Indian Private Agro-Investments in Zambia: A case study | Foreign Direct Investment | India

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Agricultural relations between India and Africa go back for well over forty years. As a lack of natural food resources and continuous damage caused by climate change has diminished India’s food security, the Government of India has decided to privately invest in Africa’s agricultural and entrepreneurship resources, particularly in Zambia. This report provides an example of Foreign Direct Investment (FDI) and outlines India’s outflow and inflow of investment revenue from the 1990’s until the present. It reviews where, in terms of investment, the agricultural sector in India finds itself. Following a field visit by Oxfam India to Zambia, this paper shows this African country to be an ideal area for farming and lists multiple Indian stakeholders in Zambia’s agricultural sector. After several India-Africa Summits agreed that it was necessary for investment in agricultural developments to work towards eradicating poverty and improving people’s livelihood, this paper provides proof of the opportunities which cooperation in this sector can deliver to improve global food security.
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  a   Indian Private Agro-Investments in Zambia a case study  b   Author:  Prof. Aparajita Biswas, Policy Research Institute of the African Studies Association and Prof. Ajay Dubey, Policy Research Institute of the African Studies Association Acknowledgment: Dr. Sachin Chaturvedi, Research and Information System for Developing Countries, for his valuable feedback on the draft of this report.April, 2014Supported byOxfam India© Oxfam India April, 2014This publication is copyright but the text may be used free of charge for the purposes of advocacy, campaigning, education, and research, provided that the source is acknowledged in full. The copyright holder requests that all such use be registered with them for impact assessment purposes. For copying in any other circumstances, permission must be secured. E-mail: policy@oxfamindia.org/Published by Oxfam India: 4th and 5th Floor, Shriram Bharatiya Kala Kendra, 1, Copernicus Marg, New Delhi 110001 Tel: +91 (0) 11 4653 8000 www.oxfamindia.orgOxfam IndiaOxfam India, a fully independent Indian organization, is a member of an international confederation of 17 organisations. The Oxfams are rights-based organizations, which fight poverty and injustice by linking grassroots interventions, to local, national, and global polic developments.For further information please write to: policy@oxfamindia.org, or visit our website: www.oxfamindia.org.  Contents Section 1 Introduction to the Study 2Section 2 Overview 4 2.1 India-Africa Relations 4 2.2 Indian FDI Policies 4Section 3 India in Africa’s agricultural sector 10 3.1 Development Cooperation and Agriculture 10 3.2 Indian Investments in Agriculture in Africa 12Section 4 India – Zambia Engagement 16 4.1 Zambian Agricultural Policies 61 4.2 Indian Agricultural Investments in Zambia 18 4.3 Field visit in Zambia 19Section 5 Outline of India Team Research Findings 21 5.1 Methodology 21 5.2 Zambia Development Agency 21 5.3 Zambia Land Alliance 24 5.4 Observations and Findings from the field visit in Zambia 24Section 6 Interviews in Delhi 25 6.1 Promoting India-Africa Economic Cooperation 25 6.2 Beyond Food Security 26 6.3 Indian Investment in Zambian Agriculture 26 6.4 The Other Side of the Engagement 27 6.5 India, a crucial player 27References 29Annexures Annexe 1: What research was done and how 32 Annexe 2: Log of those who responded 33 Annexe 3: List of experts contacted in Delhi 34 Annexe 4: Agencies unreachable 36  2 Section 1: Introduction to the Study Indian scholars are researching various facets of Indian engagement in Africa at present. Most of these studies tend to examine issues at a pan-Africa level, often addressing broad questions. This is primarily due to two reasons: one, African studies as an important geopolitical subject is beginning to gain traction; and two, the amount of data available to conduct an issue or country-specific research is negligible. This could be attributed to the lack of funding to carry out focused studies. In such circumstances, the opportunity provided by Oxfam to analyse the role of Indian private players in Zambia’s agriculture sector is significant and well timed. The purpose of this study is to not only assess India’s growing footprint in Zambia as an increasingly significant investor, trading partner and donor, but also to analyse the nature and sustainability of foreign direct investment (FDI) in Zambia’s agriculture sector. The study is pertinent from the point of view of India’s larger Africa policy, given that India’s approach to Africa has changed considerably since 2000. Instead of relying on historical goodwill alone to further relations, economic rationale has also been given pre-eminence. Government of India’s (GoI) reinvigorated policy toward Africa emphasises on a sustainable and organic development model. This means New Delhi’s relations with Zambian capital Lusaka will involve helping the country steer away from excessive economic dependence on the extractive sector and focus on the development and promotion of other economic activities such as agriculture. This does not, however, ignore the fact that the post-globalised society in India saw immense potential for its own entrepreneurs in Zambia. The focus on the agriculture sector in Zambia becomes significant not only because it has presented Indian corporate entities with an untapped investment opportunity but also due to the issue of food insecurity in India. GoI has gone on record to state that it is effectively considering private purchases of farm land overseas to ensure food security for India ( The Economic Times , 2012). India’s Ministry of Agriculture has asked its domestic farmers’ associations and agri-business organisations to examine proposals it has received from several countries to farm on leased land in their countries. Countries that have invited India, through the ministry, include Egypt, Ethiopia, Mongolia, Senegal, Sudan, Trinidad and Tobago and Tunisia, among others. “This department is receiving a number of proposals from several countries offering opportunities for acquisition of land for farming by companies, for meeting their commercial objectives, as well as Indian farmers or their conglomeration for taking up smallholdings for agriculture,” states a letter issued in late December 2009 by the joint secretary of the Department of Agriculture and Cooperation, Ministry of Agriculture. The objective of such offers is to increase agricultural production in the respective countries to result in reduced dependence on foodgrain import as well as surplus foodgrain export to third world countries (Goswami 2010). While analysing India’s involvement in Zambia’s agriculture sector, the study covered various aspects. At the outset the Indian players in Zambia’s agriculture sector and the quantum of their holdings were identified. The stakeholders in the sector in Zambia were listed and their role established. Additionally, the impact of FDI on the livelihoods of smallholder farmers, especially rural women, and communities in Zambia, was looked into. The repercussions of inflow of FDI into the agriculture sector in Zambia including the various rewards such as agricultural development and poverty reduction and risks such as forced evictions and increasing conflicts over land and water were examined closely, and other technical aspects of FDI such as the nature, scope, drivers and modalities, assessed. The various administrative and governance structures present in Zambia and India to facilitate these investments were also analysed.This literature review is a first step towards addressing the knowledge gaps present in this domain. This report is divided into four sections. Section 2 provides an overview of India-Africa relations and India’s FDI policy. The overview of India-Africa relations provides a summary of the evolution of India-Africa relations from historical times to contemporary times and the latter provides a synoptic view of the Indian FDI policies pre- and post-liberalisation. The overview lays the foundation for the report.
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