output and income also has a multiplier effect on the economy because of its links with markets for the output of the manufacturing and services sector. Agriculture has been at the forefront of the recent transition in India-Africa relations. Various African nations perceive the success of the Green Revolution in India a role model. Moreover, India remains focused on capacity building, human resource development and the transfer of technology and skills as a key ingredient of its policy.

The agro-industry in Africa needs farm mechanization that will facilitate increase in productivity. The production boost in agriculture is the only way to initiate the agro-industry in Africa. It should be clear to all that once there will be surplus production of food in Africa, the agro-industry will get the input of raw materials to produce different food products and cater to the needs of urban as well as rural areas. Approximately 80 Indian companies have collectively invested US$2.3 billion in Ethiopia, Kenya, Madagascar, Senegal and Mozambique (Indian farming companies buying in Africa. 2011). Some African countries are offering land on lease for 99 years to overseas farmers, and several farmers from Punjab in India have already migrated to these countries and begun farming (African nations offering land for free to Indian farmers,” The Economic Times website, http://economictimes.indiatimes.com/news/economy/agriculture/African-nations-offering-land-for-free-to-Indian-farmers/articleshow/6293149.cms, accessed 28 January 2011). Close to 70 Indian companies are also in the process of entering the farming sector in the region (Indian companies get into commercial farming in Africa. 2011). A leading integrated tea company based in India acquired Uganda-based Rwenzori Tea Investments for US$25 million in December 2009. In recent times, Indian companies have also started investing in agri value-added products. An India-based business house leased a 50-acre model dairy farm in Uganda in 2006 (RJ Corp charts mega plans to venture into virgin Africa. 2011). An Indian company specializing in textiles recently opened a spinning mill in Burkina Faso (Indian business groups are investing heavily in Africa. 2011). Such investments are expected to generate local employment as well as create opportunities for local skill development. Agro-industry sector of India-Africa traction in agriculture is welcome and discussed in detail further.

‘Today, national development issues incorporate agriculture sector as prerequisite to country’s progress and prosperity in Africa. Indo-Africa is pursuing mutual cooperation under the theme of ‘Today’s Investment-Tomorrow’s Prosperity. The development and mutual partnership covers self-reliance schemes avoiding huge debt as a result of this brotherhood. Indo-Africa partnership policy persuades African willingness and mutual benefit to implement the common development partnership programmes in different parts of continent. African government’s national development Programme cannot function in isolation. Africa needs a mutual cooperation and development programme from outside world and Indian mutual economic brotherhood and political understanding kick out all western propaganda about India’s policy of New Colonialism in Africa. The idea of today’s investment will nourish a debt free Africa and strengthen economic development as tomorrow’s prosperity. African politics cannot ignore international relations to build up national development and this partnership is a way towards Today’s investment, Tomorrow’s Prosperity’ (Suresh Kumar.2008).

1. Agro-industry of Fish and Fish Farming Industry

India and Africa needs an effective approach to ensure food security, eradicating poverty, improve people's livelihood, subsistence agriculture, fisheries and other animal resources and work for self-reliant. Both may work for sustainable development of fisheries and animal resources with necessary support of scientific research for conservation of land and environment. Fish cultivation on ground as an alternate source of food may increase many folds depending upon its natural feeding (such as Carp Larvae). One reinvigorates that pond and river fish cultivation using these larvae will add nutrient in food production barring use of chemical and other chemical food nutrients on the one hand and safeguards environment biodiversity on the other hand.

India plays vital role in international as well as regional cooperation developing fisheries and other sea resources as an alternate source of food and maintains sea-diversity as part of environment conservatism. India as a regional partner is assisting Myanmar in the exercise of their delineation of their continental shelf. The Ministry of Earth Sciences (MoES) shares program on 'Oceanology & Geo-hydrates' under Integrated Programs (ILTP) with Russia (Annual Report: 139-40). Similarly, Indian National Centre for Ocean Information Services (INCOIS) is developing capability of processing the availability of fish stocks, ocean state, etc. for societal and economic benefits. It identifies the potential fishing zone that beneficial to fisherman increasing their profit. The government protects this sector from natural calamities and developed Early Warning System for Tsunami has been set up in Hyderabad, India. It may further coordinate with African coastal countries. India-Africa may share this technology averting natural killer Tsunami under mutual understanding and cooperation.

Africa and India may share their experiences and produce policy analysis, cooperation in water management, agro-infrastructure, capacity building and enhancing market opportunities for each other’s value added agriculture and fisheries products under global partnership, which will reinforce socio-economic transformation.

The water resources of Indian Ocean in Southern Africa, Red Sea in North-east Africa, Mediterranean Sea in North Africa and Atlantic Ocean in West Africa and lakes & rivers of different African countries provide vast potential in fish and fish farming investment and business linkages opportunities such as:

· Southern Africa produces about tons of marine fish annually. Kenya, Tanzania, Mozambique and South Africa have the potential to produce fisheries for the local population as well as for the global world.

· Kenya has only one tuna fish factory producing cooked frozen tuna loins for further processing in EU countries. Investment in premium fishes such as Nile Perch (Uganda), Tuna fish (Kenya, Djibouti and Eritrea) and value added fish products such as canned fish, fish sausages, fish soups, and fish fingers could be processed for regional as well as premium export markets.

· Similarly, the investment in low cost species such as tilapia and Happochromis (Uganda), King and Queen fish (Eritrea), etc. for the local and regional market and Aquaculture development of stock fish, farming of premium species such as eel and cage fish farming and other marine resources are potentially profitable ventures.

· The technology of deep sea fishing, prawn and trout farming are not available in African countries and there is vast unexploited potential investment in deep sea fishing logistics, including technical support. Fish processing opportunities exist in (filleting and fishmeal production) as well as fisheries-support infrastructure (refrigerated transport, cold storage, etc.).

· Local and regional cold distribution chain to minimize the loss of fish products and deterioration.

2. Livestock Agro-Industry

The livestock development (Cow, Goat, Sheep, Chicken, Ducks, Pig, etc) strategy focuses on establishing an efficient livestock disease control system based an cost recovery; achieving self-reliant in meat, milk, poultry and other livestock products. It promotes and develops industrial linkages for livestock products including dairy, leather and meat processing, encouraging the export of livestock and love stock products, and strengthening research in livestock breeding in order to upgrade the quality and productivity of the present livestock breeds. The business opportunities include:

· Local commercial dairy breeding and production of semen to reduce on the importation of heifers.

· Vaccine development and forge production.

· Animal feeds production and processing.

· Integrated beef production and feedlot finishing.

· Most hides and skins are processed up to the wet blue stage for export. There is big investment opportunities available in processing & production of finished leather, leather manufacture industries (shoe, bag, purse, valet, belt, jackets and other) and distribution chains (through retail shops) in different parts of countries in Africa.

· Game ranching.

· Animal breeding and establishment of modern abattoirs.

· Local and regional cold distribution chain to minimize the degradation of meat and meat products.

3. Dairy and dairy Product Sector

This sector develops, promotes and controls production, processing and marketing of milk and dairy products as well as the general facilitation and development of the Dairy industry. It has the potential of export-oriented processing of quality milk. There is a potential in investing in processing milk into powder for local markets and exports. There is untapped potential in goat milk processing and camel milk processing for Europe and Middle East countries. The opening of milk plants through Indian investments will provide the low cost/affordable technologies and equipment for small scale processing and opportunities for improvement in technology infrastructure such as packing, storage and refrigerator transportation. The investment opportunities in this sector are:

· Establishment of reliable collection centers in the major producing areas and transportation of milk to the processing plants.

· Establishment of more processing plants to cater for the excess production.

· Production of powdered milk for use in ice-cream manufacturing confectioneries and homes.

· Production of long life (UHT) milk supplying to the UN Peace Keeping Forces, people suffering from natural calamities and in other emergent situations.

· Processing of butter, cheese, butter oil, ice-cream and yogurt.

· Local commercial dairy breeding and production of Semen reduce in the importation of heifers.

· Local and regional cold distribution chain to minimize production loss and deterioration.

4. Agro-Industry of Organic Farming

Africa has ample land that needs to be developed for the agriculture purposes. Indian investors provide agriculture mechanization such as seed cum fertilizer drill facilitates seed saving, saving in fertilizer, enhancement in cropping intensity and increase in gross income and return to farmer in Africa. The private sector of India (Karturi and other Companies) has started the investment in agriculture sector and developing organic farming and other as part of agro-industry. The organic farming deals with the different sub-sectors such as:

A. Agro-Industry of Fruit and Vegetable

The investment opportunities (as per the physical condition of the region) in this sector are:

· There is huge investment opportunity on cracking, grinding, roasting and packaging cashew and other nuts.

· There is also considerable potential for the processing of cocoa and manufacturing the chocolate and confectionery products for regional market and export.

· Use of Indian technology and start production of Edible and other oils by using sunflower, rapeseed, cottonseed, sesame, coconut and corn seeds. West Africa is known for the production of palm oil and it is the right time to introduce the scientific technology that will facilitate the low cost production of oil.

· There is a high production of oil seeds in Eastern Africa and there is a potential for more production. Investors have the opportunity to set up the edible oil industries catering local as well as regional needs.

· There is high potential and production of varieties of fruits as mangoes, pineapples, oranges, passion fruits, bananas, and avocados to cater the supply at regional as well as export market. It opens the processing of fruits at local level and there is an open investment opportunity for processing of fruits for the production of juices, fruit jelly, fruit jams and other.

· Production and export of de-hydrated fruits.

· Investment in cold storage facilities at collecting points.

· Organic farming of fruits and vegetables.

· Packaging of vegetables and fruits for exports.

· Opportunity for local manufacturing of attractive packaging for fruits and vegetable.

· Irrigation schemes for commercial farm to ensure harvests throughout the year.

B. Agro-Industry of Floriculture

This agro-industry is a big source of export income in Africa. Indian investors are investing in this sector and are getting good responses from the local people in Africa. It persuades the Indian investors to produce the cereals using scientific technology for local consumption along with floriculture. The opportunities exist in this sector such as:

· North-Eastern Africa (Kenya, Ethiopia, Uganda and Tanzania) has seen phenomenal growth in the production and export of cut flowers. The export markets focuses on European Union countries such as Germany, Netherlands, United Kingdom, Sweden, Italy, Switzerland and France.

· The investment in pre-cooling and cold storage will facilitate exporters in maintaining the high standards of their produce for export as required by the market.

· Packaging of flowers for exports.

C. Agro-Industry of Sericulture

There is a huge export market too for silk cloth and garments. Sericulture and silk production have an enormous potential in Africa provided it is made available to rural people, especially women, and its marketing is organized independently. It can serve as an excellent mode for employment generation and augmentation of income. Indian investors will provide latest technological inputs to primary producers by evolving and establishing new systems of organizing production and marketing. Silkworms feed on mulberry leaves. Hence the rearing of silkworms involves cultivation of mulberry trees, which provide a regular supply of leaves. Worms are introduced through DFLs (Disease Free Laying, i.e. eggs) procured from a quality centre (called grainage).

The African farmers should promote bulk of mulberry cultivation along side their agriculture field. Even the small farmers of less than 4 acres land usually in clusters of 300-400 will initiate the production of sericulture. Investment in mechanization in silkworm rearing operations is needed to cut down on production costs. Small machines for such operations such as leaf chopping, harvesting and def-loosing of cocoons are necessary. Africa has very little knowledge on wild silkworm rearing technology. Indian investors will promote the training to the local people in this field. Investment opportunities that would also trigger increased production are mainly in:

· Cocoon post harvesting and processing equipments.

· Multi-end silk reeling machine.

· Spindle spinning machine.

· Cocoon boiling machine.

· Warping machine.

· Power and hand looms.

