India Won’t Scramble for Africa
Indian agriculture minister, Sharad Pawar, earlier this month declared the Indian government had no plans to buy farmland abroad or even help private firms do so. The government hadn’t taken up the issue and there was no proposal to do so. I actually don’t take this unseriously because the evidence points in this direction: India has no strategic plan to buy land overseas for farming purposes. And any assistance by New Delhi to private firms has been in the form of diplomacy and not tangibles.
So far, when I put a microscope to Indian investments in African farm land it is overwhelmingly private sector. MMTC
is the only state enterprise that I could find that had done a farm land buy in Africa. There are possibly others, but they will represent a small fraction of such purchases.
There are those who will argue that it doesn’t make any difference. If you’re basically against peasants losing their land to foreign businesses, whether by fair means or foul, then yes India is cut from the same cloth as Cecil Rhodes and China.
But there is a huge difference between a state owned firm buying land and a private firm doing so. It is the difference between , if you wish, imperialism and foreign direct investment.
First, private firms are driven by profit and commercial logic. State owned firms can be, but it is not always clear or obvious that they are. Non-commercial motives can and often do enter the motives of state-owned firms, especially China. Ultimately they are more political.
Second, private firms are far more subservient to the requirements and demands of the host country. This is especially true for Indian firms which are generally quite small. The days of United Fruit controlling Honduras are gone. A private sector Indian firmwill accommodate the demands of the local African government and quite happily ignore diktats from India.
Third, specific to farm investments, the agricultural produce will not necessarily go to the homeland of the foreign firm. Normally it will go to where the firm can make the most profit. This often means the West but can mean the local African population. Which is why it makes only minimal sense for the Indian government to sponsor such investment — the food security gains may well be zero.
Boiling it all down and the case for saying FDI is that it is done broadly under rules set bythe host government and not the investor’s home country. If the latter is powerful enough, this can change. But Inda isn’t, its state is unusually weak, and this is even more so when it comes to places like Africa where Indian influence is nascent.