Image credit: pinstopin.com

Image credit: pinstopin.com

A callous group of banking officials and over-enthusiastic ‘agricultural journalists‘ inadvertently joined hands to promote a fictitious ‘successful’ project. The result? Barring a handful of canny promoters, thousands of farmers and investors have gone bankrupt and the industry has ‘grown’ into a multi-crore scam. The plight of the Emu-farms in southern states of India should be an eye-opener to the people who wanted to be rich overnight. Hundreds of farms were shut down and thousands of farmers lost their life-savings. Unable to feed, many farmers simply abandoned the poor flight-less birds in the open. But a few fraudsters moved birds to northern states of India where the news of the scam are yet to reach. Unsuspecting new investors are being drawn in to these ‘ponzi’ schemes. They were lured with the same tried and tested “get-rich- quick” model projects.

Image credit: abc.net.au

Image credit: abc.net.au

The ‘emu farming‘ in India commenced in 1996 by a few  farmers who imported 350 pairs of birds from the USA. Commercial farming of emu birds started near Kakinada in Andhra Pradesh. But it gained momentum when the National Bank for Agriculture and Rural Development (NABARD) published a lucrative business model. This ‘bankable project’ was simply based on a paper presented by an executive of some French company in 1997 at an Indo- French food seminar held in Bengaluru. According to his projection, “a pair of emus can produce 30 offspring per year. These 30 birds can produce meat of 60 pounds each. At the rate of $10 a pound, the meat alone would fetch $18,000 (₹ 9.72 lakh) every year. In addition to that, emus were said to produce hides worth $10,500 (Rs 5.5 lakh) every year, not to mention the plumage value of $1,500 (Rs 81,000). Put together,the gross income generated by a pair of emus would come around ₹16 lakhs a year”.

nabardNABARD neither conducted a study on the financial viability of the project nor had any working model before the adoption of the project. The unverified estimates of profitability were published on the official website of NABARD. This projection by the NABARD, the flagship of Government of India on agricultural and rural development, was more than enough to attract people who yearned for some quick bucks. Hundreds of people used these ‘model bankable projects’ for commercial farming of emu.

Image credit: abc.net.au

Image credit: abc.net.au

NABARD floated a scheme to promote emu farming as early in 2005 expecting a vibrant market. It offered an interest-free loan of ₹ 15 lakhs up to 9 years for a single unit. This unit of hundred emu birds could borrow another loan of ₹ 12 lakhs from other commercial banks. The investor’s share was only ₹ 3 lakhs. The beneficiaries were assured of a waiver of interest on loans up to ₹ 6 laks borrowed from commercial banks if the repayments were regular.

The Department of Animal Husbandry, Dairying and Fisheries of Government of India launched the Venture Capital Fund aimed at promoting poultry sector in 2009-10. And NABARD declared that “breeding farms for low input technology birds like turkey,duck, Japanese quail, emu, etc” were eligible for “back-ended capital subsidy of 25 per cent of the total outlay” under the Poultry Venture Capital Fund (Subsidy) Scheme effective from April 2011. Over ₹10 cr. had been released as subsidy since inception of the scheme.

Emu-face-closeupIf it were some 5000 odd emu-farmers existed in 2011, the number started increasing. Most of the farmers were from Andhra Pradesh followed by Maharashtra and Tamil Nadu. And the emu farming spread to Goa, Gujarat, Karnataka, Pondicherry, Kerala, Orissa, Madhya Pradesh, Punjab, Uttar Pradesh, Haryana, West Bengal, Uttarkhand and Rajasthan. By 2012, the emu population in India was estimated at 1 million of which 45% belonged to Krishna, Guntur and West Godavari districts of Andhra Pradesh.

