India’s investment in Nigerian Agriculture Sector

The Times of Africa. Vol. 2. Issue3. July –September 2010. Delhi.

Dr. Suresh Kumar

The Role of India in Agricultural Development in Ethiopia

Dr. Suresh Kumar

Introduction

India is a developing country and focuses on area of human resource development and capacity building. Ethiopia’s main aim is to achieve fast economic growth and self-reliance. India became self-sufficient in food in the late 70s. By the time India introduces reform in 1991, it had a huge pool of human resources. It is necessary to have the human resources then one will be able to manage technology, agricultural machines, scientific applications etc. Even the use of foreign aid needs human resources. India is a good model and there is a lot to learn from it.

India was agriculturally backward on the eve of independence. The first five-year plan (1951-1956) of India was more focused on agriculture and power projects. The second five-year plan (1956-1961) laid great emphasis on industrialization. India wanted to be self-reliant, wanted rapid economic growth, and dispense social and economic justice to the people. Ethiopia, during the Emperor’s time, was a feudal society followed by twenty years of the Dergue regime with its controlled economy. Ethiopia adopted the economic reform in1992 and adopted market economy. Table 1 shows the fact that Ethiopia has the large population below international poverty line. It was estimated that the level of poverty in rural Ethiopia has increased as compare to India.

Table 1. Ethiopia’s Poverty and Inequality Indicators in Relation to Selected Countries

Source:  World development Indicators 1998/99 and 2000/2001

The vast potentials of the agriculture sector in Ethiopia require infrastructure development, agro-industry and the food security system including buffer stock. Building of buffer stocks helps to protect unnecessary consumption and to ensure that the food is well distributed at the time of emergency among the poor section of the society in the country. India has public distribution system, which involves procurement at minimum support price from farmers and distribution systems. The public distribution system provides food grains at minimum support price. In fact, the system of fair price shop in India involves trading one-third in food grains. The public distribution system also includes ‘food for work’ program. In this way, we are able to cover 80 million people. India today produces about 210 million tons of food grains and it has 50 million tons of buffer stocks.

India is a country, which faces natural calamities such as droughts and floods. There are many challenges; for example 70% of India’s and nearly same in Ethiopian land is dry land, which one need to focus on. But that doesn’t mean that one neglect industries also.  Ethiopia has so much potential in minimal resources that can be exploited. Ethiopia is on the right track and has expressed very important areas of reforms. Concentration on those areas of good competence is very important to overcome problems like poverty and drought.

Trade Relations between India and Ethiopia

Ethiopians (85%) and Indian (70%) population are related to agriculture and there is a need to re-focus on agriculture. Both the countries have rich resources, good climate, water resources and Ethiopia is naturally known as the water tower of Africa. The concentration on agriculture along with industries requires a sustainable policy in Ethiopia. Mrs. Jordana Diengdoh-Pavel, the current Indian Ambassador to Ethiopia said, “Agriculture is very important for developing countries. In this country 85% of the people depend on agriculture and is the backbone of the economy. Agriculture was focused through five-year plan in India. Naturally, the state has to play an important role to protect industries from foreign competitions. We started from that and we came to this level”1.

Today, the private sector is the backbone of the Indian economy and accounts for 70% of the GDP. Agriculture, horticulture, floriculture, sea food industries, agro industries, agro-based industries and food industries are in the private sector that includes small and large scale industries. India has almost 3.57 million units in the small-scale sector. They employ about 20 million people and contribute 165 billion USD to the Indian economy. The role of private sector is substantial in the growth of sustainable economic development.

The trade relation between India and Ethiopia is growing gradually. In 1992, it was only about 12 million USD. In 2000/2001, for the first time, the trade relation between the two countries crossed the hundred million mark, 108 million USD out of which the Indian share was around 90.4 million and Ethiopian was around 18.4 million and in 2002/03, out of 72 million USD, the Indian share was over 60 million and the Ethiopian was 10 million.2 So, more or less the balance is in India’s favour. There is a lot of emphasis on the promotion of trade relations recognizes the potential of both countries. There is presently more action in the business community. Ethiopia staged an Indian exhibition in 2002, which is the first in its types in the Horn of Africa. About 50 companies participated and exchanged their profiles to Ethiopian business community. They also got opportunities to interact with members of the Indian (Ethiopia-Indies) business community. India is participating regularly in the Addis Ababa trade fare focuses on mostly iron and steel products, machineries, drugs, pharmaceuticals, plastics, leather, cotton, and pulses. Our industries are keen to invest more in the field of electronics, food processing, business, agro industries and agro-based industries, etc

