From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Sat Jan 16 2010 - 05:53:04 EST
Ethiopia – country of the silver sickle – offers land dirt cheap to farming
giants
Addis Ababa sells vast fertile swaths to international companies in effort
to introduce large-scale commercial agriculture
* Xan Rice <http://www.guardian.co.uk/profile/xanrice> in Bako
* The Guardian <http://www.guardian.co.uk/theguardian> , Friday 16
January 2010
This is a country of the bent back and the silver sickle, where virtually
all the crops have felt the calloused fingers of the peasant farmer working
his tiny parcel of state-owned land. The ox pulls the plough and the donkey
the cart, and fertiliser counts as agricultural technology.
Chugging into this picture on a bright green John Deere tractor came
Hanumantha Rao, a former sugarcane farmer from India who is at the forefront
of a revolution sweeping through Ethiopian
<http://www.guardian.co.uk/environment/farming> farming. He hurried up to a
hilltop on his company's farm in Bako, four hours' drive from the capital,
Addis Ababa, and swept out an arm to indicate the land he has leased from
the government: 11,000 hectares to grow rice, maize and oil palms.
In the fields below, boreholes were being sunk and roads graded. An airstrip
will soon allow for a crop-spraying plane. Besides the new tractor Rao had
been riding on that morning, there were 30 more on site. That was not many,
he insisted, and neither was the farm especially large.
Further west in Gambella, Karuturi Global, the listed Indian horticulture
company that employs Rao, is bringing in 1,000 new tractors to work the
300,000 hectares it has leased – making it one of the biggest farms in the
Horn of Africa, if not the continent. "It is 120 kilometres [75 miles]
wide," Rao said proudly. "Three hours to cross by Jeep."
<http://www.guardian.co.uk/world/ethiopia> Ethiopia's great land lease
project is moved swiftly ahead. In an effort to introduce large-scale
commercial farming to the country, the government is offering up vast chunks
of fertile farmland to local and foreign investors at almost giveaway rates.
By 2013, 3m hectares of idle land is expected to have been allotted –
equivalent to more than one fifth of the current land under cultivation in
the country.
The move is part of a wider trend that has seen other African and Asian
countries seek to take advantage of high global demand and the cost of crops
by offering agricultural land to foreign companies, private equity funds and
governments, particularly those of import-dependent Gulf countries.
If done properly, the investments have the potential to increase local
<http://www.guardian.co.uk/environment/food> food availability and create
badly needed jobs. If not – as was the case with the attempt by the South
Korean firm Daewoo to lease half of Madagascar's arable land to grow corn
for export in 2008, a deal many saw as 21st- century colonialism – they
could prove disastrous.
In a food-insecure country such as Ethiopia, where several million people
rely on food aid, the idea of offering fertile land to outsiders has raised
concerns. But government officials point out that Ethiopia has vast reserves
of underused land – 60m hectares of the country's 74m hectares suitable for
<http://www.guardian.co.uk/science/agriculture> agriculture is not
cultivated – and insist no local farmers will be adversely affected. Esayas
Kebede, investment support co-ordinator at the agriculture ministry, said
that foreign companies were essential for the move from subsistence to
commercial farming, a key part of the country's development strategy.
"There is no crop that won't grow in Ethiopia but we cannot produce quantity
and quality. Why? It's a vicious cycle of the lack of capital and
technology," he said. "So leasing land is a real opportunity for us."
So too for Karuturi. The Bangalore-based company, which is the world's
largest grower of roses, has negotiated an extraordinarily good deal with
the government. For its farm in Bako, Karuturi is paying no rent for six
years and then only 135 birr (£6.50) per hectare per year for the remainder
of the 50-year lease. In Gambella, a remote and sparsely populated region
close to Sudan, the rent is only 15 birr per hectare (73p).
The company believes the potential for large profits is so great that it
plans to invest nearly $1bn in its Ethiopian agricultural operations,
according to managing director Sai Ramakrishna Karuturi. Within eight years,
he hopes to be producing 3m tonnes of cereals – mostly maize and rice – a
year on the Gambella farm, as well as palm oil and sugar. Some of the
produce will be sold in Sudan and Kenya – where the company is in talks with
the US Agency for International Development to build grain silos at a border
town. Like all the foreign land investors in Ethiopia, the company is free
to export as much of its produce as it likes, but Sai Ramakrishna Karuturi
said most would be sold domestically, where there is a ready market.
"Ethiopia is a food importer and will continue to be for some time. With the
high cost of transportation in Africa, it does not make sense for us to try
to export beyond the region."
As with land, labour is also extremely cheap. The minimum wage in Ethiopia
is about 8 birr (39p) a day. Karuturi, which hopes eventually to employ
20,000 people on its two farms, says it pays 10 birr (49p) a day and
provides meals to its workers.
Rao, general manager of the Bako farm, said there was no shortage of locals
desperate for jobs. "People here are very poor. They would work for 1 birr,
and no one else pays more than 5 birr. So we are paying double."
Outside the farm gates, the feeling about Karuturi among peasant farmers was
mixed. The company's 11,000 hectares were fallow before it arrived – the
black clay soil is rich in nutrients but difficult to work without a
mechanical plough – but some locals had grazed their cattle there and used
to cross the farm to the nearest river, which is no longer possible.
Teresa Agassa, a 38-year-old man in gumboots who works a one-hectare plot,
said it was good that some local people now had jobs – even if the wage was
too small. But he spoke enviously of Karuturi's tractors.
"They're only for the company's benefit. Maybe there can also be benefits
for us – but we will only know in the future."
Ethiopia's farming revolution
In the late 1970s Ethiopia's communist regime nationalised all land, and
private ownership remains outlawed. The millions of small-scale farmers work
under licence from the state, and most plots are one hectare or less, which
has hampered efforts to improve food security. But the centralised tenure
system has made it easy for the government to offer hundreds of idle farms
to investors at cheap rates. A detailed database contains information on
soil types, weather patterns, the nearest rivers, and suitable crops. The
agriculture ministry is advertising 1.68 million hectares of land in the
Benishangul-Gumuz, South Omo and Gambella regions. The greatest interest has
come from India and Saudi Arabia, including Saudi Star Agricultural
Development, which is growing 10,000 hectares of rice in Gambella. Firms
from other Arab countries, and from China, Japan and the US have also
expressed strong interest in leasing land.
Workers at an 11,000ha farm in Bako, Ethiopia, run by the Indian company
Karuturi
Workers at an 11,000ha farm in Bako, Ethiopia, run by the Indian company
Karuturi. The company also runs a 300,000ha farm in the Gambella as part of
Ethiopian government effort to promote large-scale agriculture Photograph:
Xan Rice
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