· Cocoon dryers.

· Cocoon and raw silk testing equipment.

· The Product development will initiate the development of beauty products, processing & packaging of mulberry green tea and powder and natural dyes technology.

5. Agro-Industry of Food and Beverages Sector

The agriculture system in Africa is based on the traditional method of farming that feeds the rural community only one square meal to the entire family. As a result, the rural population is migrating in search of employment to the urban centres and surviving. This initiative of production improvement needs agricultural tractors and combines machinery for the use of more arable land and improvement in production. The growth in agro-industry products will be an additional source of income for the agriculturalist in Africa. The food and beverage sector provides opportunities in:

· Value addition to a variety of agricultural produce locally available.

· Planting and processing of coffee, production in instant coffee particularly in Uganda, Kenya and Ethiopia.

· Breweries and distilleries of alcoholic beverages.

· Soft drink and packed fruit drinks manufacture.

· Commercial farming and processing of sugar, corn flakes, gram flakes, etc.

· Establishment of fast food restaurants of international chains/brands.

· Different Pickles manufacture for European, American & Middle East Market.

· Local and regional cold distribution chain to minimize the deterioration of products.

6. Agriculture Engineering

India produce agricultural tractors,  mould board plough, disc plough, sub-soiler as primary tillage, spring loaded tillers, harrow, leveller, bund former, scraper, rotary tiller as secondary tillage, back hoe with tractor, laser grader, graders, scrapers with tractors as earth moving equipments. Escorts, Sonalika, Eischer, HMT, International Tractors, Mahendra & Mahendra, etc. are the largest producers of Agricultural equipments in India. Along with it, India produce sowing machinery such as post hole digger, paddy planter, seed drill for cotton seed, seed cum fertilizer drill, potato planter and multi row vegetables planters, irrigation systems such as sprinkler systems, drip system, irrigation pumps like centrifugal pumps, stationary diesel engine driven centrifugal pumps, engine set, electric pumps and submersible pumps, sowing & harvesting machinery such as maize combine, sugar cane combine, mowers, paddy combine, reaper, wheat combine, fruits harvester, onion harvester, potato digger, cotton picker and post harvest machinery like bailer, tipping trailer, sugar cane grabber, trailer, thresher and maize Sheller (Improving Farm: emphasis mine). This agricultural mechanization will enhance the production as the land in Africa is naturally highly fertile. There are different agro-industries that may be promoted in Africa, which will give value addition for their products such as:

· Mechanization of rice production by use of rotivators, trans-planters and cultivation equipment.

· Farmer associations and private entrepreneurs will be encouraged to install Pass and Mobile rice mills.

· Investment opportunities exist in seed production, manufacture of sprayers and pesticides, veterinary services, construction of cold storage facilities and refrigerated transport for horticultural and other perishable products.

· Industrial units for manufacturing tractors.

· Industrial units for manufacturing pump-sets for irrigation.

· Industrial units for the manufacturing of agro-food products.

· Small Industrial units for Agro-chemicals (fertilizers and pesticides).

· Industrial units for manufacture of textile (Cotton fabrics, garment manufacturing, yarn).

Case Studies of Individual African countries (Agriculture Investment)

1. Botswana

India and Botswana agriculture, livestock and human resources development cooperation started in 1999. Indian seeds (Maize and Paddy rice) have been sent to this country for experimentation. A project for import of Indian Buffalos to this country has been set up. The farmer’s project has been finalized and since 29th October 1999 six farmers form Punjab have landed to this country in view of realizing this project. “The tender for the purchase of Indian tractors at large scale in under process.” The cotton from Burkina Faso exports to India. Today, many trainees from Burkina Faso are coming to India for training in computer education, diplomacy, telecommunications, etc. Botswana is looking forward to setting up units of production of commercial farming such as fruits, vegetables, Arabic gum and cotton.

Livestock occupies an important place in the economy of Burkina Faso in West Africa. The opportunity in this sector is the setting up of:

· Small industrial units for milk processing (dairy plants) breweries.

· Small industrial units for production of animal feeds.

· Small industrial units of veterinary pharmaceutical products.

· Meat processing.

· Small units for leather.

· Cattle rearing-ranching and poultry.

2. Burkina Faso

It is a member of the West African Economic and Monetary Union (WAEMU) and share a common currency i.e. CFA franc and have set up a full custom union since 2000. WAEMU comprises Burkina Faso, Benin, Cote d ’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo having same custom duty tariff. The volume of Indo-Burkina Faso trade has increased by 30% in 2002-03. India imports 66% of cotton yarn produced by FILSAH, one of the major producers in the country. Burkina Faso exports cotton, animal skins, and leather and cashew nuts to India and imports Agro-machinery (tractors and farm implements), Rice, small and medium scale industries (e.g. oil processing) from India.

Burkina Faso guarantees the foreign investors such as:

· Right of full business awareness for foreign investors.

· Right to acquire real estate, land, forested land, industrial areas in addition to concession from government.

· Right to transfer capital and profits of any investor.

· The advantages of investing in this country are:

· A possibility of Joint Venture with Burkina Faso business community.

· Low cost of labour.

· Good infrastructure (telecommunication, roads, railways and airport) and services.

· Strategic position in the heart of West Africa.

Burkina Faso is second largest producer of cotton in West Africa and ranks third in entire Africa. Agriculture plays a key role in this country’s economy, it accounts for over 40% of the country’s GDP, 80% of export revenue and 85% of employment.” 11 The government gives priority in twelve fields for investment in cotton, cereals, fruits & vegetables, oil seeds, skin and leather, meat, milk, chemical products, fertilizers and pesticides. The agriculture investment exists in the following sectors:

· Industrial units of manufacturing tractors.

· Industrial units of manufacturing pump sets for irrigation.

· Industrial units of manufacturing agro-food products.

· Small Industrial units for agro-chemicals (fertilizers and pesticides).

· Industrial units of manufacturing textiles (Cotton fabrics, garment production and yarn).

· Setting up commercial farming units (fruit, vegetables, Arabic gum and cotton).

Live Stock Production in Burkina Faso

It is having more than 20 million livestock comprising bovines, aprons, ovins, pigs, mules and poultry. The production of fish is around 10,000 tones per year mainly for the local market.

· Small Industrial units for milk processing (dairy plants).

· Small Industrial units for production of animal fats.

· Small Industrial units for veterinary pharmaceutical production.

· Meat processing.

· Small units for leather

· Cattle rearing-ranching and poultry.

3. Ethiopia

The country has 111 million hectare of land out of which 74 million is suitable for agriculture. However due to underdevelopment only 15 million hectare is under cultivation. The government offers about 3 million hectare (5% of the available land) to local and foreign investors. The prominent investor ‘Sheikh Mohamad Al-Amoudi currently leases 10,000 hectares for a pilot project for rice production in Gambella Regional State. Under the agreement his company will be allowed to export no more than 60% of its production and 40% will be for local consumption. He is currently looking to increase the investment to US$450 million and expand the area for cultivation’ (Development or Exploitation.2011:1-2). The government of Ethiopia has welcomed the recommendation of the author. “It is estimated that the use of 15 percent of the total land in Africa is sufficient for the domestic consumption including having food stock for the emergency. Indian investors are buying land in Africa for agricultural purposes. 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 recommendation to put this ratio is that most of the African states do not have the advance cold storage facility to keep the food grains presently on the one hand and the lower ratio is sufficient to cater population of a country on the other hand” (Dr. Suresh Kumar. 2010). Similarly, Karturi, a Bengaluru-based company of India set up greenhouses on 25 acres of land in Ethiopia in 2004 for rose cultivation. The company was able to utilize its African operations strategically to improve the export of roses to Europe and has now emerged as one of the largest producers of cut roses in the world. The company is now exploring the option of growing crops such as maize and vegetable crops in the continent. The INR 5.5-billion company has 672 acres of land under floriculture in Africa, along with a land bank of 311,000 hectares in Ethiopia.

4. Ghana

Ghana is searching for an investment location and offer opportunities in:

· Agriculture (Cassava, Cotton, Sugarcane, Soya Beans, Oil Palm, Pineapples, etc.)

· Agro-processing (Cocoa, Fruits, Vegetables, etc.)

· General Infrastructure (Agricultural and Industrial Estates, Roads, Railways and Ports).

· Fisheries.

The government gives incentives in tax rebates for manufacturing in certain locations, tax holders, ranging form 5 to 10 years depending on sectors, custom import duty exemption for plant machinery, equipment and parts thereof and double taxation agreements (Dr. Suresh Kumar.2008).

5. Kenya

Agriculture is the mainstay of the economy, providing livelihood to approximately 75 per cent of the population.  There is considerable scope for diversification and expansion of the agricultural sector through accelerated food crop production and increase of non-traditional exports.  There are also opportunities for improvement in technological infrastructure such as packaging, storage, and transportation. Intensified irrigation and additional value added processing are marketable areas for investments. Opportunities exist in production and export of products such as cut-flowers, French beans, pineapples, mangoes and other fruits, cereals, leather and leather products, canned beef, and honey farm machinery and other products.

The vision for agriculture sector is to be innovative, commercially oriented and modern, offering the following investment opportunities in Sugarcane development, Value Addition and Marketing infrastructure. This will involve the following wholesale projects; two wholesale markets for fresh produce in Nairobi, a wholesale market in Nakuru and a wholesale market in Mombasa. Along with it, the Livestock production is one of the major activities in the sector like Dairy industry and Hides, Skins and Leather industries. The fisheries sector plays an important role in the national economy contributing 0.5% to GDP in 2006. The areas for Private Sector Investment are value addition in fisheries products, Certified fish seed breeding facilities to avail quality seed to fish farmers, Investment in Tropical Aquaria parks for local and overseas tourism, Fish leather industry and Cooling plants in major landing bays of Mbita, Sindo, Sori, Sio port, Usage and Port Victoria. The water sector offers good investment opportunities in Water Storage and Drilling: Capacity Building of National Water Conservation and Pipeline Corporation and Mzima II Pipeline Project (Kenya.2011. A Hub for Investment:1-4).

Kenya has recently seen phenomenal growth in the production and export of cut flowers. Its ideal tropical and temperate climatic conditions make it favorable for flower production. The major flower varieties grown and exported from Kenya are roses, carnations, statice, cutfoliage, carthhamus, solidaster/solidago, chrysanthemus, arabicum, trelizia, rudbeckia, gypsophilia, lilies, molucella, erynngium and tuberoses.

Some cut flowers are also sold locally, mainly in the urban centres of Nairobi and Mombasa by street vendors and floriculture shops in shopping centres. Main export markets for cut flowers from Kenya is the European Union, in particular Germany, Netherlands, United Kingdom, Sweden, Italy, Switzerland and France. Along with it, the investment opportunities in the Cashew nut production and processing for exports in Kilifi, Fruit production & processing in Malindi, Sugarcane production in Ramisi area, Bixa production and processing for food pigment and colouring, Gum Arabic and gum resins development programmes, Fish processing Plants and other Sea food for export and Fertilizer production (Kenya in the Front Line. 2010:26).

6. Togo

Le Parc des Expositions “TOGO 2000” of Lome will host the 9th International Trade Fair of Lome from 25th November to 12 December 2011 focuses on promotion of trade and services of all sectors of economic activities of countries in the sub-region as well as those of the other continents and contacts between professionals for the development of sub-regional and intercontinental commercial activities. This fair of Lome is opened to economic operators (manufacturers, industrialists, traders, businessmen /women and service providers) from Togo, Africa, Europe, Asia and America.

7. Mauritius

The agricultural sector in Mauritius is being re-engineered to cater for the arising needs of the global food security crisis with an increased diversification of agricultural production backed by modern techniques and technologies. Investment opportunities in the sector can be captured in advanced agricultural technology including precision farming, hydroponic cultivation, green and organic farming among others. Furthermore, the transformation of the sugar industry in the sugarcane clusters present opportunities for the production of high value-added sugar, by products and energy.