The Ethiopia Agriculture and Need of Sustainable Development

Ethiopian peasants normally collect their main harvest known as the Meher. Paradoxical as it may appear, a major long-standing challenge for the survival and livelihood of the Ethiopian peasantry has surfaced not only in years of drought and famine but also in years of bumper harvest or relatively above average volume of production. Ethiopia, currently, not only in times of poor harvest, but also in periods of bumper harvest, markets are seen penalizing poor peasants repeatedly. Surprisingly enough, no intervention is being exerted on the part of the government or the responsible federal and regional government authorities to correct the widespread domestic agricultural market imperfections. As a result, the widespread poverty amongst the Ethiopian peasantry increase and the consequent erosion of the asset base of farm households observed. The majority of  (urban and rural) Ethiopian due to lack of alternative livelihood options, periods of poor agricultural harvest or drought faces malnutrition and hunger. In poor economies like Ethiopia, one major critical problem of the dysfunctional nature of agricultural markets is the lack of physical infrastructure facilities, storage facilities and major and feeder roads. Another problem is the lack of marketing information infrastructure on local and global markets, including the training and management expertise and dissemination mechanisms among the various actors, i.e., peasants and buyers, in the market. Thus, major impetus need to be given like:

·        Building the major roads of the country and also feeder roads in producing regions,

·        Develop the human capital,

·        Develop marketing information tools from village to regional places,

·        Build up central markets to enable better and quicker local and international market information analysis and dissemination,

·        Integrate local market with global market penetration for better results.

Efforts for Sustainable Development

The government should lay a clear agricultural marketing policy and the associated intervention mechanisms, including the designation of a public organization (sort of a grain board) that could play the economically and socially desirable task of absorbing, storing and properly utilizing the available surplus production. There is a need to safeguard the poor peasants from facing drastic falls in their producer prices. The government should study and reform its business licensing procedures, controls unhealthy regulations and provide basic requirements and contribute to better and highly efficient marketing channels in local and international marketing operations. The local and international partners of development should be committed to poverty reduction, food security and development of Ethiopia. They should play a key role in supporting the development of a properly functioning national integrated agricultural production and marketing system. Their coordinated effort in this regard is quite invaluable as it significantly contributes towards meeting the challenging tasks of food self-sufficiency and food security in the country and relieves donors of their continued humanitarian responsibility of providing food aid to Ethiopia.   Apart from the current practice, Ethiopian peasant requirements to be given the necessary support and advice to produce crops suitable to those geographical areas and generate demand for the produce in the local or export market.

Thus, the concerned government bodies, in cooperation with the local and international partners of development, should demonstrate high commitment and practical deeds by working towards enhancing the crucial role of well functioning agricultural markets. It will act as an incentive to a sustainable increase in agricultural production and making its traditional roles in facilitating national economic development.It is, therefore, mandatory to point out and stress areas where the government and the other partners of development should focus upon in building a dynamic agricultural marketing system. Table-1 shows that 52 percent were wholly foreign, while the remaining were joint venture projects. Joint venture projects were found to be relatively bettered implemented compared to wholly foreign owned projects. This might be attributable to the fact that while foreign investors strive to follow the delivery of equipment and machinery, their domestic counterparts follow the construction and other assignments in the country. According to a diagnostic trade integration study of 2003, more sectors in the country are now open to foreign investors. However, those currently reserved for domestic private investors and the government is still numerous. Trade is still excluded from foreign direct investment (FDI).

India Offer to Ethiopia in Agriculture Sector

With a view to significantly enhance India’s trade with Africa, the Govt. of India launched an integrated programme “Focus Africa” from the year 2002-03. The main objective of the programme is to increase interactions between the two regions by identifying the areas of bilateral trade and investment. The “Focus Africa” programme emphasized on seven major trading partners of the region, namely Ethiopia, Nigeria, South Africa, Mauritius, Kenya, Tanzania and Ghana, which together account for around 69% of india’s total bilateral trade with the sub-Saharan Africa region.3 CII Africa Committee has the mandate to further business

Table-1

Approved FDI by Sector -Investment in Million Birr

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

co-operation that helps establish a symbiotic relationship between India and emerging African economies. The Committee through wide ranging activities,

·        Develop strategies to enhance economic, industrial & trade relations,

·        Identifies areas of mutual co-operation,

·        Highlights issues of concern and evolves suitable policy recommendations,

