From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Thu Nov 05 2009 - 14:40:07 EST
INTERVIEW-Ethiopia targets 3 million ha for commercial farms
Thu Nov 5, 2009 2:09pm GMT
* Two million hectares already secured
* Indian investors eyeing land
* Food security concerns dismissed
By Barry Malone
ADDIS ABABA, Nov 5 (Reuters) - Ethiopia plans to offer 3 million hectares of
land over the next two years for investors to develop large-scale commercial
farms, a government official said on Thursday.
Countries in Asia and the Gulf -- such as China, India and Saudi Arabia --
have rushed to buy farmland abroad to grow crops for their own people after
food price inflation last year highlighted the need for greater food
security.
Africa has become a prime target, despite concerns about the impact on the
world's poorest people, and locals nicknaming the practise 'land-grabbing'.
"We will make 3 million hectares available for investment in the next two
years," Esayas Kebede, director of the government's Agricultural Investment
Agency told Reuters.
"This is land around the country that is not currently used and could be
used to produce coffee, cotton, sesame, sugar cane, tea, palm oil and
flowers."
The agency has already parcelled off two million hectares and is negotiating
a further one million hectares from regional authorities in the huge
country.
"More than 9,200 investors have received licenses for commercial farms in
Ethiopia since 1996, of which about 1,300 are foreign," Esayas said.
Analysts point to massive potential profits in farmland investments as
global population grows and climate change chokes off supplies of arable
land.
Esayas said Ethiopia could offer investors a wide range of climatic
conditions, unlimited water resources and quickly developing infrastructure.
The government offers incentives to both foreign and Ethiopian investors,
including tax holidays depending on export levels, duty-free import of
capital goods and grace periods of up to five years on land rents.
INDIAN INVESTORS
The majority of investor enquiries are from India but there are also
Chinese, European and Middle Eastern firms operating in Ethiopia, Esayas
said.
India has invested nearly $4 billion in Ethiopia, including in agriculture,
flower growing and sugar estates.
Development organisations have expressed concerns about the erosion of local
farmers' rights by foreign investments in developing countries.
Ethiopia is still desperately poor and this year appealed for food aid for
6.2 million people. But Esayas said investment could be used to fight hunger
and poverty.
"We have 74.5 million hectares of cultivable land of which only about 15
million is cultivated by small scale farmers," he said. "When we give land
to investors they create jobs, they develop our technology and they bring
foreign currency."
The three million hectares selected were sparsely populated, he said.
Ethiopia is overwhelmingly reliant on its agricultural exports. It is
Africa's biggest coffee producer and the world's fourth largest exporter of
sesame seeds.
The U.N. Food and Agriculture Organisation says private investment to
develop agriculture in poorer countries is urgently needed if the world is
to double food output by 2050 and stamp out hunger that still afflicts about
1 billion people.
(Reporting by Barry Malone)
C Thomson Reuters 2009 All rights reserved
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