Seafood and Aquaculture Based on a current world per capita consumption of 16 kg., the global seafood market is estimated at USD 100 billion per year. Mauritius has an exclusive economic zone of 1.9 million sq. km and is set to emerge as a leading seafood hub with seafood export accounting for 16.1% of total exports in 2009. Mauritius also offers the opportunity for sustainable fish farming activities in its lagoon. Furthermore local companies are also involved in fish transshipment, seafood processing activities and ancillary services (Mauritius.2011:23).

8. Mozambique

The Mozambican production and its presentation on global markets require a new approach in the packaging sector, to create conditions for the country to compete in an international market, where rules are constantly changing and consumer demands rise continuously. So far, Mozambique has a poorly developed packaging industry which is largely oriented towards the satisfaction of basic needs for the fabrication of domestic consumer goods and a few export products. The MOZNEGOCIOS-International Packaging and Packaging Equipment Trade Fair 2-10 June 2011 is a public event with international scope that involves producers, suppliers and consumers of the packaging industry from Mozambique and other countries. In this second edition, the MOZNEGOCIOS fair will bring together companies of the packaging sector and agro-processing enterprises (IPEME.2011:1-4).

The general purpose of investment refers to the ‘promotion and enhancement of packaging sector in Mozambique and improves the quality and quantity of products offered by Micro, Small and Medium Enterprises (MSMEs). The specific objectives of investment highlights are:

· Identify national as well as foreign producers and distributors of packaging equipment;

· Identify national suppliers of packaging, design services, printing and package recycling;

· Identify consumers and potential consumers of national packaging;

· Attract domestic and foreign investment in the sectors of agro-processing and packaging

· Improve the provision of services related to agro-processing and packaging

· Establish a connection between the producing entrepreneurs, suppliers, distributors and consumers (Micro, Small and Medium Enterprises) of packaging (IPEME.2011:1-4).

The specific objectives of investment in Mozambique requires:

· Companies that produce equipment/machinery for packaging

· Companies that produce and distribute packaging

· Companies that design labels and the related packaging

· Companies that use recycled products resulting from packaging

· MSME’s that wish to improve and/or expand their businesses

· Scholars that wish to assess market trends of agro-processing equipment and packaging

· Agricultural associations

· Printing companies that produce labels

· Companies linked to the agricultural or agro-processing sector.

The wide diversity of soil types and climatic conditions, access to over 60 rivers and 36 million hectares of arable land greatly enhance Mozambique’s potential as an agricultural exporter. The main agricultural exports include cashew nuts, cotton, sugarcane, a variety of fruits and vegetables and tobacco, but virtually any crop can grown easily in Mozambique – and harvesting can occur months before other countries. The rich waters in the Indian Ocean offer a variety of seafood products from world famous tiger prawns to crayfish to langoustine – as well as a variety of fish such as tuna, grouper and cod. Mozambique also has 19 million hectares of productive woodland, rich in tropical hardwood and to a lesser extent eucalyptus and pine. The natural potential of the sector offers a wide range of opportunities for timber, construction materials, furniture, wood products and pulp (Institute of Export Promotion Mozambique. 2011:7).

Mozambique offers some of the best shipping ports in Southern Africa, serving as a link to the sea for its landlocked neighbours and the rest of the world. The three main ports in Mozambique are in Maputo, Beira and Nacala. The port at Maputo is the hub the surrounding fishing and agricultural industries serving South Africa, Swaziland and Zimbabwe. The ports in Beira and Nacala serve Malawi, Zambia and Zimbabwe. Beira is linked to by road and rail to the African hinterland. The recently modernized ports in Mozambique enable them to handle millions of tons of cargo arriving from and departing to distant international destinations (Institute of Export Promotion Mozambique. 2011:8).

9. Nigeria

In 2009, the Federal Government introduced the National Food Security Programme in Nigeria to focus on both upstream and downstream activities such as production, storage, processing and the marketing of crops, livestock and fisheries (Programme on Food Processing, Storage, Marketing Out. 2009).

10. Uganda

Uganda is east Africa’s food basket. ‘A KES1-billion food processing plant was commissioned at Makerere University’s Faculty of Food Science and Technology in Uganda in 2009. The fruit and vegetable processing plant, scheduled to operate on a pilot basis, will help the department produce fruit juice and other foodstuffs for sale as well as train students to become entrepreneurs and agro-processors’ (Food Processing Plant Launched. 2009). Similarly, Britania Allied Industries, a consortium of food processing firms, plans to invest KES11 billion for the construction of a fruit juice-processing plant in Namanve, Uganda.

Possible investment opportunities are in production of instant coffee, extraction of vegetable and essential oils, packaging of beans, alcoholic beverages, soft drink manufacture, processing of sugar and fast food restaurants. Uganda needs US $ 15-30 million investment requirement to expand rose industry depending on wooden or metallic infrastructure. All the roses’ projects send soil samples to Holland for analysis. The cost of the services (US $ 200-600/ha) justifies the establishment of a soil analysis laboratory and services in Uganda. Greenhouse plastics constitute 6% of the investment requirement and need to be replaced every 2-3 years, providing commercial opportunities for local manufacturers. Fertilizers, herbicides, pesticides currently imported.

Ugandan flowers have managed to mark their presence in the world for a, claiming a fifth position in Africa’s largest exporter of cut flowers. Indian investor may look forward for mutual trade.

Uganda is mainly an agricultural country with over 80% of the population relying on agriculture for its livelihood. The linkage potential in the plantation and agro-industry includes:

· Outsourcing the field operations including seed-bed preparation.

· Supply of produce to processors.

· Maintenance of machinery.

The most important market for Uganda’s fruits and vegetables is European Union. In 2005, EU imports of fresh vegetables amounted to Euro 9.8 billion and 10.5 million tones. Uganda is capable of producing most of the tropical and sub-tropical, or even temperate fruits and possible investment and business linkage opportunities. Uganda livestock production contributes 17% and 9% to agriculture sector.

Several firms in Uganda are involved in production of fish fillets for export, the annual quota of 60,000 metric tons o processed fish, has never been met. In addition, the local market is expanding. Entry into this sub-sector is viable and there are possibilities of joint ventures with existing fish processing firms. Dry/smoked fish is mainly for the domestic market but also for exports into the regional market.

11. Senegal

Fishing is a significant sector of the economy, but agriculture is Senegal’s principal resource accounting for almost 50% of the country’s total exports. Peanuts are the main commodity produced in the country, but attempts have been made to diversify into others, particularly cotton, the second largest export commodity, millet, sugar cane, fruit and vegetables. Phosphate is the most important mineral resource, although there are also significant iron ore deposits as well as oil. India facilitated Senegal agriculture sector on lines of credit such as:

· ‘15 million USD for acquisition of agricultural material and the creation of rural enterprises.

· 27 million USD for irrigation projects with a view to achieve rice self sufficiency.

Agriculture sector comprises of 70% of Senegalese population is central to the country’s development. India put at the disposal of 510 tractors, equipment for tilling, carts, drilling machines, pumps, trucks and maize processing and enriching equipment under Indo-Senegalese cooperation. Senegal government and Indian Farmers Fertilizer Co-operative Limited (IFFCO) signed an agreement of about $240 million. There are export opportunities in the agri-business sector, with the AGOA visa in:

· Floriculture

· Fruit Cultivation

· Market Gardening

· Thousands of hectares of Cashew nut plantation

· Diversification of the industrial processing of groundnut.

· Fish Cultivation

· Support to the development of horticultural exports.

· Improvement of the condition of market operation.

· Support to agri-business producers and operators for a better adaptation of products to the market.

· Development of private irrigation and land-related activities’ (Dr. Suresh Kumar.2008).

Senegal is dependent on import rice that reached 400,000 tones of CFA Francs 118 billion for 2003. As an alternative, the Senegal government offers investment opportunities in this sector particularly in Senegal River Valley region. Senegal has become a leading exporter of cherry tomatoes, fine green beans, basil, green asparagus, onions, potatoes and aborigines (Dr. Suresh Kumar.2008).

.

12. Zimbabwe

The agriculture sector remains under-capitalized with insufficient inputs and infrastructure. The Capitalization of commercial farming enterprises includes meat processing, poultry and fish farming, juice extraction, horticulture, floriculture and cotton-processing Infrastructure development and refurbishment, as well as investment in value-adding processing of agricultural equipment (Zimbabwe Investment. 2010-15).

13. Zanzibar

Zanzibar, part of United Republic of Tanzania offers investment opportunities in:

Agriculture

· Horticulture and Floriculture.

· Agro-processing.

· Fruit processing and Canning.

Fisheries

There is a potential for development of various types of fish, shrimps, lobsters, seaweed and other marine resources. Investors are free to choose suitable areas for:

· Deep sea fishing.

· Fish Farming

· Processing and Canning

Zanzibar is known as the Spice Islands. The investment opportunities in spices include:

· Cloves,

· Cinnamon, Cardamom, nutmeg, black pepper, chilies, etc.

Conclusion

India has launched special scholarships for African students in the field of agriculture to provide support to the Nyerere Programme of the AU. Under the program, ‘25 seats are offered to students for pursuing a doctoral degree with the GoI. The program, which provides each student with a stipend of INR15,000 per month, offers 50 students the opportunity to pursue Masters’ degree programs in India, with a stipend of INR12,000 per month from the Government of India’ (EXIM BANK.2011: 19).

India has had a long history of ties with Africa and played its role as Non-aligned leader in the liberation of African countries. The Delhi Declaration 2008 has provided an alternative to African countries either to choose the existing partners (European and China) or work as partner with India. India-Africa needs to build their capacity to use them as functional leaders, enjoy more responsibility and produce scientific educated younger and future generations. This partnership will help to strengthen African countries development and their collaboration with the Indian partner works for Self-reliant development.


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Oil and Gas. 2005. IBEF. (CII).

Resolution.2006. Resolution of the Abuja Food Security Summit (FS/Res (1)). Summit on Food Security in Africa. December 4-7, 2006, Abuja, Nigeria. http://www.africanunion.org/root/au/conferences/past/2006December/REA/summit/doc/Abuja Res Final tracked.doc

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Programme on Food Processing, Storage, Marketing Out. All Africa. 16 March 2009. via Dow Jones Factiva, © 2009 All Africa.

RJ Corp charts mega plans to venture into virgin Africa. The Economic Times. http://economictimes.indiatimes.com/news/news-by-industry/cons-products/food/rj-corp-charts-mega-plans-to-venture-into-virgin-africa/articleshow/5414639.cms, accessed 28 January 2011.

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Last Updated on Friday, 14 March 2014 08:13
 
India-Africa Cotton Cooperation PDF Print E-mail
Written by Administrator   
Tuesday, 22 March 2011 02:38

India-Africa Cooperation: The Cotton Factor

Dr. Suresh Kumar

Africa Quarterly. Vol. 50. No.3. August-October 2010

(Published in January 2011)

This paper was presented in the International Conference on India-Africa Cooperation along the Cotton Vlaue Chain. 14-27 November 2010. Leela Kemipinski Hotel. Mumbai and revised it for publication.

Introduction

With Africa emerging as a global business destination, leading world powers are eyeing the continent for its natural resources, which includes cotton, one of the continent’s key cash crops. The world’s top Cotton Producers are China, USA, India, Pakistan, Zone Central Africa Franc (CFA), Uzbekistan, Brazil, Turkey, Australia and European Union and top Cotton Exporters in the world are USA, Zone CFA, Uzbekistan, Australia, Brazil, European Union, Syria and China (Source: ICAC. 2004). The three groups of exporters such as USA, Central Asia and Francophone Africa account for more than two-thirds of global cotton exports. Sub-Saharan Africa’s (SSA) share in world cotton trade has increased from 7 percent in 1960 to 15 percent in 2006. Cotton has not, however, participated in the commodity price boom that began in mid-2004, despite record consumption of cotton worldwide.