·        Frames guidelines & checklists for different forms of industrial co-operation, and

·        Represents industry sectors seeking greater mutual co-operation.4

CII has Institutional Agreements with 32 counterpart organizations in 18 African countries including Ethiopia with the objective of facilitating exchange of information and promoting business interests of Indian and African Industry. The Committee pursues a three point agenda

–         Focus on core issues to industry

–         Interaction with African Missions in India & Indian Missions in Africa

–         Partner and assist the Govt. of India in its specific Africa related initiatives5

A bi-monthly electronic newsletter widely circulated to Indian industry, CII’s MoU partners in Africa, Indian Missions in Africa, African Missions in India, key policy makers in India and Africa to update information on economic, industrial and political scenario in Africa, sectoral information for Industrial and trade Cooperation, Business opportunities for both African and Indian companies and Indo African trade and Investment data.   CII has developed an integrated strategy for promoting Indian exports into Africa, to supplement “Focus Africa” programme of the Ministry of Commerce & Industry, GOI that involves

·        Identifying focus markets in Africa

·        Identifying products with potential for export to focus markets

·        Seminars/ workshops o Export Opportunities

·        Trade delegations to focus countries

·        Participation in sector specific fairs in focus countries

·        Made in India/ Enterprise Shows.6

Export-Import Bank of India (EXIM India) operates a number of financing and support programmes to facilitate and promote India’s trade and Investment in the African region. The EXIM Bank operates a programme to support overseas investment by Indian promoter through joint ventures/ wholly owned subsidies. Such support includes finance in select cases, directs participation in equity along with Indian promoter, to set up such ventures overseas.7 With a view to enhancing competitiveness of India exporters, as also identifying Indian trade and investment potential, EXIM India periodically conducts research studies on countries/regions/sectors/ industry and on macro-economic issues relating to international trade and finance. EXIM India has also come out with a bilingual (English and French) magazine titled “Indo-African Business” which focuses on bilateral trade and investment between India and Africa. The magazine addresses the business information needs of companies who are interested in trade with the African region.  With a view to promoting and facilitating bilateral trade with countries in the Africa region, EXIM India works closely with Govt. of India. It has a representative office in Johannesburg, South Africa, which plays a role in facilitating economic cooperation with the African region, and is closely associated with several other Bank’s initiatives.

Role of Indian in Ethiopia

Actually, India is assisting Ethiopia through scholarships and undertake via the general scholarship schemes and cultural exchange program. Good number of Ethiopian students studying in India for B.A., MA/MSc degrees. Miinistry of Education, Ethiopia is also hiring a number of professors, associate professors, and teachers from India to teach at the universities. It is observed that about 400 teachers are teaching at various colleges, universities and vocational training centers in Ethiopia. For example, there are around 95 Indian professors and assistant professors in the Addis Ababa University, about 35 professors in Defence University College, Arbaminch University, Mekele University, Gondar University, Alamaya University and others.8 One feels that this helps a lot in human resource development of Ethiopia. And, of course, many Indian teachers have been involved in Ethiopia since the 1960s. Indian teachers have educated many leaders here. The education sector of Ethiopia has an excellent relation. India has been focusing on human resource development since independence. That is one of the main strengths of India, which, one hope would be rubbed off to Ethiopia through this collaboration.

Senior Andhra Pradesh officials visited East Africa in 2004, where some governments are ready to welcome Indian farmers to till vacant fertile lands.  Kenya and Uganda have already expressed eagerness to receive Indian farmers. Tanzania is also likely to give a positive response. They know that Indian skilled and innovative farmers can contribute to the prosperity of those countries, and the Africans can learn and benefit from the skills of the Indians. The Andhra Pradesh government is enthusiastic about the project, which is expected to bring hope to the lives of more than half a million poverty-stricken farm families in the drought-prone west of the state. Our farmers have been suffering from drought while these African countries have excellent infrastructure and land, but do not have people to farm it. This is a business opportunity for Indian farmers, who are well versed in tropical and arid-area farming. Analysts say the rash of suicides is rooted in the state’s neglect of the agriculture sector. V. Hanumantha Rao, an economist, said, “lack of irrigation facilities and institutional loans to farmers, and there consequent dependence on private moneylenders, has led to the worsening situation. Activists say neglect of the farm sector is nationwide, and this is why suicides by farmers have been reported from most of India’s 25 states and seven union territories over the past five years. Most of the suicides were blamed on mounting debts and crop failure from drought.” 9  India would also provide technical support to the cooperative farms involved in Africa migration project. “Andhra Pradesh government would pay for the travel and cost of rehabilitation of the farmers in Africa. Farmers would be allowed to send their earnings to families in India without any hindrance,” Mr. Reddy said.10
It is observed that the Indian community promotes goodwill and understanding among people in Ethiopia. They are the bridge that makes the two countries come close together. The contribution for the Indian community is very important. The Indian community living here contributes a lot to the economy of the country. Large number of Ethiopians is going to India for education, business, tourism etc. This contact between the two peoples is a great contribution for the enhancement of the relation between the two countries. India has managed to develop a modern agricultural sector within a short period of time. How can Ethiopians share our agricultural experiences in this regard is mentioned in the India’s offer.
Suggestion and Conclusion

