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Resource centre on India's rural distress
 
 

Arabian Delights by Debarshi Dasgupta

That Indian firms, some of them backed by the government, have gone scouting for land abroad to farm crops for consumption back home is well-known. Reversing the trend, now many Gulf countries are getting a toehold in India that will allow them to farm here and export the food back. A Bahraini firm, the Nader & Ebrahim Group (NEG), recently tied up with Pune-based Sanghar Group to do exactly that. Countries in the Gulf region, extremely deficient on arable land, are looking abroad to grow their food. India is where many are headed.

Beginning with bananas (India is the largest producer), Sanghar has contracted farmers to grow the crop on their land—a total of 400 acres in Maharashtra—under supervision for consumers in the Gulf, European and north African markets. So far, 2.6 million kilos have been exported. Keeping long-term objectives in mind, the two have also formed a 50:50 joint venture to form a group called Dana Fresh. The group later wants to cultivate pineapples, grapes, pomegranates and sugarcane (to be processed into sugar for export since India has banned export of sugarcane) and also rice. A partner in Sanghar, Jital Shah, stresses that they will abide by all the necessary rules that govern agricultural exports, especially when it comes to rice and sugar. “We are just doing bananas now. Rice and sugarcane are part of the bigger plan for later,” he adds.

This scenario, where even important food crops are grown exclusively for foreign markets, has become plausible after Planning Commission deputy chairman Montek Singh Ahluwalia, on a visit to Muscat last December, gave an interview to an Omani paper where he stated that India was open to the idea of Omani firms farming in India through domestic partners. “Indian law does not allow foreign companies to buy land so therefore Omani companies can enter into a contract farming relationship for producing the type of crop they want,” he told Times of Oman. Such an arrangement will also include rice, part of the staple diet in Gulf countries. “We feel there is scope for bringing Omani investment into (India) for producing rice through the contract farming system,” Montek had added. But why promote this, especially now when prices of most food crops have hit the roof? Montek chose not to respond to an e-mailed questionnaire sent to him over 10 days ago.

Shah, meanwhile, says better techniques introduced by NEG have helped increase yield from 27 tonnes per acre to about 30. But Shalini Bhutani, an agricultural researcher who has studied global ‘land grab’ deals, says such arrangements are more about “organised business development rather than rural development”. “This reduces farmers to being just bonded growers rather than people having food sovereignty. This also goes against what many of us have been arguing for—relocalisation of food production and distribution, which means consumption of locally grown food... which makes sense climatically and socially.”

Critics also say foreign contractors are more interested in exploiting the “land to the hilt”. Devinder Sharma, an agricultural analyst, points out that such deals, whether for fruits and vegetables or for more important crops like rice and sugarcane, end up diverting land that should be used to reinforce India’s food security. He says Montek’s statement is “very dangerous”, allowing the “food pirates to come in”. But shouldn’t farmers have the choice to sell to the buyer who provides the highest price? Sure, says Sharma. “But in that case, we should be prepared to go back to the pre-Green Revolution days of our ship-to-mouth existence. Are we ready for that?”