Cotton is a major source of foreign exchange earnings in more than 15 countries across all regions of Sub-Saharan African (SSA) countries and a crucial source of cash income for millions of rural people in these countries. The major nine countries are Benin, Burkina Faso, Cameroon & Mali in West and Central Africa and Mozambique, Tanzania, Uganda, Zambia & Zimbabwe in Eastern and Southern Africa. The crop is therefore critical in the fight against rural poverty. The World Bank and other development institutions are currently dominating many cotton exporting countries of SSA through projects supporting investment, as well as policy and institutional reforms. These reform programs are respecting World Trade Organization (WTO) guidelines and generally entail redefining the role of the state, facilitating greater involvement of the private sector and farmer organizations, ensuring greater competition in input and output markets, improving productivity through R&D, extension, and technology dissemination, and seeking value addition through market development and processing of cotton lint and by-products.

In recent years, world cotton prices have declined significantly. Small-scale cotton farmers in West and Central Africa (WCA), whose livelihoods depend on cotton, have borne the brunt of this decline. The main actors causing the drop in prices are the cotton production and export policies of the United States (US) and the European Union (EU). Along with it, China, as the world's leading major cotton producer, can have a strong influence on world cotton prices. China has committed to reduce subsidies to its cotton sector in the context of its WTO accession. These policies sit uncomfortably with the letter and spirit of WTO rules, as recently confirmed by the WTO Dispute Settlement Body in relation to some US cotton subsidies. It is less well known that these policies are also contrary to the letter and spirit of international human rights law. This Policy Brief provides an overview of the impact of US and EU cotton production and export policies on the lives of farmers in West and Central African countries.

Also, the changes in processing (i.e. spinning) technology have driven increasing demand for quality in cotton lint, with a parallel sharp increase in the penalty for cotton contaminated with non-organic matter that put negative impact on African agricultural labourers. The Intrinsic characteristics of African cotton typically place it above the A Index in quality; the fact that nearly all African cotton is hand picked helps preserve these intrinsic qualities. However, an inability to control contamination has led to a situation where hand-picked African cotton now trades at a discount to machine-picked cotton. Reducing contamination in African cottons could bring price premiums as high as US$0.10 per pound over the Cotlook A Index or about 20 percent at typical world price levels. Capturing this premium requires effective coordination throughout the local supply chain, and the ability to achieve such coordination depends crucially on sector structure and governance.

Colonial Parallel

The historical contradictions and irony of cotton/textile trade during the colonial times were cogently interpreted by Mahatma Gandhi. In his analysis, Gandhi identifies the whole process of the trade, which, in the ultimate analysis, hardly ever benefited the producer- the poor Indian cotton farmer. Cotton, picked by India labourers/farmer s at around seven cents a day, was shipped to London on board British vessels. The freight and the arbitrage thereof, accrued to British commercial liners. The cotton would be turned into cloth in Lancashire by English workers who were paid better than their Indian counterparts. In tandem, the steel companies of England profited by building the factories and machines required to produce cloth. The wages and the profits were thus spent in England. This is the policy of continuation of colonial policies. The finished product is sent back to India at European shipping rates, once again on British ships. The captains, officers, sailors of these ships, whose wages must be paid, are English. The only Indians who profit are a few lascars who do the dirty work on the boats for a few cents a day. The finished product is sent back to India at European shipping rates, once again on British ships. The captains, officers, sailors of these ships, whose wages must be paid, are English. The only Indians who profit are a few lascars who do the dirty work on the boats for a few cents a day (Fisher 1932: 154–156).

Cut back to the present aspects of global trade often assume neo-colonial characteristics. If the largely illiterate and poor African farmers were to use machines to pick cotton to help avoid contamination, expect a vicious circle to kick in, with the additional costs thus incurred risking subsistence and food security.

The right to food is also protected by a number of international and regional human rights treaties, including the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), and the Convention on the Elimination of Racial Discrimination (CERD). A detailed guide to what the right to food requires of States, non-State actors and the international community is discussed in the General Comment on the Right to Food adopted by the UN Committee on Economic, Social and Cultural Rights in 1999.

Criticizing it, Delhi Declaration 2008 of Indo-Africa Summit added, “Agriculture remains the key to the conclusion of this round. We are convinced that any acceptable agreement must adequately protect the livelihood, food security and rural development concerns of developing countries. Any outcome must also bring about significant and effective reductions in trade-distorting domestic support and subsidies provided by the developed countries. There are equally important issues also to be addressed on Non-Agricultural Market Access (NAMA) services and rules. We are convinced that the process to be adopted to reach convergence in the WTO negotiations requires focus on content and not artificial timelines. The promise of a development round must be fully realized. There is also need for a closer look at the Intellectual Property Rights (IPR) regime to ensure cost-effective transfer of appropriate and advanced clean technologies to developing countries” (Delhi Declaration. 2008).

The Delhi Declaration affirm that cooperation between Africa and India has been, from its inception, a useful example of South-South cooperation. It has been our endeavour at this Summit to devise ways and means of enhancing this South-South partnership, taking into account the new capabilities that have emerged in Africa and India. Bearing this in mind, we have drawn up and adopted a Framework for Cooperation that would provide the avenue for further and dynamic development of the Africa-India partnership. Delhi Declaration have agreed that Africa and India will strengthen not only their bilateral linkages, but that India will also progressively strengthen its partnership with the African Union and the Regional Economic Communities of Africa. The Indo-African Chamber of Commerce & Industries (IACCI) initiative of utilizing cotton & textile opportunities likely to open up more bargaining power to Africa choosing either existing colonial/traditional powers or Indian investors. This cotton partnership will widen India’s genuine responsibilities of development towards Africa that will save the continent from the existing hobnoxious policies of World Bank and multinational textile companies. This paper will also highlight the efforts of India and African countries to implement their international human right commitments are undermined by these policies and recommends that human rights should be used more proactively by developing countries and human rights and development advocates as part of advocacy and reform strategies. This initiative of India and Africa as part of south-south cooperation will highlight the discriminated policies of US and EU cotton production supported by China policy makers and their impact on livelihoods and human rights in WCA.

Historical Exploitation of Cotton Crop

The exploitation of cotton as a cash crop began with the European industrial revolution started in 1738 and beginning of slavery system in Africa. This revolution brought changes about mechanical inventions in the 18th and early 19th century in England. As a result, the slaves in Africa were frequently engaged in cultivating cotton for the weaving industries and women slaves were useful as spinners. The colonial era inaugurated several trends of agricultural innovation, especially involving industrial crops, primarily oil crops like cotton. During the American Civil War, American cotton exports slumped due to a Union blockade on Southern ports because of a strategic decision by the Confederate government to cut exports, hoping to force Britain to recognize the Confederacy or enter the war, prompting the main purchasers of cotton, Britain and France to turn to Egyptian cotton. British and French traders invested heavily in cotton plantations and the Egyptian government of Viceroy Isma’il took out substantial loans from European bankers and stock exchanges. After the American Civil War ended in 1865, British and French traders abandoned Egyptian cotton and returned to cheap American exports, sending Egypt into a deficit spiral that led to the country declaring bankruptcy in 1876, a key factor behind Egypt's annexation by the British Empire in 1882.

During the years of post colonial Africa (1950-1990), cultivation and trading of cotton came to be governed by the World Bank supported by Structural Adjustment programme (SAP) under multinational companies. It integrated all critical services (extension, input supply, credit and to some extent infrastructure) that helped further exploit cotton farming to the advantage of the big companies.

Contemporary World Bank Model and Cotton Crop

The World Bank proposes a typology of cotton sectors in SSA based (see Table-1 & 2)on the structure of the market for seed cotton and of the regulatory framework in which the multinational firms operate. This proposal favours the open market concept ignoring the human rights values that support WTO guidelines. This model is has been criticized by the cotton producing African countries and, not surprisingly, has rarely found with medium-scale cotton farmers.

Current Challenges before Cotton Crop

The story of cotton in Africa is a contrasted one. The performance of SSA exporters has been remarkable at a time of globalization of markets and its share of cotton trade rose by 30 percent. But, the number of cotton sectors in Western Africa is facing severe financial crises and are anxious about their survival. The stagnating productivity and rising costs began to generate recurrent financial crises for many cotton companies. The farmers have borrowed from their cotton fertilizer supplier for years and used these over-extra quantities to enhance their food crop production. Consequently, in order to compensate for any shortfall in their expected cotton production these same farmers bring additional and commonly more marginal land under cotton cultivation. Such practices not only enhance the susceptibility of the already marginal lands to erosion, but also reduce the effectiveness of the fertilizer used on cotton. The World Bank model may have become a victim of its own success as the cotton sector’s huge size in national economies led to political corruption. The cotton companies failed to put in place the management tools required for such large enterprises and governments failed to exert their responsibilities as main shareholders.

The major challenges with the coming of market economy are mentioned here such as:

1.

1. The market economy in order to bring flexibility and reduce financial risks, most WCA countries have reformed their pricing systems with a two-tier payment linked to world prices: a base price negotiated at the beginning of the cropping season and a price complement calculated on the actual value of lint sales to be paid at the end of the season. But the issue of subsidization in the western countries and USA and the regulations of WTO create discrimination in the fixation of prices.

2. The liberal market reform structures led to the collapse of input and extension systems (particularly in Tanzania and Uganda). African countries eliminated competition in the output market to facilitate input supply and extension assistance by ginners and has maintained a vigorously competitive output market and used innovative approaches (such as the passbook system) to provide some minimal level of inputs to farmers. Along with it, Africa has performed much better on input provision and cotton quality (in Zambia and Zimbabwe). However, each has faced substantial structural instability that has threatened input credit supply. This has been most pronounced for e.g. in Zimbabwe since 2003, with the dramatic increase in the number of seed cotton buyers and a similar phenomenon occurred in Zambia in the late 1990s and is now recurring.

3. Two new technologies may potentially address the needs of resource-constrained cotton growers in Africa through (i) genetically modified (Bt) cotton and (ii) low-volume herbicides. Bt cotton has arguably been the major source of yield gains and cost reductions in rain fed cotton in India and China over the past five years. While the technical, organizational and public policy challenges to introduction of Br cotton are real, such varieties may introduce with the consensus of governments in Africa.

4. The higher proportion of cotton producing households is found in the higher producing groups in WCA than in ESA. Value added is calculated using two different definitions of non-labor production costs. In the first case, input costs are deducted from the gross value of seed cotton production. In the second case, costs of animal traction and motorized services are also deducted, although the latter are extremely rare. The most appropriate definition can be debated. The argument for deducting animal traction costs from value added is that they include rental or amortization of equipment, plus veterinary and feeding costs for oxen. These intermediate inputs account for around 80 percent of the estimated animal traction costs in WCA sectors. The argument for not deducting animal traction costs is that oxen (and indeed equipment) are assets that farm households have accumulated in large part through their engagement with cotton production. Deducting animal traction costs would have the perverse effect of lowering the estimates of the value added generated by WCA sectors, because these sectors have proceeded further with animal traction than ESA – when this progress owed much to cotton. This difference reflects investments made over the years promoting animal traction and use of fertilizer. The greater use of animal traction for both ploughing and weeding, labor use is lower in WCA than in ESA. Meanwhile, weighted average returns to both family labor and to all labor are higher in WCA than in ESA. This finding holds true even if we use “break even” prices in place of the unsustainable producer prices paid in the WCA region in recent years. Zimbabwe is the best performer in ESA from a farmer’s perspective. Although competitive sectors within ESA have outperformed more coordinated ones on seed cotton pricing, from a farmer’s perspective they have not done so such to an extent as to outweigh their disadvantages in terms of service provision.