The critical need for moving agriculture forward in Ethiopia is underlined by the need to increase food supply to feed a rapidly growing population, to provide employment, income growth to reduce absolute poverty and food insecurity for a predominantly rural-based population. Since Ethiopia has a large pool of unskilled labor, agricultural development can relieve the growing unemployment problem on the one hand and increase in agricultural income on the other hand. A ‘poverty focused’ economic development policy has best chance of success if it is agricultural-led, or if it is based on increasing agricultural productivity that result in food security and the reduction in absolute poverty.

Since food security contains both supply (production) and demand (income) dimensions, there is a need to focus on food production. In this regard, a key policy research identifies the combination of technologies and institutions, which will aspire availability and access to food by local communities and regions in Ethiopia. The prime movers of agricultural development (public and private investment) need to involve in agricultural production and supply to ensure food availability. it includes Indo-Ethiopia investments on:

1. New technology and agricultural research,
2. Human capital and managerial skills produced by investments in schools, training, and on-the-job experience,
3. Physical capital investments in rural infrastructure such as irrigation, dams and roads,
4. Farmer support institutions such as marketing, credit, and extension services.

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 farming like West & South India and Kenya may be implemented in Ethiopia. If successfully implemented, it has the potential to reduce food insecurity, absolute poverty and environmental degradation. Conceptually, an agricultural and employment based economic growth strategy has three basic elements like

1.Agricultural growth requires an appropriate land-saving technology in the form of biological and chemical technologies.

2. The growth in food demand occurs through accelerated growth in rural employment (or increased demand for labor), made possible through scientific agriculture and

3. Increase demand for goods and services produce.

It is important to transform (like India agriculture) subsistence agriculture to science-based intensive agriculture by adopting promising indigenous practices combined with selective use of improved technologies such as inorganic fertilizer, better equipment, improved seeds, and improved soil conservation and agro forestry practices. Improved technologies and use of farm capital is the most promising path to achieve the goals of greater productivity, food security, and sustainability in most agro-climate zones. The capacity of farmers in Ethiopia to purse alternative technologies requires Indo-Ethiopia investments in rural infrastructure, input and output market improvements, land markets, credit policy and promotion of non-farm enterprises such as agro-industry. The challenge is to develop innovative, cost-effective public, private and public institutions (including NGO’s) that support agriculture under a favorable and macroeconomic and institutional environment.

In conclusion, the challenge for eradicating absolute poverty in Ethiopia is best achieved by pursuing an economic growth strategy that transforms the currently low productivity agricultural sector. This challenge can be met by developing Indo-Ethiopia institutions that promote the four prime movers of agricultural development identified earlier in this paper like:

1.      Production of appropriate technologies- produce through public and private investments in agricultural research;

2.      Human capital investments and vocational skills of poor people by investment in private and public schools, training programs, on-the-job experience and health;

3.      Investment in infrastructure like dams, irrigation facilities, telecommunications and roads; and

4.      Investments in farmer support institutions such as marketing, credit, fertilizer, and seed distribution systems.  Each of the above movers is important and complementary. The analysis of this paper underscores the critical need to develop agro-ecology, specific technologies to raise crop productivity, investment in infrastructure and in agricultural support institutions, marketing and credit in order to overcome problems of productivity and remove weak linkages within the rural economy. The paper also implies that success in transforming agriculture along these lines can reduce natural resource degradation, and thereby enable Ethiopia to break out of the absolute poverty-environmental degradation-food insecurity trap on the one hand and strengthen the agricultural policy reforms in India on the other hand.