Meanwhile, country’s first emu processing unit “Vileena Emu Processing Pvt Ltd” would become operational by April 2012 in Krishna District with the back-end subsidy from Venture Capital Fund routed through NABARD. The unit was spread over 22 acres and had an installed processing capacity is 300 birds per day. The emu-farmers were assured of ₹12,600 per bird as the meat would easily fetch ₹800 per kg. They had ambitious plans of an investment of ₹18 crore in Phase-I and ₹ 10 crore in Phase-II. This news gave the emu-farmers more confidence to pursue their operations.

thehindu.comjpgAs the news of the new ‘successful and profitable’ business opportunity spread, more and more farmers and entrepreneurs jumped into the emu-wagon. The news on these god-sent birds appearing in newspapers and farm-journals prompted even small farmers and agricultural laborers to venture into the emu-farming. The fraudsters started floating fancy websites to promote emu farming. To them, Emu was a ‘golden goose’ of recent times. They will live up to 40 years and can lay eggs for 20 years. The meat, oil, skin, leather, feathers and even nails would bring in money. The emu oil is said to be a panacea. About 4-6 litres of oil could be derived from a single bird and sold at ₹ 3000 per litre. Emu meat is highly recommended to heart patients and diabetics as it is low in cholesterol and was termed as the
emu-head-copy‘super food of the new millennium’. One kilogram of meat could be sold at a minimum of ₹ 400 to 800. The feather could be used for decorative purposes and a single bird would give 400-600 gms which could easily be sold at ₹ 200. The egg shells and nails could be sold at fancy prices. The emu eggs used for food could be sold at ₹ 200 each and once the fertile eggs are turned into chicks, the price could be anywhere between ₹ 1000- 2000. And so, why should they hesitate to jump in?

The emu-farmers in Andhra Pradesh had even formed their own association-  Andhra Pradesh Emu Farmers Association (APEFA). They even started giving dictum to their members. One month old chick should be sold at a minimum price of ₹ 4000 and price DSCF2461should go up at incremental rate of ₹ 500 -750 per month and so a 15 month old bird should be sold at ₹ 12500. Many farms could not meet the demand for chicks. The media hype was at frenzied peak.

The bigger players started offering consultancy. They offered project reports, training sessions and assistance to bag bank loans. For example, SSK Emu Farm, Hyderabad ‘established in 2009′ claimed to be one of the ‘renowned processors, suppliers and exporters of the emu-products’ and ‘have carved out a niche for themselves in the Indian sub-continent market’. They supplied everything from chicks to feed to medicines. Their experts visit the farms, evaluate and suggest on practices. The small units were assured of buy-back at fancied prices.

emu-skin-leatheremu-oilNo one bothered on who ate emu meat at this price or who extracted emu oil. No one knew where the oil is marketed or if there are any takers at such huge prices. They never bothered on who would eat the costly emu eggs or who would fancy the emu feathers. It was never ever their concern if any one would paint on emu egg shells or how many homes would use emu legs as ‘lamp stands’. The commercial viability was not assessed. The warnings of the sensible market-watchers were ignored. The US Food and Drug Administration (FDA) has stated that it had determined that a pure emu oil product marketed to treat or cure a wide range of diseases was an unapproved drug. Its marketer had never submitted to FDA data to support the product’s safe and effective use.

Get-richThe real ‘ponzi’ schemes were yet to come. It came in the disguise of contract farming. ‘Susi Emu Farms’ of Perunthurai was the first player to promise a return of at least ₹1.44 lakh within two years for an initial deposit of ₹1.5 lakh for rearing emus. They returned the deposit at the end of two years to all the investors. The prompt payment by the company gained the trust of the investors and the prospect of becoming instant- rich lured hundreds of people from Tamil Nadu, Kerala and Karnataka. More than 100 companies came up at Erode, Tirupur, Coimbatore, Namakkal and Salem districts following the ‘success’ of ‘Susi Emu Farm’. Some companies offered ₹ 2.40 lakh for a deposit of ₹1.5 lakh. They opened a chain of restaurants serving emu meat with celebrities and ministers joining the bandwagon. Tamil actors R Sarathkumar and Sathyaraj were the brand ambassadors for Susi Emu Farms..About 20000 people from Andhra Pradesh, Karnataka, Tamilnadu and Kerala  invested their money in the new contract farming gamble of which 12000 chose ‘Susi Emu Farms’ as their mentor.

