IN THE EYE OF A STORM: An emu farm in Tamil Nadu

K. Ranganathan, who had just taken voluntary retirement, was keen to invest his money in some paying scheme. When he heard about a lucrative emu (a bird native to Australia) farming venture that ensured an assured “monthly return”, the retired chemical engineer, based in Mettupalayam in Coimbatore district in Tamil Nadu, thought it was the answer to his prayers.

The scheme went like this. For an investment of Rs 3 lakh, Ranganathan would get 12 emu chicks from Susi Emu Farms. The farm would also pay him Rs 12,000 every month as “salary” to rear the chicks at his home. Moreover, it would provide him with emu feed, medicines and emu medical insurance and a glorious annual bonus of Rs 20,000. At the end of two years, Ranganathan would return the grown emus to the farm and get his investment back as well.

The scheme sounded too good to be true. But Ranganathan — and many other gullible investors like him — did not realise it. In January this year, he went ahead and entered into an agreement with Susi Emu Farms. His salary began to be paid to him from February and the chicks too arrived in April.

But earlier this month, disaster struck. M.S. Guru, the owner of Susi Farms, flew the coop, abandoning his business and leaving investors like Ranganathan and thousands of hapless emus in the lurch. According to government sources, Guru is “absconding”.

Once hailed as a “booming” business in south India, emu farming seems to have lost its sheen in a mix of fraud and unrealistic expectations. It’s not just the owner of Susi Farms who has decamped with investors’ money. The owners of 15 other emu farms, including Queen Emu Farms, Rabis Emu Farms, Suriya Emu Farms, Suvi Emu Farms and Nidhi Emu Farms, have disappeared in recent weeks, leaving their farms, the emus, the staff and the investors high and dry.

A farm called TVS Emu Farms (which has no links to the TVS group) is being investigated. “We have found they collected Rs 8.5 crore from investors,” says S. Ganesh, district revenue officer, Erode district collectorate.

Says a desperately anxious Ranganathan, “I went into this business because I had heard Susi Farms had been around for the past five years and assumed they were reliable. I just want my money back,” he says.

The emu farm scam has claimed thousands of victims like Ranganathan. Many of them, belonging largely to the farming communities of Tamil Nadu, Kerala and Andhra Pradesh, reportedly pledged their jewellery and put in all their life’s savings into this “paying” scheme. The Erode Collectorate alone has received more than 3,128 complaints so far. Out of the 32 emu farms in Erode, 16 have downed shutters.

Says Ganesh, “The entire business was a fraud. They lured people with the promise of high returns like 79 per cent per annum, which is totally unrealistic.”

Of course, the emu farms had a thoroughly dubious business model to begin with. They had two types of investment schemes for the public: the first is the one Ranganathan had opted for, where an investor’s minimum deposit of Rs 1.5 lakh entitles him to six chicks, Rs 6,000 a month and Rs 20,000 bonus under a two-year agreement. The investors also get their initial deposit back.

The second was called the “VIP scheme” and did not even require the investor to keep the chicks at home. The investor was assured of the same returns as in the first scheme.

This may sound utterly bird-brained, but many in the cash rich farming community of south India found the idea hard to resist. “The people are also to blame; they were greedy and went into these schemes blindly. The Susi Farms owner collected more than Rs 200 crore from 8,000 customers for these schemes,” reveals Ganesh.

After the scam came to light, the government seized the properties and belongings of the emu farms under the Tamil Nadu Protection of Investors Deposits Act, 1997. It plans to repay investors by selling them in open auctions.

Meanwhile, the poor emus are in a sorry plight. Walking into the deserted Susi Farms in Erode you are greeted by two police officers and a group of unpaid workers. The 800-odd hungry looking emus with their long blue necks (reportedly there are another 8,000 birds in another branch of the farm) kept in a fenced enclosure come bounding towards you with their ungainly gait. They poke their sharp beaks through the fence holes, probably hoping to get something to eat.

An official offers some leaves which one emu catches and chews on. “We don’t have the heart to leave them but they are now being fed once a day instead of twice. The government has promised to pay us our salaries too. We don’t know how long this can continue,” says one staffer.

The government is actually in a bit of a bind where these emus are concerned. It now faces the task of maintaining several thousand of them scattered across the 16 farms. A few have died already and some have started falling sick because of irregular care, officials admit.

Plans are also afoot to sell the emus in an open auction. However, that may not be a great success as most now admit that contrary to what was believed before, emu meat is far from popular in India. At least, not as yet. Says T. Palaniswamy, an official of the district animal husbandry department in Erode, “People in Tamil Nadu are not interested in eating this meat and there is no scope for exporting them either.”

Others agree that the so-called boom in emu farming was riding on hype. “Nobody is willing to pay even Rs 100 for an emu bird today,” says Muthuswami T., district secretary, Tamil Nadu Farmers Association in Erode. Agrees M. Babu, director, Centre for Animal Production Studies, Tamil Nadu Veterinary and Animal Sciences University, “The market for emu meat is still nascent in India.”

According to Rajendra Kumar, president of the 300-member Tamil Nadu Emu Association, not all emu farm owners are bad. The ones that are absconding now “were not emu farmers, they were financiers,” he says. “It is people’s fault as well for putting their money in farms with no cutting units or feed mills.”

However, he feels that emu farming is a viable option, though not with excessive profits. “I sell emu meat at Rs 150 a kg and one can make a profit of Rs 3,000 a bird,” he says.

However, a senior revenue official in the Erode district administration who was entrusted with the task of investigating emu farms in August last year, after complaints began to come about their unrealistic returns, feels that the business never quite caught on. He studied the balance sheets of these farms and found that Susi Farms showed a profit of just 0.45 per cent for 2010-2011, while it was 2.2 per cent for 2009-2010. “In my report I warned that it was impossible to give returns with these meagre profits. Another emu farm, Queen, was showing a loss of Rs 4.22 lakh. I predicted that these farms would go bust. Their business model just did not make any sense,” he says.

That said, it doesn’t mean that the scam has made emu meat vanish from the market. VC Emu Farms India Ltd, which runs an emu restaurant in Chennai, is still functioning. Its director, S.M. Rajasekar, believes that they have not failed because they do not use the emu only for its meat, but also make cosmetic products from the oil derived from emu fat. So with a little innovation, emu farming can be viable, say experts.

But that’s little consolation for Ranganathan and other duped investors. For them, the bird has well and truly flown. With their hard earned money in tow.