References

1. Media and Communication Center, Ethiopia, 2004.
2. Ibid.
3. CII India-Africa Project Partnership 2005, Background paper, Delhi, p.26.
4. Ibid, p.11.
5. Ibid,p.25
6. Ibid, p.26
7. Ibid.
8. Media and Communication Center, Ethiopia, 2004.
9. The Washington Post November 13, 2004.
10. Ibid

Agriculture Outsourcing & Food Security: A Way towards Mutual Cooperation

India, Africa & LAC under South-South Cooperation

Dr. Suresh Kumar

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

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

Introduction

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

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

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

Issue of Agriculture Outsourcing

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

Conclusion

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

Figure-1

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

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

Development Aspirations in Contemporary Ethiopia

Dr. Suresh Kumar

Diplomatist. Vol. III No.1. January 2011

Introduction

The basic elements of Homo sapiens and its growth originated in Africa and according to many scholars, the region of ancient Ethiopia (first was Kush civilization) that is known as the cradle of civilization. The Ethiopian history is about man’s heritage of beautiful art and creation that has been known to the rest of the world since earlier times. The archeological evidence from East Africa clearly demonstrates that upright-walking ancestors existed in Africa more than 4 million years ago. Approximately 2.5 million years ago, African ancestors were involved in making stone tools in order to satisfy their daily conditions and the same stone artifacts are found in Ethiopia is known as the Stone Age period. The Kushitic civilization had its own form of writing in place at least five centuries before the birth of Christ. Ethiopia is having the heritage of classical Ge’ez language of ancient Axum Empire by the fourth century A.D. Historically, the fertile soil, adequate rainfall and rivers water supplies of Ethiopia had encouraged the early civilization for the development of agriculture. The practice of ancient old agriculture pattern needs scientific up-gradation strengthening to accommodate the growing population of this region as 82 percent of the population belongs to rural area and about 18% located in the urban vicinity.
Politically, the post 1991 Constitution divides the new Ethiopia into nine Federal States, with a total of 62 Zones, 528 Districts and some 30,000 were das. Addis Ababa, the Federal capital, and Dire Dawa were established as Self-Administrative Regions. The member states of the Federal Democratic Republic of Ethiopia are ‘the Tigray National Regional State, the Afar National Regional State, the Amhara National Regional State, the Oromiya National Regional State, the Somali National Regional State, the Benshangul/Gumuz National Regional State, the South Ethiopia National Regional State, the Gambella National Regional State and the Harari National Regional State’ (Constitution. 1994:25). These regions want to develop according to their needs in a balanced way to promote for the basic amenities of bread, cloth, shelter, education, health, employment opportunities and social security for their region’s people under the federal structure. The requisite practice of Ethiopian federalism should seek a balanced approach of development in the whole country and avoid lop-sided development by favoring a particular region that may develop the secessionist tendencies. Prof. Bertus Praeg highlights the different elements of Ethiopian society and provides broader information to understand the plurality of the society under Table-1 (Bertus Praeg. 2006: 172). This plural society of Ethiopia demands for the pro-people economic policy to strengthen their livelihood. The policy of development and positive investment is the hard core reality for the country like Ethiopia to cater the pluralism in the country. The policy of development in Ethiopia reflects the distance among African countries and its connectivity to the world. The results of recent national election declared on 21 June, 2010 of Ethiopia expresses the clear verdict of what people want from their elected government. Ethiopians demand for the region’s development and a way for sustainable development. This article discusses the development of agriculture sector & poverty eradication, tackling the social issues relating to education, health, infra structure development, employment opportunity and social security to strengthen the federal character of the constitution in real terms.

Table-1 The Configuration of Ethiopian Society

Source: Bertus Praeg. 2006. Ethiopia and Political Renaissance in Africa. 2006. Nova Science Publishers, Inc: 172 (Emphasis mine).

1.  Poverty Alleviation & Agriculture Development
Ethiopia faced several droughts and socio-cultural structural backwardness that needs long-term planning to overcome emergency situations. The government should introduce scientific technology to overcome the drought triggered food insecurity and work for the local communities accordingly. Ethiopian agriculture, second largest sector of investment focuses on Foreign Direct Investment (FDI) since 2004 and received number of projects as mentioned in Table-2. The present government of Ethiopia has 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 that the structure of cooperative farming in 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 Public-Private-Partnership (PPP) related institutions (including NGO’s) that support agriculture establishing pro-farmer environment.

Table-2 Approved FDI by Sector -Investment in Million Birr

* It does not require detailed information as the discussion is focused on agriculture.
Source: Ethiopia: Trade and Transformation Challenges Study, 2004.

