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Land grab in Ethiopia backfires

June 5, 2015

By Akshat Kawshal, Business Standard
Baljinder Singh, a farmer dressed in a crisp white shirt and trousers, clutches the latest iPhone in his hand, drives a new Maruti Suzuki Swift and agrees to meet me not under the shade of a tree in his farm, but in the air-conditioned lobby of an Amritsar hotel. The corporate air is in sync with his latest plan: a milk distribution business across Punjab.Punjab farmers who went to Africa
It’s only when you mention Africa and Georgia that his confidence begins to waver.

Like hundreds of farmers from the state, Baljinder had gone abroad in search of a better life, only to return empty handed. “People went mad over Africa and Georgia and the travel agents made a killing. And now those people are just sitting there doing nothing, waiting for some gullible Punjabi to arrive to whom they can sell their land to recover their investment and return to India,” he says.
Baljinder, 36, recounts how he got bowled over by the idea of Ethiopia. In 2011, he read in a newspaper that India had signed an agreement with Ethiopia to allow Indian farmers to take land on lease in the for farming African country.
Though he owned 150 acres in the Tarn Taran district, Baljinder was looking to expand, but was deterred by the high land prices in the state. What he saw in the newspaper excited him. Baljinder contacted the Ethiopian Embassy in Delhi to get more information, but little was forthcoming. Around the same time, he noticed an advertisement in the local newspaper inserted by Karuturi, a Bengaluru-based company, inviting farmers to Africa.
Karuturi owned around 300,000 acres of land in Ethiopia. Baljinder went to a seminar it organised in Chandigarh. (Karuturi was one of the several companies that had bought vast tracts of land in Africa and South America. Many of them needed Indian farmers to grow crops for them as the locals were unwilling to partner them.)
At the seminar, Baljinder met farmers who were also looking to go abroad and farm; one of them was Ambala-based Puneet Singh Thind, 32, who had done his MBA in international business, but preferred agriculture over a corporate life. They became partners and began studying the feasibility of farming in Africa. They also managed to bring together more like-minded farmers.
In the second half of 2011, around 15 farmers, including Baljinder and Thind, flew to Ethiopia to see the land for themselves. The fields they saw was not much different from Punjab, except the soil was more clayey, like the black soil found in India’s Deccan plateau.
Still, they were confident that they could make money there. But they needed more men. After 15 days, they returned to India and went back soon after, this time with a group of 50 farmers. They took the land on lease from Karuturi for Rs 25 lakh. All farm equipment was imported from India, including tractors.
The challenges began to show up almost immediately. Their land needed water, but there were few irrigation possibilities, and diesel for their tractors was available only at a considerable distance. It soon dawned on them that unlike in India, where they took government support (subsidised power and fertiliser, easy access to pesticides) for granted, they were left to their own devices in Ethiopia.
Even the market was missing. “During the first year, we grew maize but there were no buyers. I sold the crop by driving the tractor from village to village as there is no concept of a mandi there,” Thind says.
They stayed in Ethiopia for around a year. When nothing worked, they looked for other countries in Africa, one of which was Benin. “We always look for land,” says Baljinder’s friend, Hardeep Sandhu, 46. “We start by searching on the Internet for places where agricultural land is available. We look for a place that is cheap, whose climate suits our kind of agriculture (which is conducive for growing cereals) and which easily grants a visa.”
It was through such internet searches that Sandhu spotted Benin. “You can’t imagine how excited I was to start farming in Benin. Within a few days, I had leased a house, bought a car and even hired a translator. I saw the land, liked it, and decided to initially lease about 2,500 acres at $2 per acre,” he says.
But just before Sandhu could sign the lease agreement, the police chief called him. “He told me I would be foolish to invest my money here. I asked him why. He said you can grow here but you can’t sell.” Sandhu got the message and left Benin.
After their plans in Africa failed, these hardy men looked towards Georgia. From Africa, they transferred their equipment to that country.
As they moved to Georgia, so did many others from Punjab. Farmers got attracted to Georgia primarily for two reasons. One, it was in Europe. And travel agents convinced them that it was only a matter of time before Georgia would develop like the rest of Europe. Also, for them, Georgia, which was offering visa-on-arrival, could be a gateway to the rest of Europe. Two, land was being sold there at throwaway prices. (Unlike India, most of these countries impose no ceiling on ownership of farmland.)
“There was a lot of excitement about Georgia. We must have sent around 50 farmers there. But things have changed now,” says Satish Kumar, director of Jalandhar-based Crown Immigration Consultancy Services. Kumar estimates around 500 farmers are still in Georgia, while most have returned.