By this time, the Erode District Administrators sensed some foul play in the huge offers and mushrooming of farms. They issued warnings to people not to fall prey to the tempting offers. Greed has overtaken senses and the investors just ignored the warnings. There were many people who invested heavily anticipating handsome returns.

emu2The bubble’ burst in August 2012 after the payments from ‘Susi Emu Farms’ dried up. The investors started realizing that emu farming was just another scam. Suddenly, all the ‘Susi’ model companies shut shop and hundreds of investors were left in financial ruin forcing them abandon more than 12,000 birds. ‘Susi Emu Farms’ alone is believed to have swindled around ₹ 200 cr. from the investors and ₹ 500 cr. is a rough estimate of the loss of the investors in Perunthurai area alone. More than 15000 investors complained in Tamilnadu alone against the emu-farms. According to newspaper reports, the Economic offences Wing in Erode alone has received 9400 complaints. They arrested the promoters of 21 out of 42 firms including that of ‘Susi Emu Farms’ and according to them these firms had collected Rs 224.43 crore from public. Cases against 147 persons have been registered and are pending in various courts. The ‘Susi Emu Farm’ alone is believed to have cheated 2590 persons to the tune of ₹ 74.62 cr. The police has even booked criminal cases against both Tamil actors Sarathkumar and Sathyaraj for endorsing the false claims of the emu companies.

Emu-treatmentThe government started feeding the emus after they were abandoned by the farmers. Many birds suffered injuries and were put under veterinary care. After about an year’s publicly funded feasting, the Government decided to auction off the birds. They expected the proceeds from  the auction of some 10,000 emus will of help to compensate aggrieved emu farmers for their losses. But the auction results revealed how poor was the demand for these birds. They were even sold at a paltry sum of ₹ 50 per bird.

Image credit: tehelka.com

Image credit: tehelka.com

The fraudsters who migrated to northern parts of India may be doing well. Innocent but greedy investors as well as poor farmers would have been trapped by this time. Still there are many websites proudly displaying the ‘attractive future’ of the prospective investors as emufarmingindia.com, emufarming.org, emufarmer.com, agribiotek.com, vandvemufarm.com, adityaemufarm.com, saiemufarm.com, farm.espirit.com, fancypigeonskerala.blogspot.com, agricultureinformation.com etc. The National Bank for agriculture and Rural Development (NABARD) has removed their ‘model project report’ on emu farming from their official website, www.nabard.org. But the requests of many farmers asking for details can still be viewed at NABARD’s website and remain as the standing testimony of the apex bank’s involvement in the whole episode.

Australian_Coat_of_Arms (1)Emu is endemic to Australia and even appears in the coat-of-arms of the Australian Government. Emu farming became legal in Australia some twenty years ago and the industry boomed for several years. Emu farms sprang up across the country. According to Australian Broadcasting Corporation (www.abc.net.au),” the early optimism the industry inspired was soon overtaken by economic reality and Australian emu farms have become as scarce as hen’s teeth”. Still it is a highly regulated Industry and all farmers are licensed by the Government of Australia. Even when the emu farming has gone viral in India, no regulatory  measures or licensing system were imposed on the entrepreneurs. Nobody took note of the situation but remained silent spectators till everything has gone out of control. The veterinary universities or governmental agencies have not conducted any study on the viability and profitability of emu-farming in India.

Image credit: agropedia.iitk.ac.in

Image credit: agropedia.iitk.ac.in

Video clippings on the ‘prospects’ of emu-farming and interviews with the ‘successful farmer-entrepreneurs’ by the agricultural journalists of Kerala are still available in YouTube and other social platforms. When contacted over phone, the ‘celebrated’ farmers of Kerala as Mr Mathew (Maria Emu Farm, Ettumanoor), Mr Prakash Menon (Erattakkulam, Palakkad) and Mr Mohammed (Vettom, Malappuram) expressed their anguish and cautioned the farmers against venturing into commercial emu-farming. According to V&V Emu Farm of Thiruvalla which still maintains a few pairs of the birds say that still there are people who want to invest in emu-farming business. The print and visual media who once published the success stories have not  brought out the stories of failures and losses. No more farmers or investors should be duped by an ‘opportunity that never existed’. Will the ‘agricultural journalists’ take note of, at least now?
 

 

 

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