Today, Ethiopian government promotes the establishment of various NGOs for their socio-economic contributions and for their development role. This NGOs movement grows under affirmative action policy having set aims & objectives and is rapidly spreading in the country. The strength of agriculture sector is the right way to work for poverty eradication among the majority population.  Ethiopia is looking forward for bilateral, multilateral and regional economic cooperation in the region as a part of its foreign economic policy. But there is a need to keep caution regarding the role of Multinational Corporations (MNCs) that did not bring a fruitful development in Africa. In the long run, most of their policies have become a burden on the development policies of Africa. Following suggestions may help the Ethiopian government to check the MNCs attitude under market liberalization such as:

1.    Public-Private Partnership (PPP) in Ethiopia should be concerned with the relative decline of agricultural production of domestic food and industrial requirements. It is estimated that the use of 33 percent of the total land in Ethiopia is sufficient for the domestic consumption including having food stock for the emergency. The investors are buying land in Ethiopia for agricultural purposes. The sharing of the total produce should be in the ratio of 67:33, where 67 percent should be reserved for the export & industry and only 33 percent should be used for domestic consumption. The suggestion to propose this ratio is that Ethiopia does 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. Prof. Sudhir Kapoor shared his Ethiopian experience during one interview with me that the local people used to sell at a very low price of five-ten fishes for One Birr because of lack of cold storage facility.
2.    Ethiopian 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.

Ethiopia needs to diversify the agricultural production and should introduce the non-agricultural activities for income generation and promote the food security. The Agro-industry will initiate the rural non-farm employment in Ethiopia that will check the mass migration from rural to urban areas in search of employment. Agro-industry should introduce poultry, piggery, milk diaries, horticulture, floriculture, mustard pressing machines for producing vegetable oil, flour mills, small-scale domestic cotton industries and others. Along with it, the agricultural extension services should strengthen the irrigation system and canalization, introduction of scientific drought-resistant seeds and green environment fertilizers. These programmes directly benefits the peasants particularly small land holders and fight against food insecurity. Along with it, the Self-help groups (SHG) should educate the rural population in the villages about the need of building infrastructure, resource conservation and increasing farm and non-farm production to achieve food security. The SHG need to focus on employment generation and the related training programmes to strengthen the local level production and its utilities. Following suggestions will help to strengthen Ethiopia’s programmes for poverty alleviation and food security such as:

1.    The resource mobilization of Ethiopia should be from the domestic, regional and international markets. The government should be committed to raise the budgetary allocation to agricultural sector to shape economic growth positively. The government 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. It should persuade for intra-African trade serving common man’s needs.
2.     The population growth needs to introduce more agricultural land and introduce applications of Science & Technology (S&T) in Ethiopia.  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 its 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 Ethiopia. It will strengthen market based land reform and give more bargaining power to the community farmers that were lost its relevance during the Mengistu regime.
4.    The scientific agriculture system will persuade and promote the farmers to join agriculture education, literacy programmes and other awareness programmes. Moreover, introducing agriculture extension is an important component of agriculture universities here that will help Ethiopian Agriculture Education System to produce Agro-Scientists on that one hand and strengthen scientific agriculture pattern in rural areas on the other hand.
5.    Different programmes likeai Dry Farms, Poultry, Piggery, fisheries, Sericulture, Horticulture, Floriculture and Shrimp & Prawn cultivations should be introduced here 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. The banks should strengthen micro-finance and SHGs in agro-industry.
6.    Ethiopia needs more agriculture scientist and practitioners, who will help its 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.    The government 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 the NGOs & SHGs should motivate local people to use it. The long war of twenty years in Ethiopia destroyed the green environment and the people should be educated to plant private trees in their fields or surroundings for better environment.
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 along with SHGs & NGOs 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.

India and Ethiopia Agriculture Partnership

It is observed that the Indian community has been involved in sectors like 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. This counters the allegation of food piracy against India. ‘The Tata group has been given  land lese in Uganda to run a pilot agricultural project, while the Jaipurias of RJ Corp have a lease of a 50-acre model dairy farm. The latter is already active in dairy products in African markets such as Uganda and Kenya. Construction major Shapoorji Pallonji & Co has acquired the lease for 50,000 hectares of land in Ethiopia and may look at agricultural projects in future. And it’s not just large Indian companies, small and medium enterprises in sectors ranging from spices and tea to chemicals are looking at entering the commercial agriculture space in Africa. There are roughly about 70 Indian companies which are already in the process of making a foray into the farming sector in Africa. The countries which offer big opportunities include Ethiopia, Malawi, Kenya, Uganda, Liberia, Ghana, Congo and Rwanda’ (Indo-African Business. May-July 2010. EXIM BANK: 31).
 