5. Ginning costs are sharply lower in market based systems (Zambia, Zimbabwe, Tanzania) than in monopoly or hybrid systems (WCA, Mozambique, and Uganda). Notably, ginning costs in Mozambique and Uganda are comparable to WCA only because these two countries operate at about 20% of capacity. Total net cost from farm-gate to Free on Truck (FOT) are also lower in market based systems, be they competitive or concentrated, due to lower ginning costs, lower overhead, lower financial costs, and higher sales value of seeds. The WCA monopolies thus perform especially poorly in terms of company efficiency.Value added at the ginnery stage can be estimated by subtracting all non-labor and non-tax costs for purchase and collection of seed cotton, and for processing and marketing of lint cotton from the total FOT value of lint and seeds. The two value added figures are then summed and the result is converted to per capita figures by multiplying by production and dividing by total country population

6. Due to these high costs, and to only average performance on quality, the WCA sectors are also the least competitive, either barely breaking even (Cameroon) or generating large deficits (Mali and Burkina Faso). All the ESA sectors appear to be highly competitive in world markets. In Mozambique, however, a key reason for this result is the exceptionally low prices paid to farmers.

Cotton is a major source of foreign exchange earnings in more than 15 countries across the continent and is a crucial source of cash income for millions of rural people. Despite that, the issue of food security has become more prominent and as a result, farmers transferred some of the technology of cotton-growing to cereal-growing. These developments have worked simultaneously to expand the area under cultivation and to eliminate fallowing. This, in turn, it has placed increasing pressure on spontaneous vegetation. As a result, the continuing use of fertilizer on the same fields-an increasingly common practice in the absence of fallowing land-increases soil acidity and depletes the soil of organic matter. This is the principal reason why yields continue to stagnate and in some cases decline in the older cotton regions throughout west and Central Africa. In addition, the availability of fertilizer engenders further environmental degradation that tends to be acknowledged usually by only those working at the grassroots. Following suggestions needs to introduce dealing with these challenges such as:

1. Achieving greater value through improved quality, marketing, and valorization of by-products.

2. Bridging performance and competitiveness gaps through farm-level productivity and ginning efficiency, and

3. Improving the sector’s sustainability through institutional development and capacity-building of stakeholders, as well as strengthening of governance structures and management systems.

4. The small countries are having only one cotton company and one farmer organization (such as Cameroon), there is a need to create an Inter-professional committee involving common farmers in the decision making been deemed necessary to achieve the supply chain and formulate high degree of cooperation in the decision making process on all sector issues. The case of Zambia where kwacha appreciated rapidly (but temporarily) prior to the 2006 election, limiting the prices that companies could pay for seed cotton. This, however, occurred at a time when farmers were already dissatisfied with prices, compounding their sense of dissatisfaction and making them willing to switch allegiance to new players.

5. There has been an intermittent debate about a new regulatory framework for the cotton sector when the cotton price side selling in 1997 (in Zambia). The major points of contention have been enforcement of contracts and prompt resolution of disputes when they occur. There have been suggestions of establishing fast track courts to for this purpose, and of amending the Agricultural Credits Act. However, the main stakeholder focus has been on ensuring passage of a revised Cotton Act keeping the market liberalization in mind.

6. Cotton ginning is not by nature a heavy industry. Hence there are numerous examples of farmers grouped in associations, as well as farm-based agribusinesses that are engaged in cotton production and ginning is seen in Africa such as SICOSA in Cote d’Ivoire, the ginning company established by a cotton farmers union (URECOS-CI) at the end of the 1990s. In other cases, ginning is a service provided on a fee basis (toll ginning) to farmers, who retain ownership of the final products (lint and seeds).

7. The organization of cotton sectors in Africa faces specific challenges due to the combination of two factors: 1) the high input intensity of cotton production, and 2) the weakness of markets for inputs and arguably even more important, given the lack of capital of most African smallholder households seasonal finance in Africa. As long as the seasonal finance constraint remains, the issue of the optimal form of cotton sector organization in Africa will continue to be a complicated one and convergence with forms of cotton sector organization observed in other parts of the world will remain partial.

8. Poulton et.al. (2004) identified four main challenges facing smallholder-based African cotton sectors such as: • Provision of input credit to producers, • Maintenance of quality control, • Maintenance of a high quality research system and effective extension of resulting research knowledge and products and • Giving an attractive seed cotton price.

9. These suggestions will work for SSA governments and stakeholders to settle the euro/$ exchange rate and slow progress in reducing market distortions due to OECD subsidies.

 

WTO Debate and Indo-Africa (South-South Cooperation)

In recent years, world cotton prices have declined significantly. Small-scale cotton farmers in West and Central Africa, whose livelihoods depend on cotton, have borne the brunt of this decline. The main actors causing the drop in prices are the cotton production and export policies of the United States (US) and the European Union (EU). These policies of WTO as recently confirmed by the WTO Dispute Settlement Body in relation to some US cotton subsidies. It is less well known that these policies are also contrary to the letter and spirit of international human rights law. This Policy Brief provides an overview of the impact of US and EU cotton production and export policies on the lives of farmers in West and Central African countries. India and Africa under South-South Cooperation put their efforts to implement their international human rights commitments are undermined by the WTO policies, and recommends that human rights should be used more proactively by developing countries and human rights and development advocates as part of advocacy and reform strategies.

Cotton production in WCA can enable farmers to earn a livelihood, including access to food and health. But low cotton prices in recent years have increased poverty levels in WCA, making it more difficult for WCA governments to fulfill their human rights obligations to their own people and making enjoyment of human rights more of a distant prospect for hundreds of thousands of African farmers and their families. The elimination of US and EU trade distorting subsidies on cotton is the only solution to have balanced approach in cotton sector that will strengthen South-South Voice and beneficial to India and WCA producers working for their welfare benefits.

Along with it, India and Africa expressed that it would not in itself guarantee lasting changes because the issue of over-production and dumping would remain. Indo-Africa Delhi Declaration put caution that elimination of subsidies needs to be accompanied by long-term policy changes that manage supply-side problems in cotton producing countries worldwide and mechanisms that guarantee fair and stable prices. The US in particular should implement policies and prohibit harmful practices by large agribusinesses that dominate cotton markets, including export dumping. Enforcing anti-trust laws would be one such step. In addition, more attention needs to be given by governments as well as by development and human rights advocates to the inconsistencies between current US and EU cotton policies and international commitments to development cooperation and respect for human rights.

Indo-Africa use international human rights obligations in defense of their development interests and should test the value of such arguments both within the framework of reporting to UN human rights treaty monitoring bodies and at the WTO. The primary responsibilities of US and EU governments for the human rights of their own peoples must also be kept in mind. Some small farmers in the US and the EU presently benefit from subsidies, while other taxpayers lose out from the generous subsidies directed to already-rich agribusiness. Any reforms in the US and EU cotton sectors should not discriminate against the poorest sectors of society, and should be mindful of the fact that those affected will need to find other productive livelihoods.

Importance of south-south cooperation between India & Africa

India started Africa Focus Program in 2002 started with the seven countries (South Africa, Nigeria, Mauritius, Tanzania, Kenya, Ghana and Ethiopia) and later on it was extended to all the other sub-Saharan countries such as Angola, Botswana, Ivory-Coast, Madagascar, Mozambique, Senegal, Seychelles, Uganda, Zambia, Namibia and Zimbabwe, North Africa viz. Egypt, Libya, Tunisia, Sudan, Morocco and Algeria. Under this program, the Government of India extends assistance to exporters, Export Promotion Councils, etc to visit these countries, organize trade fairs and invite African trade delegations to visit India. In order to boost the trade, the Government of India has decided to take the following measures: (1) Preferential Trade Agreement/Free Trade Agreement, (2) Enhanced Interaction with important trading partners (3) Institutional Mechanisms such as Joint Trade Committees (Joint Trade Committees already exist with Senegal, Kenya, Zimbabwe, Ghana, Uganda, Ivory Coast, Namibia, Ethiopia and Tanzania and Joint Economic Commissions with Algeria, Egypt, Libya, Morocco, Sudan and Tunisia), and Joint Business Councils.
Along with it, Africa-India Forum Summit is held each year started from 2005 to discuss different projects including agriculture (food security, eradicating poverty and improve people’s livelihood) and rural development, pilot project on establishment or micro, small and medium enterprise and science and information, communication and technology for development among others. The Research & Development part of agriculture sector is connected to Pan-African Network to strengthen Indo-Africa development goals.

Regarding cotton & textile industry, the Cotton production and ginning activities are very seldom integrated with downstream industries such as spinning, weaving and textile manufacture, except in India. India offers this expertise to cotton producing African countries that will initiate the Non-Farm Employment opportunities for African local peoples. One of the best features of African cotton is that it is relatively homogeneous in fiber characteristics, due to similar growing conditions and the low number of varieties planted in most countries. Indian investors appreciated this feature and assess the seed cotton quality and grade of lint likely to be produced after ginning and offer good price. Indian cotton investors are not bothering about the issue of Contamination and are not taken into account and suggest little care (by using hand gloves) is given to the cleanliness of cotton before it reaches the gin. The price of African cottons on world markets is penalized by the World Bank sponsors but Indian textile does not discriminate on this account. India offers the growing fewer varieties in a particular country makes it easier to maintain homogeneity of quality, though proper controls and good classification can ensure good performance for Indian textile industries either settle in Africa or in India. The Indian cotton & textile industry along with agriculture institutes particularly R & D sector doesn’t have any policy to use instrument testing of African seed cotton grades.

Investment opportunities for African & Indian Investors

Trade agreements between certain African countries and India extend over many years. But the competition is strong as other developed and developing countries seek to get into the African markets, which is not as easy as it may seem. Various trade agreements exist between certain African countries and India and due to these fruitful relationships, India has been keen to invest in cotton & textile by extending its expertise. Indian investors seek opportunities in this sector that is based on such as:

(1) Achieving greater value through improved quality, marketing and valorization of by-products.

(2) Bridging performance and competitiveness gaps through farm-level productivity and ginning efficiency.

(3) Improving the sector’s sustainability through institutional development and capacity-building of stakeholders, as well as strengthening of governance structures and management systems.

African cotton has two comparative advantages in the world market: the intrinsic quality of its fiber (the fiber properties) and the fact that it is handpicked. Indian investors are attractive towards it. Greater awareness and a general mobilization are necessary to reestablish Africa’s main comparative advantage stemming from the manual harvesting of seed cotton. Indian investors R & D sector initiate a concerted efforts to improve fiber characteristics through research and better production practices, reduction in variability of lint quality through more rigorous seed cotton grading and lint classification, control of contamination through capacity building and price incentives in Africa that will optimize quality management in ginning. The Indian R & D efforts must also be made to generalize the use of cotton cloth wrappers for bales, develop container loading at the gins and optimize export logistics.

Along with it, Indian investors should coordinate with independent ginners in SSA to improve marketing performance. The investors should adopt the features like forward sales, the most common marketing method in the cotton business, are the easiest and most effective marketing strategy to cover risks. Indian investors should initiate direct sales from ginners to spinners that can improve the quantity and quality of market knowledge available to the ginners and benefiting economically to the ginners.

Indian investors may start with the farmer organizations and work to the advantage of the sector to allow them more systematic contractual trade relationships between them. It will strengthen more bargaining capacity of the farmers to negotiate a pricing approach that is tied to world prices on the one hand and the textile companies will get quality on the other hand. Considerable institutional strengthening and training will be required first to reinforce producer organizations.

