Government mulls private purchase of farm land abroad

Discussion in 'Economy & Infrastructure' started by nrj, Mar 5, 2012.

  1. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    NEW DELHI:The government has decided to throw its might behind private purchases of farm land overseas to ensure food security for India.

    The agriculture ministry has sought views from other ministries on an institutional mechanism to extend sovereign support to India Inc's acquisition of farm land abroad that could include guaranteed buyback of harvest from the cultivation overseas.

    Agriculture secretary PK Basu said that the proposal is in a nascent stage. "We had asked Indian Institute of Foreign Trade to conduct a study. As of now there is a debate going on whether the government should get into it or not," he said without revealing if a concrete proposal is under consideration.

    However, another senior government official confirmed that the proposal had made progress. "The government may set up a separate cell to facilitate transactions," he said. In fact, the food ministry already has plans on the ground to begin cultivation overseas.

    "Already, ministry of food processing is planning to set up a food processing cluster in Africa covering 4-5 countries with investment of around 120 crore," the official said.

    India is faced with a big deficit of pulses and vegetable oil, making it vulnerable to price shocks in the global market, at least in the case of pulses.

    After dropping in 2010-11 to 2.69 million tones from 3.51 million tones in 2009-10 because of a bumper crop, import is expected to rise to 2.8 million tonne this year because of steadily rising demand. India is the biggest buyer of pulses with over 15% of buys in the global trade.

    In Africa there is great potential of cultivating pulses even on waste land. It will be a great ploy to harvest pulses in Africa to put off pressure on pulses import, said Jaishankar Mishra, agriculture scientist. Economists say that land can be bought in foreign countries but the process has to be handled with utmost care.

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    "Land can be bought in Africa and production of pulses and wheat can be carried out....however the process can be questionable as it can be seen as land grabbing," said Ashok Gulati, Chairman of the Commission for Agricultural Costs and Prices, a body that recommends minimum support prices for various crops. "This has to be handled delicately," he added,

    Yes Bank's vice president and country head for food and agriculture, Girish Aivalli said that all countries are looking to set up producing zones outside their geographical boundaries to fight the climate change related volatility in price and production of farm produce.


    "If there is some kind of government support to private firms, banks will also provide lending support at easier terms," he said. The bank has so far advised four to five firms for such deals abroad.

    BV Mehta, executive director of Solvent Extractors Association said that any support from the government is more than welcome. "We are buying land in Uruguay," he said.

    The association has formed a consortium of vegetable oil companies to acquire lands in Latin America to grow soyabean and sunflower.

    India is dependent on imports for nearly half of its edible oil needs. India's vegetable oil imports rose 17% to $6.6 billion in 2010-11. The move comes on the heels of the new mineral asset acquisition policy approved by the government in October 2011.

    A working group on agriculture production chaired by Haryana chief minister BS Hooda, had also recommended that Indian companies could also be encouraged to buy lands in other countries for producing pulses and edible oils.

    Food Security: Government mulls private purchase of farm land abroad - The Economic Times
     
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  3. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    seriouslly stupidity once they would by then in name of mismanagement they would then sell it in cheap to private bodies

    second this GoI does not allows development here in name of environment AND OTHER STUPID REASON AND THE GOES FOR SHOPPING FOR MINERALS IN OHTER COUNTRIES WASITING RESOURCES/MONEY

    why doesnt create environment here itself in india that would facilitate growth in agriculture as well as manufacturing sector
     
  4. Tolaha

    Tolaha Senior Member Senior Member

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    Taking up land in faraway countries - India has entered this race from a long time. Though government isnt directly involved, its 'assisting' private companies to lap up lands in Africa, S. America and even SE Asia. The world's largest land holding is by one Karuturi Global, with a huge land bank in Ethiopia as well as Kenya. Edible oil companies have been taking over palm plantations in Indonesia and Africa. Sugar companies have taken stakes in Brazil. This has been going on from some time and all with the backing of government financial institutions.

    Almost impossible in India. With the kind of issues -shrinking size of land holdings, people's emotional attachment to land, cultural issues etc - faced in India, mechanized large scale farming is just a dream.
     
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  5. trackwhack

    trackwhack Tihar Jail Banned

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    Good move, though leasing would be better than buying as it does not sound as bad.

    Anoop, I'd rather that GOI went shopping outside India and left local growth to private entrepreneurs. Most of our arable land resources sustain the 700 million rural population in the country. Corporate farming in India would be a disaster. Farmland consolidation will happen in India at its own pace when subsistance farmers sell out and move to urban areas chasing jobs. The current pace and policy being set through the recent Manufacturing policy is great. Else we will end up in a similar situation like in China where there are 300 million migrating workers who dont have a permanent residential status in the urban area that they come to work. Neither do they have permanent jobs. China's urbanization is a seasonal one. That is not desirable.

    Over the next 20 years, if our permanent urban population becomes 40-45% of total population, rural farmland ownership per capita could almost double. Larger farms = more prosperous farming households = more service jobs in rural areas = more sustainable and happy rural economy.

    GOI should not encourage private firms in India to buy farmland within our country as we do not have the scale to send 200 million of our people to urabn areas for jobs as of now. That will be a gradual affair. GOI should indeed look at procuring farmlands abroad where there is massive under utilization and low productivity in really rich farmlands. If done well our political stake and good will should also benefit in these countries.
     
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  6. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    People are n`t emotional attach to their land but they want fair in return to their lands begin taken away. gov forecably acquires land in name of development at throway prices and then now development occurs for days and that land is sold/leases at cheap price to buliders/developers/co-orparates who earn huge profit by selling it a higher price.

    that happened in UP , that happens everywhere in INDIA
     
  7. Tolaha

    Tolaha Senior Member Senior Member

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    Industrial projects, expressways, power plants - all require huge and continuous land parcels. And all that it takes to hit any project hard is one or 2 people who are unwilling to give up their land. More often than not, this is due to emotional reasons. Nothing wrong in being in love with your ancestral land, but its just that it puts a brake on project executions.

    As per regulations, government cannot take away land from people at lower than market values. Problem arises when people demand prices above that the land would command after the project gets successfully executed.

    I do agree with you that those cases where in developers/corporates take land away from farmers only to sell it at a higher price with no addition whatsoever is disheartening. To overcome this, probably its a better idea for government to create land banks rather than private entities..

    But as far as large tracts for farming is concerned, this is still not achievable. Maybe co-operative farming is the way out. But I doubt that it could be successfully implemented on a grand scale.

    Looking at these issues, I think its a great idea for the government to support private entities to buy or lease land outside the country.
     

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