Annexure-1

Source: 4th CII-EXIM (Bank) Conclave on India-Africa Project Partnership, 19-21 March, 2008.

The Ambassador of Ethiopia in India Ms. Gennet Zewide explained it and said, “Talking about India’s part, India is now moving its economy is growing and there are many investors, agriculturalists and capitalists who want to go outside India and look for a greener pasture. The reason is obvious i.e. now they have the technology, company, capital and of course capability. Thus, there is a supply from India’s side and there is a demand from Ethiopia’s side. Ethiopia offers a very good investment and business opportunity. Furthermore, the economy of Ethiopia is being liberalized because of the democratization-taking place and so it is a suitable investment destination. It is a time when all are looking towards Africa. Apart from the fact that we are attracting investors and visitors, Indians themselves want to invest outside India. This in turn results in a happy medium and a closer relationship. For the last three years, Indians in Ethiopia have invested approximately 4 billion USD. Recently, Indians have become the dingle largest number of investors in Ethiopia. Now, India is coming into agriculture, agro processing etc. In the coming few years, I visualize they are also coming to medium and small-scale industries as well. Once, the growth is in flow, I am sure our input from Ethiopia will be great. But, from India, we import anything and everything-food items, electric items-because our industry has not developed yet. As we become more and more agriculturally efficient. We can also export pulses and other agricultural products from Ethiopia to India” (The Times of Africa. 2010: 35).
The academic circles on Ethiopia 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 destitute 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. 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).

Ethiopia Agenda for Development
The government needs better hospitals in the whole country to provide secure & healthy life to all. It needs the development of health sector and small and medium enterprises. But there is lack of local skilled man power to run the hospitals and needs assistance from PPP in the development of health sector. “We felt that it will mutually benefit Ethiopians and the Indian private sector if they come to Ethiopia, especially Addis Ababa, and open branches, so that they attract not only Ethiopians but also other Africans. Addis Ababa, a city of 3.3 million, is also home to a substantial number of foreigners. It is the headquarters of the African Union and other international institutions. A memorandum of understanding is being drafted and may be signed soon between India and Ethiopia,” said Redwan Hussien, head of the delegation said recently during his visit to India (Ethiopia Medical. 2010: emphasis mine).
The School, College and University, medical, engineering, agriculture & veterinary, sciences and social sciences require a new orentation under Ethiopian education pattern. Ethiopian government should persuade the friendly countries around the world and sign memorandum of understanding (MoU) on the education exchange programme. By that way, the Ethiopian government will get the best educationist on deputation from the friendly countries and develop their own curriculum to strengthen their education system. The new Ethiopia education policy should be put under public domain, prepare curricula in respective desired disciplines, invite the best educationist and debar the entries of private placement agencies to recruit the teachers right from school to university system. The recruitment through placement agencies is criticized in the mass media time to time as they adopt the sub-standard recruitment methods and encourage the financial corruption. There is a need to curtail these tendencies to secure the future of Ethiopian child on the one hand and to initiate government to government MoUs that will strengthen Ethiopian education policy on the other hand.
There is an urgent need on priority basis to build infrastructure and connect all regions of Ethiopia. This infrastructure includes dams for generating power and its supply to electrify all villages, development of highways, roads, connecting sub-ways, tele-communication, building schools, colleges, universities, medical, engineering, agriculture, veterinary institutions and others. The development of infrastructure will promote other activities and will be the source of additional income for the government and generate employment opportunities. Ethiopia having rich history is an attractive tourist area. It is one of the few countries in Africa which has both historical and natural tourist attractions. Ethiopia has the lower temperature range and has excellent weather conditions through out the year, hilly terrain, wonderful scenic beauty and wildlife. Ethiopian Airlines (ET) operates an extensive network and currently caters to 60%-70% of its passengers transfer through its Addis Ababa hub. ‘It expects to transport around 3 million passengers this year, up from 2.8 million last year. Cargo remains an important part of its business, generating 18% of total revenue. He said it is considering operating 777 freighters in the future’ (Ethiopia Airlines. 2010: emphasis mine).
Though there were attractive places, tourist facilities were like hotels, resort area etc. have not been developed to the international standard. The policy of Ethiopian Government is to make tourist facilities like hotels, infrastructure like the roads available for tourists for easy transit to these historical and natural tourist places.

