The Hindu Business Line : Indian firms turn to Paraguay for farming

Win-win situation
Consortium members committing funds to a bank account to acquire land in the South American nation.
Initial investment to be around Rs 75 crore, farming likely to begin by the middle of next year.

Alka Kshirsagar

Pune, Oct 26

The crunch for affordable agricultural lands within the country is prompting Indian business houses to look at off shore farming opportunities, and farming in Latin American nation, Paraguay, is set to become a reality within a year’s time.

A consortium of 12 members has already been formed with each member committing funds to a bank account to acquire land in the centre of the South American continent, and the 13th member to join the bandwagon for the proposed project is the Rs 8,500-crore edible oil refining company and soyabean exporter, Ruchi Soya Industries Ltd.

Consortium

The formation of the consortium follows a visit to Latin America by a delegation of the Solvent Extractors Association during June. Its other members include K.S. Oils Ltd Morena, the Mumbai-based Kamani Oil Mills Ltd and Pranav Agro Industries Ltd, Pune.

Mr Pravin Lunkad, head of the Rs 500-crore Pranav Group of industries and convener of the project Paraguay, says that around 10,000 hectares of land will be acquired in the first phase. “The initial investment will be around Rs 75 crore, and we expect farming to begin by the middle of next year,” he says.

The proposal is dubbed as a ‘win-win formula’ by the consortium members, not the least because 30 per cent of sunflower and soyabean oil imports come from Latin America.

Buying land

“In Paraguay, a foreigner can buy a land, at a cost ranging from $1500-3000 a hectare, it is highly competitive. Also, the climate and soil conditions are such that you can take three crops a year,” Mr Lunkad says.

To boot, the Paraguay Government grants a visa within a day from Delhi, allows permanent resident status after three months of stay and grants you nationality after a year, he adds. The farming proposal also has potential for forward integration of oilseeds into processing complexes.

The idea for the project, Mr Lunkad explains, came when the visiting delegates were told that post World War II, 400 Japanese families were sent to Paraguay, and acquired 90,000 hectares of agro land to hedge against food grain shortage in the mother country.

A two-member team from India, including one agronomist is leaving for Latin America on November 18 to undertake feasibility studies. The objective this time round is to bridge the gap of India’s edible oil requirements.

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