Indian cotton & textile sector in Africa will share knowledge and Indian experience by explaining research techniques to the farmers in different ways such as: effective (timely) management of pests (weeds and insects) on both their food and cotton crops, soil fertility management and share the capability of soils for cotton production. Improved cotton production technology therefore needs to be embedded in sustainable cropping systems to be socially and economically viable in the long run.

Conclusion

The improvements in all of the above will depend on strengthening internal and external linkages between research and extension. Internal linkages are those that help articulate demands from the users of improved cotton technology (farmers on the production side and spinners on the consumption side), establishing relations with common farmers and deliver technologies to users (ginning companies, extension workers). Indo-Africa governments can also contribute to these changes by promoting new investment by offering more prices to farmers by establishing co-operative societies (as it is working in the rural areas of India). Such change may improve mind set to the farmers and strengthening production in the longer terms.

Overall, Indian investor should initiate the education on the impacts of agrochemicals on human and environmental health. According to a global study, cotton uses 22% of all insecticides applied in agriculture and 11% of all pesticides. Because of these economic pressures, many African smallholders are being driven to the margins of economic viability or out of cotton altogether with few alternative cash crops. There is a need to introduce bio-environment friendly fertilizers and may be given on credit (deducted from a farmer’s earnings after harvest) and introducing a crop insurance in this sector. The small holder farming should strengthen through cooperative farming as it is practiced in different part of India (South India). Finally, Indian investors should promote handpicking of cotton balls while encouraging African farmers to wear gloves to help stave off contamination.

*************

References

Africa-India Framework for Cooperation, India-Africa Forum Summit, 8- 9 April 2008.

Delhi Declaration, India-Africa Forum Summit 2008, New Delhi, 8-9 April 2008.

Fisher. F.B. 1932. That Strange Little Brown Man Gandhi. New York. Ray Long & Richard Smith, Inc.

ICAC. www.cesr.org/ESCR/gencomment12.htm: accessed on 23 November 2010.

 

 

Last Updated on Friday, 14 October 2011 01:04
 
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Wednesday, 01 December 2010 13:11

African Agriculture: An Abiding investment Avenue for India

Indo-Africa Business, February-April 2010, EXIM Bank.

Dr. Suresh Kumar

Introduction

The post 1990 global challenges focus on three F’s i.e. Food, Fuel and Finance. To deal with these challenges, India firmly believes that developing countries are not accepting the Concept of Aid in terms of quantity and demand quality to be an integral part of economic development. Science and Technology (S&T) of India shaped new vision in the economic front, necessitating modification in the Indian foreign affairs in the post 1990s.India adopted market economy and presented itself as emerging entrepreneur under global economy. ‘Indian foreign policy believes in self-reliant economic growth in developing countries that will lead to self-reliant development. The development cooperation should not be based on donor-recipient basis but stand on equal partnership’ (Suresh Kumar: 2008). Indian political economy as a gear of its foreign policy is focusing on the African society. The human resource in Africa is 900 million as compared to India’s 1100 million. ‘The Africa-India Summit 2008 endeavors capacity building in policy analysis, planning and training in agriculture sector--- capacity building in best practices and adaptation on the impact of climate change and desertification’ (Africa-India Framework, 2008: emphasis mine). India adopted collective engagement in Africa that will promote African infrastructure and agro-industry. African regional approach will give the member states greater opportunities to attract foreign investments. The process of creating a free trade area that incorporates the East African Community, the Common Market for Eastern and Southern Africa, and the Southern African Development Community is underway, bringing together nearly 600 million people into a single market. Such a development will have a major bearing on India-Africa economic exchanges.

Is India A Threat to Africa?

Today, Africa is the hub for resources with leading world powers eyeing the continent for its natural resources. Only an average 3% of cultivatable land in Africa is being used now, which is not sufficient to feed the entire population of Africa. It is imperative to incorporate the development of agriculture sector as a prerequisite to country’s progress and overall prosperity in contemporary Africa. The trade and investment in agriculture and agro-infrastructure are inter-linked and need mutual support, which persuaded Africa to share Indian experience in this sector. National Research Development Corporation (NRDC), Central Food Technological Research Institute (CFTRI), Council of Scientific and Industrial Research (CSIR), Government of India, and Indian Council of Agricultural Research (ICAR) have assisted 5,000 entrepreneurs for developing their business ideas in the African countries. Today, India’s foreign policy is being questioned while dealing with agriculture sector in Africa. The issues being raised are:

1. Is India accused of 'neo-colonialism' in Africa using its agriculture land to cater Indian population at home?

2. How best can India work with African countries in facing the challenges of food sufficiency?

3. Are there any S&T measures that can ensure a long term benefit that is adaptable for the local requirements?

4. Are there any institutional links and processes by which this knowledge can be shared with African states?

India will be the largest importer of the food in the world. The agriculture development in Africa will strengthen the food security to its indigenous people on the one hand and play its role as the world grainary on the other hand. It will be the additional source of income for the African countries as it will bring the dollar by exporting the numerous items related to agriculture sector.

Land per capita is shrinking – 1 to 1.5 acres, 0.3 hectares

Farming is a terrible business – 45% want to quit farming, middle class nightmare

Increasing cost of land - $20,000+ acre,

10 to 100 acres, illegal crop farming, land ceiling act

Climate Change – glaciers

Damming the Brahmaputra

Water table is falling – NASA image, water table

1. India and New Colonialism in Africa

The academic circles on Africa worry about its New Scramble and having a larger fear on India’s role as neo-colonial power. Dean Nelson observed that Karuturi Global (KGL), an Indian company, one of the world’s largest producers of cut roses has been accused of neo-colonialism in Ethiopia and Kenya (Dean Nelson: 2009). KGL refuting these claims, mentioned its agriculture investment policy clearly and highlighted that ‘Our labour welfare measures in Kenya such as Healthcare services to locals (other than employees), food to drought victims, sponsored a village mortuary and the regional WWF, provided infrastructure to the local police and manages the Sher Football Club, a team in the Kenyan Premier League, which has six of its members in the national squad are having a positive impact on the lives of Kenyan workers, their families and communities. Similarly, KGL plans to provide schools, hospitals, housing and bus facilities to Ethiopian workers. The KGL social welfare initiated programmes such as distribution of woolen blankets to poor and elderly in June 2007 and 2008, contributed $75,000 towards drinking water supply for Holetta town, provided free food every Sunday to 100 destitutes for the past two years and drinking water supply to Sadamo village. The company facilitates by using indigenous Greenhouses, in-house power generation from biomass, rainwater harvesting, use environment-friendly fertilizers and chemicals, different technique for irrigation and hydroponics method of cultivation’ (Karturi: 2009).The investment in agriculture sector in Kenya and Ethiopia has created employment opportunities for skilled and unskilled labour there. More or less, the company uses the green houses for floriculture as that land is not suitable useful for other crops. The company plans to grow sugar, cereals, vegetables and palm and has acquired 336,000 hectares of land in Ethiopia and Kenya covering self-reliance schemes avoiding huge debt policy. A good number of sugarcane factories have been started by Indians in Ethiopia according to the region’s demand. They are sowing sugarcane locally and producing sugar to cater domestic as well as regional market.

Devinder Sharma of the Forum for Biotechnology and Food Security termed such deals as land grabbing and exporting food from Africa as food pirates (Dean Nelson: 2009). He did not support it with substantial documents. Indian Ministry of Finance’s data on Foreign Direct Investment (FDI) in African countries refutes negative propaganda and shows the real picture. ‘In the case of outward FDI, it is already observed that approvals of Indian investment abroad increased significantly. The volume of FDI and share of cumulative outward FDI towards the developing countries are shown in Table-1. Table-1 shows that Mauritius and Russia are at the top of the figure of cumulative share of FDI towards the developing countries for the period 1996-2008, followed by Sudan, China, Egypt and Brazil’ (Subhasis: 2009). The government approved sector wise FDI in manufacturing, financial & non-financial services and trading. This data does not show anywhere the investment in procurement of land and in agricultural sector in general. Hence, the data does not prove the intention of Indian FDI as being used for land grabbing or food piracy.  Indian corporate houses are making overseas investments through countries like Mauritius that either have low tax rates or allow tax-free remittance of income. Despite the fact that outward FDI is moderately concentrated for the developing world, the African countries may follow different trends. Similarly, John Heine expressed, “Yet, contrary to what some might surmise from this new version of the Scramble of Africa, if African countries play their cards right, they have much to gain. Indian companies are more willing to invest in infrastructure and in the downstream facilities needed to bring products to port than western ones” (John Heine: 2008).

It is observed that India focuses on bilateral, multilateral and regional economic cooperation acting as bridging power with all the major powers as a part of its foreign economic policy. But being seen as the bridging power, it should not be misused by Multinational Corporations using India in Africa for its self interests and assigning a proxy label of new-colonialism on India. Following suggestions may help to curb misnomer of new colonialism on India.

1. Public-Private Partnership (PPP) in Africa is 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 Africa is sufficient for the domestic consumption including having food stock for the emergency. Indian investors are buying land in Africa for agricultural purposes. 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 most of the African states do not have the advance cold storage facility to keep the food grains presently on the one hand and the lower ratio is sufficient to cater population of a country on the other hand.

2. African governments should adopt a method of assessing the quantity of food production required for local market versus production for exports. Along with it, similar method should be used for local agro-industrial activities. These measures will help to develop mutual understanding among PPP.

Criticizing PPP, Dinesh C Sharma has stated that ‘Indian firms are trying to gobble cultivable land in Africa. These companies are going to produce food for shipping it back to India taking advantage of the duty-free options of the LDCs. I wonder---Indian business, will grow food not for the people of Africa but for shipping it back home’ (Dinesh C Sharma: 2009). It should be remembered that African demand of 200,000 tons of food grains accomplishes a supply of only 100,000 tons in Africa (FAO: 2003 & 2002: emphasis mine). It needs scientific technology and investors in agriculture sector to make up the difference between the demand and supply.

It is up to Africa either to adopt another phase of failed experiment of Structural Adjustment Programme sponsored by World Bank and IMF on their terms & conditions or to develop the mutual bond with developing countries like India to cater to their domestic and regional demand. The ratio of agreements on the use of arable land between India and Africa as discussed above will provide sustainable development for Africa in food and will also support for Asian granary.

2. Indian Investors and Africa’s Food Sufficiency

The question raised that are there any S&T measures that can ensure a long term benefit that is adaptable for the local requirements shows a genuine concern of local users and investors. The answer lies in the India’s transfer of knowledge/technology that could help Africa deal with the problem of food crisis. The importance of small farm mechanisation and India’s expertise in small tractor production by good number of companies is highly relevant to Africa. Indian investors provide agricultural mechanisation such as seed cum fertilizer drill that facilitates seed and fertilizer saving, enhancement in cropping intensity and increase in gross income and return to farmer in Africa. India manufactures agricultural tractors,  mould board plough, disc plough, sub-soiler as primary tillage, spring loaded tillers, harrow, leveller, bund former, scraper, rotary tiller as secondary tillage, back hoe with tractor, laser grader, graders, scrapers with tractors as earth moving equipments1 and sowing machinery.2

Indian investors promote agro-processing firms, joint ventures in horticulture, storage facility and technology transfer with African governments to address world markets. Besides the other areas, India should focus on the Africa’s need for quality infrastructure and micro financing to enhance the farm productivity in the African countries. Along with it, Mr Sanjay Kirloskar stated that ‘African women are the real workers on small farms. The experience of Indian women working with micro finance in developing self-help groups (SHGs), co-operative societies producing number of food, medicine, beverages and cosmetic items for the urban market will be the real input for the African women. Africa having small holding can use this micro finance for better seed, agriculture implements, irrigation systems and natural pesticides. Along with farm-related partnerships, African countries hope to replicate India’s success in microfinance. Indian microfinance institutes could assist Africa to build this sector. And, a system of sharing of expertise in microfinance could be developed with the participation of India’s leading microfinance companies. Africa could become the world’s food basket with Indian expertise and farm technologies.’ (Kirloskar Sanjay: 2009).

