India is toying with the idea of farming out its farming industry.
A report in The Economic Times, the country’s leading business publication, says the government plans to buy huge tracts of land abroad to grow pulse crops and oilseeds.
According to the article, targeted countries include Myanmar, Brazil, Argentina, Paraguay, Canada and Australia. Talks have been initiated with Myanmar’s government, which has already begun upgrading its port for better sea links with India.
Pulse Canada has been approached by the Indian government to provide its thoughts on the ambitious food security plan.
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“The discussion was at a very preliminary level. It’s looking into it as opposed to decisions are imminent,” said Gordon Bacon, chief executive officer of Pulse Canada.
Details are sketchy on what exactly is being proposed but Bacon’s impression is that the government wants to either purchase agricultural land or take out long-term leases.
India is Canada’s most important pulse customer. The country bought 1.2 million tonnes of peas from Canada in 2007-08, up 26 percent from the previous year.
But Bacon doesn’t see the move to become more self-sufficient in pulse production as a threat to Canadian exports.
“What I viewed it as was recognition that Canada is an important supplier,” he said.
Buying or leasing Canadian soil isn’t the only way India can assure supply. Government officials have repeatedly expressed interest in entering into some type of long-term supply agreements with Canadian exporters. There is also potential for India to follow Turkey’s lead by investing in Canada’s pulse processing sector.
Pulse Canada informed the Indian government officials that the extreme scenario of the country trying to fill its regular Canadian import program with Indian-owned land would require millions of acres of land that would be subject to the vagaries of disease, drought and frost.
There would also be regulatory obstacles to overcome in the form of provincial and federal foreign ownership or partnership laws.
“It raises questions of how viable that option is versus continuing to purchase in the marketplace,” said Bacon.
In his daily newsletter, market analyst Larry Weber suggested India would need to add 2.47 million acres of land to become self-sufficient in pulses.
Bacon said it is unclear how much land the government is interested in acquiring, whether it would be local or foreign farmers growing the crops and when the purchasing would start.
It is clear is that with an ever-expanding population and rampant food price inflation, India’s government is doing everything to get its hands on more pulses, which is a staple food ingredient for its citizens. And no matter how you look at it, that bodes well for Canadian growers.
“India will be bringing in pulses from Canada for the foreseeable future,” said Bacon.