But like Africa, the Georgian experiment failed. Most farmers realised after they reached that their techniques would not work in the cold climate of Georgia. And, as in Africa, people lacked the purchasing power to buy their produce in large quantities.
These farmers found themselves at a loss, as they could not compete with the Georgian farmers when it came to planting vineyards and apple orchards – the crops that suited the local ecology the best. Later, under pressure from locals, the Georgian government changed its policy of giving agricultural land to foreigners.
“A few farmers might have had some success, but most farmers who went to Africa and Georgia have returned disappointed,” says Paramjit Sahai, senior advisor at Chandigarh-based Centre for Research in Rural and Industrial Development and former ambassador to Malaysia and Sweden.
Sahai, who was involved in promoting Indian farmers in Central Asia and Malaysia, says the initiative failed because most of these countries lack a well-articulated policy on land which keeps farmers guessing. Indian farmers also lack the experience of farming large lands, as most have small landholdings in India.
Reverses in Africa and Georgia haven’t sapped the enthusiasm of Punjab’s farmers for going abroad to improve their lot. This incessant search for farming opportunities stems from the lack of opportunities in Punjab and the high price of farmland in the state, especially in areas close to ever-expanding towns.
“In Punjab, the average rate of land is Rs 30-35 lakh an acre. This goes up to around Rs 1 crore if you are buying land near the city. As compared to this, in Ethiopia we got 2,500 acre of land for an investment of around Rs 25 lakh. In Georgia, the land was being sold at just Rs 20,000 an acre,” Baljinder says.
What also must have worked on their minds is that farmers from Punjab have gone abroad for many generations – and made a success out of their ventures. “Even if you reason with them to not go, they won’t listen… Everyone has an uncle who struck gold abroad and in whose footsteps they intend to follow,” Sahai says.
That Punjab has a strong ecosystem for migration makes things easier. Every few decades, travel agents in Punjab sell a new destination. In recent years it was Africa and eastern Europe. In the 1980s it was Italy, which was preferred by those who could not immigrate to more developed countries in the West. They were generally from the less privileged sections of Punjab society.
Initially, they went as farm labourers but now form the backbone of Italy’s cheese industry. Unlike the farmers who went to Africa and Eastern Europe, these farmers have done well. So vital are they to the local economy that policemen are ready to overlook their minor misdemeanours, according to one account.
Take the case of Gurudev Singh, who screams at his wife over the phone for allowing strangers inside his two-storeyed home on the outskirts of Chandigarh. The 52-year-old’s home is being renovated. The house’s architecture doesn’t look Indian – it has an unmistakable European feel.
Gurudev’s wife, who does not disclose her name, says it is similar to her home in Italy. Inside, three carpenters are slicing wood for the home theatre’s frame to be hung in the living room. The exterior wall has just been plastered with new tiles. “Where are you from: the government or from a bank?” is Gurudev’s first question. He is clearly uncomfortable with outsiders noticing his wealth.
He belongs to the Maruli Kalan village, around 30 kilometres from Chandigarh. This village, of around 50 houses, is well known all over Punjab because each house here has at least one member in Italy. Most of them work in dairy farms there.
The process began with Gurudev’s brother, Amroha Singh, migrating to Italy in the early ’80s. Villagers say Amroha was an idler until he migrated. Once there, he worked in a circus doing menial jobs like putting up tents and feeding animals. His employers were impressed with his work and the low pay he demanded, and asked him to bring more people like him. He called his brother, and soon most of the village migrated.
“I did my BA from a college in Ropar … In 2007, I decided to leave for Italy after finding no respectable job here… You might wonder why a graduate is milking cows. It is because there are no jobs here and I get paid around Rs 1 lakh a month in Italy,” says 34-year-old Gurpreet Singh Chahal.
Chahal is somewhat of an exception in this village: others are less willing to talk. As Chahal explains, it is because they are embarrassed to confess they work as farm labourers or dairy workers, despite owning rich land in Punjab. Unlike those who went to Africa or Eastern Europe, those like Chahal have never owned land in Italy.
But have those who tried their luck in Africa lost hope? No, they say. “The land I saw in Africa has a lot of potential,” says Baljinder. “It is so fertile that for two-three years it will grow without any fertiliser.” Thind and Sandhu agree.
All three suggest two solutions to promote Indian farming in Africa: one, the Indian government should assure them that it will take care of them if a security situation arises. Two, the Indian land-owning corporations and the African governments should ensure their security by giving them private security guards. “The night I slept in a Chinese farm in Ethiopia I never felt safer in Africa,” says Baljinder. Another lesson from across the border?

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