3. Indian Institutional Links and Knowledge Sharing with Africa

The Focus Africa Programme of India initially emphasized on seven major trading partners of the region, namely Ethiopia, Nigeria, South Africa, Mauritius, Kenya, Tanzania and Ghana that account for around 69% of India’s total bilateral trade with the sub-Saharan Africa (CII India-Africa: 26). NEPAD shares the developmental approach with India and Indian institutional partners. The institutional entrepreneurship in Africa represents through CII, FICCI, EXIM (BANK), IOR-ARC, and Focus Africa. India's economic engagement in Africa is working as per their local needs. Different turnkey contracts have been undertaken in Tanzania, Uganda and others. It enables import of Indian equipment and technology on deferred credit terms extended through EXIM Bank, PTA Bank, BOAD, EADB and EBID. Joint Ventures of Indian companies are engaged in Africa through Line of Credit (LoC). A visible change in perception with access to greater knowledge of the region has helped in promoting economic relations between the Indian industry members and the African countries. CII’s effort is to develop a long term sustainable relationship with the private sector in the African countries. The participants in March 2009 Conclave was remarked by 483 African delegates and 318 Indian delegates who discussed more than 193 projects worth $17.2 billion in technology, agriculture, human resources and energy in the COMESA regions (CII: 2009).

African Priority in Agriculture Sector and Indian Investors

The agriculture sector faces the changing environment that demands higher food quality, productivity improvements and environment friendly agricultural methods. This sector needs sophisticated equipments for agronomy concerns optimized yield, precision farming, fuel saving, less soil compaction and safety. Africa needs Green Revolution for achieving food security as the population will reach 1.8 billion by 2050.  Table-2 highlights the Afro-Asian particulars about the irrigated land area and the potential through irrigation in this sector. More than 90% of agriculture in Africa is rain dependent. Africa has abundance of water across the continent. The major water bodies across the African continent includes major rivers such as Blue Nile, White Nile,  Limjpopo, Niger, Volta, Senegal and Chari and lakes such as Lake Chad, Victoria and Malawi. There are 73 other major rivers and Lakes, 1300 small lakes, 13 major river basins and 104 small river basins across Africa. Only 20% of it is required to make the continent food secure. It is thus essential to enhance irrigation facilities equipped with extensive infrastructure to fulfil the basic needs’ (Kirloskar: 3-6).

Africa needs water pumping system and water management techniques from India. The requirement of little training to African HRD will help installation of pumps for handling it that will change even the deserts into green areas. More than ‘100,000 Kirloskar pump sets are greening 200,000 ha of desert land along the Nile for the last 40 years and are in operation at more than 50 large pumping stations in Egypt. These pumping systems are also used in South Africa, Lesotho, Angola, Ghana, Ethiopia, Sudan, Kenya, Tanzania, Uganda, Zambia and Zimbabwe making a difference in key sectors of economy’ (Kirloskar, 2008: 14-15). Indian investors in Agriculture sector in Africa offer better seed technology, irrigation, scientific instruments, etc. (Annexure-1) to get more output supporting poverty alleviation programmes. Mr. Felix Matati, Minister for Commerce, Trade and Industry, Zambia pointed out, ‘African countries would prefer Indian investment as we understand each other. You have cost-effective technology, which we want. We are able to understand each other better as we are both from the south. India-Africa trade has been lacking clear visibility. We want to change that’ (I T Christie: 2005).

Africa offers different key areas of investment (Table-3) that may start in different provinces/districts/zobas/villages. Table-3 deals with Fruit & Vegetable, Agriculture Engineering, Fish and Fish Farming Industry, Livestock Industry, Food & Beverages and Dairy Sector. The experiences of African visits and five Conclaves on India-Africa Partnership3 enriched detailed knowledge on agriculture sector of some African countries that are discussed here as case studies.

1. Investment in Burkina Faso

Burkina Faso is second largest producer of cotton in West Africa and ranks third in Africa. Agriculture plays a key role in this country’s economy that accounts for over 40% of the country’s GDP, 80% of export revenue and 85% of employment (Burkina Faso in Focus: 30). The government gives priority to twelve fields for investment in cotton, cereals, fruits & vegetables, oil seeds, skin and leather, meat, milk, chemical products, fertilizers and pesticides and guarantees certain rights4 to boost the confidence of the foreign investors. The country provides a possibility of Joint Venture with local business community, low cost of labour and good infrastructure (telecommunication, roads, railways and airport) and services in the heart of West Africa’ (Burkina Faso in Focus: 26). The agriculture investment exists in the following sectors such as Industrial units of manufacturing tractors, manufacturing pump sets for irrigation, manufacturing agro-food products, agro-chemicals (fertilizers and pesticides), manufacturing textiles (Cotton fabrics, garment production and yarn) and setting up commercial farming units (fruit, vegetables, Arabic gum and cotton).

2. Investment in Ethiopia

Ethiopia adopted an agriculture and rural-centered development strategy known as Agricultural Development-Led Industrialization (ADLI). ADLI focuses on the development of smallholder farm productivity and the expansion of commercial farms. One suggests the structure of cooperative farming5 should be like that of West & South India and Kenya may be replicated in Ethiopia. If successfully implemented, it has the potential to reduce food insecurity, absolute poverty and environmental degradation. Ethiopian farmers should adopt alternative technologies that require Indo-Ethiopian investments in rural infrastructure, input and output market improvements, land markets, credit policy, agro-industry and promotion of non-farm enterprises. The challenge is to develop innovative and cost-effective PPP related institutions (including NGO’s) that support agriculture establishing pro-farmer environment.

Ethiopian agriculture, second largest sector of investment focuses on FDI since 2004 and received number of projects as mentioned in Table-4. It is observed that the Indian community has been involved in teaching, health, industrial development and agro-industry that promote goodwill and understanding among people in Ethiopia. Overseas Infrastructure Alliance (I) Pvt. Ltd. (Annexure-I) is currently ‘supplying of 132 kv Power transmission Line, Substation & Distribution Equipment Project worth approximately US $ 78.0 million to Electric Power Corporation (EEPCO). It is setting up 26000 tons per day Green Field sugar project in Tendaho, worth US $ 345.00 million and installing new power plant worth US $ 142.00 million in Finchaa Sugar Factory in Ethiopia.’ (Your Partner: 2008: emphasis mine). Similarly, Kamani Engineering Corporation (KEC) International is working for power transmission over minefields in Africa from scorching deserts of North-West Africa and Egypt. It has also undertaken rural electrification across Ethiopian working on altitude of 2100 m above sea level and politically sensitive Somalia-Ethiopia border and other parts of African continent. It helps the agriculture sector adopting mechanical technology and irrigation facility (Annexure-I). The production of sugarcane and the sugar industries in Ethiopia and Kenya are benefiting indigenous people of this region and nothing has been brought back to India.6 This counters the allegation of food piracy against India.

3. Investment in Ghana

The government gives incentives by way of tax rebates for manufacturing in certain locations, tax holders, ranging from 5 to 10 years depending on sectors, custom import duty exemption for plant machinery, equipment and parts thereof and double taxation agreements (Ghana: 2005). Ghana is searching for an investment location and offers opportunities such as agriculture (Cassava, Cotton, Sugarcane, Soya Beans, Oil Palm, Pineapples, etc.), agro-processing (Cocoa, Fruits, Vegetables, etc.), general infrastructure (Agricultural and Industrial Estates, Roads, Railways and Ports) and fisheries.

4. Investment in Senegal

Senegal has become a leading exporter of cherry tomatoes, fine green beans, basil, green asparagus, onions, potatoes and aubergines. 70% of Senegalese population is involved in agriculture sector that is central to the country’s development. Senegal is highly dependent on import of rice. As an alternative, the Senegal government offers investment opportunities in this sector particularly in Senegal River Valley region. An upper limit of CFA F 15 million is the condition of investment in this country. There are export opportunities facilitated by AGOA visa in the agri-business sector in ‘floriculture, fruit cultivation, market gardening, thousands of hectares of cashew nut plantation, diversification of the industrial processing of groundnut, fish cultivation, support to the development of horticultural exports, improvement of the condition of market operation, support to agro-business producers & operators for a better adaptation of products to the market, development of private irrigation and land-related activities’ (Senegal in Focus, 2007: 24-25).

5. Investment in Uganda

Uganda is east Africa’s food basket with over 80% of the population relying on agriculture for its livelihood. The 32 million hectares of arable land in Uganda is lying untapped. The agro-processing can improve the livelihood of low income groups as it produces cereals, root crops, coffee, tea, livestock, fish and forestry. There is a lot of scope for business in processed agro products. India and Africa are starting quota free trade and thus Ugandan products will be sold duty free in India. The linkage potential in the plantation and agro-industry includes:

· Outsourcing the field operations including seed-bed preparation.

· Supply of produce to processors.

· Maintenance of machinery.

Uganda needs US $ 15-30 million investment to expand rose industry depending on wooden or metallic infrastructure. All the rose projects send soil samples to Holland for analysis that cost US $ 200-600 per hectare. The investors may establish soil analysis laboratory and provide services in Uganda itself at much cheaper price. Greenhouse plastics constitute 6% of the investment requirement and need to be replaced every 2-3 years, providing commercial opportunities for local manufacturers. Fertilizers, herbicides, pesticides currently imported are another area of investment’ (Outline: 8: emphasis mine).

This agro-industry needs strong infrastructure such as roads, railway, etc. in Uganda. It requires a more efficient railways network to connect Kenya, Tanzania, Rwanda, Burkina Faso and Southern Sudan. This is a very important area of investment for Indian investors. The railway is the system that can withstand Ugandan local weather, because it gets lot of rains, which can be a problem for the roads. Finally, the rate of return in Africa and Uganda is very high, about 30% as compared to India, European Union, China and Latin America (Uganda 2007: 11).

6. Investment in other African Countries

a. Angola- It has introduced development programmes for rural economy and is expecting more cooperation in private sector in terms of ‘investment in mostly cereals, coco, cane sugar and tobacco from India’.

b. Botswana- It is looking forward to setting up units of production of commercial farming such as fruits, vegetables, Arabic gum and cotton. The opportunities in this sector include the setting up of small industrial units of milk processing (dairy plants) breweries, production of animal feeds, veterinary pharmaceutical products, meat processing, leather tanning and products, cattle rearing-ranching and poultry.

c. Cameroon- The Government is stressing upon ‘PPP to promote farm productivity and Indian private investors could supply equipment to small farm holders’.

d. Eritrea- The Government of Eritrea announced new economic investment policy that is known as Proclamation No.159/2007 regarding Foreign Financed Special Investments (FFSI) Proclamation. It applies to all FFSI of more than Twenty Million US Dollars (20,000,000 USD) or its equivalent in other convertible currency. The Eritrean government policies give priority to agriculture sector.

e. Mozambique- It uses 15% of total cultivatable land. It plans to begin a ‘Green Revolution through farm mechanisation and formulated a Food Production Plan for 2008-2011. India could be a partner in providing the infrastructural support and transfer of skills to facilitate the revolution as it has rich experience in capacity building, research and technical training in this field.’

f. Southern Sudan- The government offers policy of concession for ‘private companies to initiate affirmative business atmosphere that is conducive for Indian companies to take a lead’.

g. Mali- Angelique International has been engaged in for the ‘manufacturing and assembling of tractors. The plant was handed over to the client organisations in 2007. The company later entered into a separate joint venture with the Government of Mali with 51% shareholding’ (CII: 2009: emphasis mine).

h. Tanzania- Zanzibar, part of Tanzania is known as the Spice Islands. It offers investment opportunities in horticulture and floriculture, agro-processing, fruit processing & canning, cloves, cinnamon, cardamom, nutmeg, black pepper, chillies, etc.