Conclusion
Today, the evidence is at best inconclusive on whether technology transfer contributes to growth and poverty reduction in Ethiopia.  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 Ethiopian 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 Ethiopia towards self-reliance in food industry necessary for attaining sustainable development and growth.

Note
The author would like to acknowledge the assistance rendered by Dr. Rashmi Kapoor, Assistant Professor, Department of African Studies, University of Delhi in the preparation of this paper.

References

Constituion of the Federal Republic of Ethiopia. 1994. The Government of Ethiopia Press. Addis Ababa.
Bertus Praeg. 2006. Ethiopia and Political Renaissance in Africa. Nova Science Publishers, Inc.

Dean Nelson. 28 June 2009. India joins Neocolonial rush for Africa’s land and labour, www.telegraph.co.uk: accessed on 28 July 2009.
Ethiopia Medical. http://www.aend-ethiopia.com/2010/06/20/89/: accessed on 11 October 2010.
John Heine. 14 July 2008. India and the new scramble for Africa. The Hindu. English Newspaper. Delhi.
The Times of Africa. July 2010-September 2010.  Volume-2 Issue 3. Magazine. Delhi
Your Partner in Progress. March 2008. Overseas Infrastructure Alliance. Delhi.
Ethiopia Airlines. http://www.aend-ethiopia.com/2010/06/20/ethiopian-moves-to-broaden-foothold-in-africa: accessed on 11 October 2010.

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About Author
The author serves as Head, Department of    African Studies, University of Delhi, India. He is the Chief Editor of Africaindia.org https://africaindia.org) & Indian Journal of African Studies published by University of Delhi and has traveled widely in Asia and Africa for research and teaching assignments. One book and two chapters in different books, 93 articles in leading journals, book and African Newspapers add to his contribution.

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 18^th and early 19^th 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 andUSA 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 inTanzania 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 inAfrica 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 (Maliand 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 ofZambia 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 (inZambia). 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 inAfrica 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 inAfrica 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.

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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.

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 ofFish 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 Africaproduces 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.
• Kenyahas 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 inAfrica.
• 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:

1. 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 inEastern 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.
• Opportunityfor local manufacturing of attractive packaging for fruits and vegetable.
• Irrigation schemes for commercial farm to ensure harvests throughout the year.

1. 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.

1. 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 ofFood 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 inUganda, 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 andMobile 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 withBurkina Faso business community.
• Low cost of labour.
• Good infrastructure (telecommunication, roads, railways and airport) and services.
• Strategic position in the heart ofWest 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 9^th International Trade Fair of Lome from 25^th 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).

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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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References

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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’ inAfricausing its agriculture land to cater Indian population at home?
2. How best canIndiawork 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. Indiaand 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) inAfricais 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 amongPPP.

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 andAfrica’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 withAfrica

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 inBurkina 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 inEthiopia

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 inGhana

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 inSenegal

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 inUganda

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
7. Angola-Ithas 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’.
8. 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.
9. Cameroon-The Government is stressing upon ‘PPP to promote farm productivity and Indian private investors could supply equipment to small farm holders’.
10. 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.
11. Mozambique-Ituses 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.’
12. SouthernSudan–The government offers policy of concession for ‘private companies to initiate affirmative business atmosphere that is conducive for Indian companies to take a lead’.
13. 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).
14. Tanzania-Zanzibar, part ofTanzania 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 ofS&Tin 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 inAfrica. It will strengthen market based land reform and give more bargaining power to the community farmers as it is successfully working in some states ofIndia.
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 inAfricaas 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. Africaneeds 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 throughPPPto 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 & promotetoday’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.

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End Notes

1. Escorts, Sonalika, Eischer, HMT, International Tractors, Mahendra & Mahendra, etc. are the largest producers of Agricultural equipments inIndia.
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 inAddis Ababa and in his paper presentation on Indo-Africa Trade & Investment in Agriculture Sector: Development & Mutual Partnership, 2^nd 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 5^th Conclave on India Africa Project Partnership 2009, ‘Celebrating Partnership’, 22^nd -24^th 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 5^th Conclave on India Africa Project Partnership 2009, ‘Celebrating Partnership’, 22^nd -24^th 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, 3^rd 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

* 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

Source: www.fao.org

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

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

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