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Indian firms find Africa fertile ground for contract farming by Utpal Bhaskar and Shauvik Ghosh

State-owned trading firm MMTC Ltd, the Indian Farmers Fertiliser Cooperative (Iffco) and the conglomerate Bharti Enterprises plan to join the growing number of Indian entities engaged in commercial farming in Africa.

Cheap land and labour costs in Africa are attracting a number of Indian firms with interest in agriculture. A large number of people in East African countries such as Kenya work in the cultivation of tea, coffee, corn, vegetables, sugarcane, wheat and fruits, among other things.

India imports around 8 million tonnes (mt) of edible oil worth Rs.26,000 crore every year and 3.5 mt of pulses worth Rs.14,175 crore.

MMTC is keen to grow pulses in Africa to meet shortages at home.

“India has a perpetual shortage of pulses... At present, black-eyed pea and pigeon pea is coming from Myanmar, which is a very unstable market,” said H.S. Mann, MMTC’s director of marketing and acting chairman and managing director.

“So we want to diversify in countries such as Tanzania, Ethiopia, Kenya, Malawi and Mozambique. We are looking at avenues such as government-to-government procurement, contract farming and long-term assured procurement,” he said.

MMTC plans to start off cultivating 2 mt of pulses in Tanzania and Kenya, he added.

On 4 August, Mint reported the Adani Group’s plan to set up farms in Africa, Brazil, Argentina, Indonesia and Malaysia to cultivate edible oil and pulses.

“We are looking at Africa for agriculture opportunities in contract farming. We are yet to finalize anything,” said U.S. Awasthi, managing director, Iffco.

Rajan Bharti Mittal, vice-chairman and managing director, Bharti Enterprises, said Kenya’s ministry of agriculture has invited Indian farmers to cultivate local land.

“There is a discussion which is going on,” Mittal said in the Kenyan capital of Nairobi on Thursday, where he was attending an India-Africa partnership conference called Namaskaar Africa, organized by Indian business lobby, Federation of Indian Chambers of Commerce and Industry (Ficci).

Bharti Enterprises is already present in Africa through its telecom firm Bharti Airtel Ltd, India’s largest telecom service provider, which acquired Kuwaiti telecom firm Zain’s African assets in a $10.7 billion deal this year.

Responding to a specific question about Bharti Enterprises’ agriculture plans in Africa, Mittal said that Kenya’s invitation was currently to the government of India and that private investment by Indian firms could follow.

He said India and Africa are taking their links beyond manufacturing and services. For both regions, “food security will become the (main) issue over a period of time and I think we need to take the next step forward”.

Bharti Enterprises has a joint venture with Del Monte Pacific Ltd through which it farms 5,000 acres in the Indian state of Punjab. The joint venture produces, locally distributes and exports fruits and vegetables to the UK, West Asia and South-East Asia under the FieldFresh brand.

“Agriculture is one of the seven priority sectors of India’s engagement with Africa.... We import pulses and we will be more supportive of more land being brought under for cultivation and for value addition and India is the market,” India’s commerce minister Anand Sharma told reporters at the same conference.

“India is a big market. We are already importing, so I am sure that India can absorb that production,” Sharma said.

He added that India is food sufficient. “What we import in India is only pulses and edible oil.”

India has long-standing ties with many African nations, forged by its support for their independence movements. India and China, the world’s fastest growing major economies, are also racing to acquire stakes in hydrocarbon blocks in Africa and elsewhere to meet rising domestic power demand.