CII Africa Committee has Institutional Agreements with Africa’s Small and Medium Enterprises (SMEs) and signed Memorandum of Understanding (MoU) in the fields of soap plan, water management and infrastructure related projects during this Conclave of 2009. A strong structure that supports a continuing dialogue, transparent access to opportunities, interaction with the government and the African Heads of Missions has now been institutionalized. Indian institutions such as NRDC, CFTRI, CSIR & ICAR and NEPAD (New Partnership for Africa’s Development) should approach the Forum for Agriculture Research in Africa (FARA), the Southern African Centre for Cooperation in Agricultural and Natural Resources Training (SACCAR), the Association for Strengthening Agricultural Research in Eastern and Central Africa (ASARECA) and the African Centre for Agricultural Research an Development (CORAF) in North Africa to address agricultural strategy for development. Indian investors are training human resource of Africa and imparting knowledge in agricultural sector strengthening the overall food security. There is an active participation of Indian investors in Africa in agriculture sector and in related activities (Annexure-I).

Suggestions and Conclusion

Following suggestions will help to strengthen Africa’s development and their collaboration with the Indian partner reflects the following advantages of scientific agriculture such as:
1. African agricultural trade is controlled by the developed world. Africans should persuade for intra-African trade serving common man’s needs. The resource mobilization should be from the domestic, regional and international markets. African governments should be committed to raise the budgetary allocation to agricultural sector to shape economic growth positively. African leaders should take commitments from all the investors for the adequate training of HRD including skilled labour in agriculture sector on the one hand and work for transfer of technology on the other hand.

2.  As a result of population growth, there is a need to introduce more agricultural land and introduce applications of S&T in Africa. The S&T methods like better seeds, dwarf plantations, demand of less water crop, rotation patterns, minimum period of crop production and preference for the use of natural insecticides will help African agricultural system.

3. There is widespread inequitable land distribution biased against small farmers. The need of community farming under Collective Land System should be promoted, which will help in using scientific agricultural implements in Africa. It will strengthen market based land reform and give more bargaining power to the community farmers as it is successfully working in some states of India.

4.  The scientific agriculture system will persuade and promote the farmers to join agriculture education, literacy programmes and other awareness programmes. Moreover, agriculture extension is an important component of agriculture universities throughout the world, which will help Africa Agriculture Education System to strengthen in rural areas.

5. Different programmes like Diary Farms, Poultry, Piggery, fisheries, Sericulture, Horticulture, Floriculture and Shrimp & Prawn cultivations should be introduced in Africa as an alternate food resource. It needs commercial feed to save grazing areas and build Veterinary Hospitals accordingly. It will help in fulfilling the mutual needs and establish mutual cooperation among rural and urban areas.

6. Africa needs more agriculture scientist and practitioners, who will help African youth to get training in agriculture sciences and develop technology as per local needs. It will enhance field of research and teaching in Agriculture Colleges and University and generate self-employment among educated youth.

7. African governments should initiate the process of Rural Cooperative Banks. These banks may provide different loan schemes for modern mechanical support like tractors and other implements, credit to farmers (to buy good seeds, fertilizer, pesticides, etc) insurance schemes on crops and subsidized technical guidance and other financial assistance (building concrete houses, potable water pipes, electricity, cooking gas stoves and kerosene oil stove, etc.) to rural society. The alternate sources of domestic energy (to avoid firewood) like bio-gas plants, energy saving stoves, solar pressure cookers and wind energy system need to be introduced in the rural areas and people should be motivated to use it. Also, they should be educated to plant private trees in their fields or surroundings for better environment. The banks will strengthen micro-finance and SHGs.

8. Importance of growing trees/plants needs to be communicated through PPP to the people that will help them become aware of soil erosion and land protection promoting Green Environment. The permission to cut trees be made stringent to save plants. The PPP and government should persuade farmers to receive agricultural training courses, awareness of information technology in agriculture sector, use of animal husbandry and building scientific civic society. The soil conservation awareness programme should be broadcasted on the national TV channels and all channels of Radio including FM stations in regional languages that give orientation, training and practice to farmers in their respective areas. The incentives should be given to those farmers who adopt scientific methods of cultivation.

9. Finally, the governments should adopt programmes such as food for work and cash for work programmes in the agriculture and related sectors. The related sectors involve road building network, dam construction, boring wells, small channels from river for irrigation purposes, installation of power projects (electricity), thermal units, etc. The infrastructure development, credit schemes to farmers and proper storage system will abolish the role of middleman. The direct government approach to farmers and market will maintain balance between demand and supply. This relationship between government-farmers-market-consumers will provide a right direction to agriculture sector that will fulfill the needs of African society & promote today’s Investment, tomorrow’s Prosperity in true sense.

Today, the evidence is at best inconclusive on whether technology transfer contributes to growth and poverty reduction in Africa.  There is a need to use appropriate technology as per the requirements of the people. Indian experience of using agricultural technology and its practice on African land will facilitate the way towards mutual socio-economic transformation. Along with it, the modern agriculture system breaks the tendency of Living for Bread Only, avoiding middleman in the market economy and leading their country towards self-reliance in food industry necessary for attaining sustainable development and growth.

****************************************

End Notes

1. Escorts, Sonalika, Eischer, HMT, International Tractors, Mahendra & Mahendra, etc. are the largest producers of Agricultural equipments in India.

2. Escorts produces sowing machinery such as post hole digger, paddy planter, seed drill for cotton seed, seed cum fertilizer drill, potato planter and multi row vegetables planters, irrigation systems such as sprinkler systems, drip system, irrigation pumps like centrifugal pumps, stationary diesel engine driven centrifugal pumps, engine set, electric pumps and submersible pumps, sowing & harvesting machinery such as maize combine, sugar cane combine, mowers, paddy combine, reaper, wheat combine, fruits harvester, onion harvester, potato digger, cotton picker and post harvest machinery like bailer, tipping trailer, sugar cane grabber, trailer, thresher and maize Sheller. Escorts, 2008, Improving Farm Productivity through Agro Machinery, Faridabad.

3. The author has visited 15 African countries and was a delegate right from the beginning (since 2005) and raised number of issues in agricultural sector during CII conclaves.

4. Right of full business awareness for foreign investors, Right to acquire real estate, land, forested land, industrial areas in addition to concession from government, Right to transfer capital and profits of any investor.

5. The small land holders having 1-2 hectares (or less) of agricultural land combine with other holders and form a village cooperative of 10-50 hectares. It helps in using modern agricultural techniques that produces good output providing direct benefit to the farmers.

6. Informal discussion of the author with Indian sugar industrialists in Addis Ababa and in his paper presentation on Indo-Africa Trade & Investment in Agriculture Sector: Development & Mutual Partnership, 2nd RBI International Business Conference on Entrepreneurship Development, in Africa, 22-24 August 2008, Addis Ababa, Ethiopia.

References

Africa-India Framework for Cooperation, India-Africa Forum Summit, 8- 9 April 2008.

Burkina Faso in Focus, 2004, Business magazine, Embassy of Botswana, New Delhi.

CII 5th Conclave on India Africa Project Partnership 2009, ‘Celebrating Partnership’, 22nd -24th March 2009, New Delhi.

CII India-Africa Project Partnership 2005, Background paper, Delhi, p.26.

Dean Nelson, 28 June 2009, India joins Neocolonial rush for Africa’s land and labour, www.telegraph.co.uk: accessed on 28 July 2009.

Dinesh C Sharma, June 26, 2009, Mail Today.

FAO, 2003 & 2002, STAT, Italy: Food and Agriculture Organization.

Ghana, September 2005, The Financial Express, Delhi.

I T Christie and D E Crompton, 2005, Tourism in Africa, Washington DC: World Bank Africa region, Working Paper Series No. 12.

John Heine, 2008, India and the new scramble for Africa, The Hindu, July 14, English Newspaper, Delhi.

Karturi: http://www.karuturi.com/index.php?option=com_content&task=view&id=111&Itemid=130: accessed on 30 July 2009.

Kirloskar, 2008, Food Security in Africa through Water Management (Delhi: Kirloskar Brothers Ltd.).

Kirloskar Sanjay, Parallel Session II, Agriculture: Improving Productivity: Finding Solutions, CII 5th Conclave on India Africa Project Partnership 2009, ‘Celebrating Partnership’, 22nd -24th March 2009, New Delhi.

Outline of Business Linkage and other Investment, 2008, Opportunities in Uganda, Delhi.

Senegal in Focus, 2007, Business magazine of Embassy, Delhi.

Subhasis Bera and Shikha Gupta, South-South FDI vs North-South FDI: A Comparative Analysis in the Context of India, Working Paper No. 238, July 2009, Indian Council for Research on International Economic Relations, Delhi

Suresh Kumar, 6 August 2008, ‘Workshop on India’s Development Cooperation-Opportunities and Challenges for International Development Cooperation’, Organized by Indian Investment of Foreign Trade, Delhi and German Development Institute.

Uganda 2007, 3rd edition, Embassy of Uganda, Delhi.

Your Partner in Progress, March 2008, Overseas Infrastructure Alliance, Delhi.

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Table 1: Cumulative share of outward FDI towards Developing (Southern) Countries

Outward FDI to Developing Countries

Country

Total FDI (1996-2008)

(Rs. Million)

Share of

Total FDI (%)

Cumulative

share (%)

Mauritius

175132.52

31.25

-

Russia

122381.55

21.84

53.09

Sudan

54528.93

9.73

62.83

China

37185.79

6.64

69.46

Egypt

32293.95

5.76

75. 23

Brazil

21946.94

3.92

79. 14

Liberia

7584.66

1.35

82.85

Kenya

6033.78

1.08

88. 90

Libya

5772.95

1.03

89. 93

Other Countries Vietnam, Indonesia, Thailand, Sri Lanka & Kazakhstan *

Total

560343.6349

100

* It does not require detailed information as the discussion is focused on agriculture.

Source: Ministry of Finance and www.icrier.org



Table-2 Irrigated Area Vs. Potential Agriculture land

Particulars(ha)

World

Asia

Africa

Total Area

13.4 Bn

3.1 Bn

3.0 Bn

Cultivated Area

1.5 Bn (11.3%)

560 Mn (17.6%)

200 Mn (6.6%)

Irrigated Area

277 Mn (18%)

194 Mn (34%)

13 Mn (6%)

Source: www.fao.org

Table-3 Approved FDI by Sector -Investment in Million Birr

Sector

Approved Projects

Operational Projects

% Share

Projects

Investment

Projects

Investment

Projects

Investment

Hotel & Tourism

8

236

1

1162

12.5

492.4

Agriculture

31

2711

4

1243

12.9

45.8

* Education & Health Services, Construction, trade, Mining & others

Total

276

13914

51

3285

18.5

23.6

* It does not require detailed information as the discussion is focused on agriculture.

Source: Ethiopia: Trade and Transformation Challenges Study, 2004.

 


 
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Wednesday, 01 December 2010 13:10

A perspective on Indian trade and investments in East Africa

Kenya, Tanzania and Uganda

Dr. Suresh Kumar *

 

Abstract

Africa is emerging hub for resources with leading world powers eyeing the continent for its oil and natural resources. India foreign policy approaches as an emerging power towards Africa in general and East Africa in particular, needs a systematic observation and an analysis accordingly. India economic engagement invites private sector investors along with Indian Diaspora set an additional strength working with East African partner.

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