Ethiopia leases land for agriculture to earn foreign exchange

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Razack Munboadan (C), senior manager with Karuturi, an Indian company with four commercial farms in Ethiopia, supervises workers at Karuturi's farm in Bako, central Ethiopia November 6, 2009. (Reuters)

Bloomberg | 10 November 2009

By Jason McLure

Nov. 10 (Bloomberg) -- Ethiopia plans to lease 3 million hectares (7.4 million acres) of land to foreign and domestic investors for agriculture over the next three years to increase productivity and earn foreign exchange, the government said.

The state has already leased land for 15 birr (U.S. $1.19) per hectare per year in some parts of the country in an effort to attract foreign investment, said Eyesus Kebede, an agricultural-investment coordinator in the ministry. The government is also attempting to woo investors by offering incentives such as grace periods on payment.

“There is ample amount of land which is not cultivated yet,” Eyesus said in an interview in his office in Addis Ababa, the capital, yesterday. “We are preparing the land and we have given the comprehensive support for the agricultural investors.”

Foreign investment in agriculture in Africa has drawn criticism from aid groups, including Oxfam International, that are concerned about the use of farmland to produce food for export from countries with widespread hunger. In Ethiopia, an estimated 13.7 million people, about one-sixth of the population, are dependent on foreign food aid.

Eyesus said such concerns were outweighed by the plantations’ capacity to bring foreign exchange and technology into the Horn of Africa country, as well as creating employment.

Among foreign investors that have acquired land in western Ethiopia are Karuturi Global Ltd., an Indian food processor, and Saudi-based billionaire Sheikh Mohammed al-Amoudi, Eyesus said.

Regional governments have already transferred 1.7 million hectares of land to Ethiopia’s central government and surveyors are in the process of delineating additional land, he said.

Feather Dresses

Among the land currently being advertised on the ministry’s Web site is 180,625 hectares along the Omo River in southern Ethiopia. South Omo Zone, as it is known, is home to pastoralists from the Hamer, Dasenech and Gnangatom ethnic groups, many of whom still dress in feathers and leather garments and are considered among the world’s most threatened indigenous people, according to Survival International, a London-based group that campaigns on behalf of ethnic groups.

Eyesus said the land in South Omo was “empty” and that the government had taken environmental and social considerations into account when allocating land for investors.

“The people and the local governments are very happy,” he said. “We have not seen any conflict between investors and the community.”

To contact the reporter on this story: Jason McLure in Addis Ababa via Johannesburg at [email protected]
Original source: Bloomberg
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3 Comments


  1. Sarfaraz
    19 Aug 2010

    I believe wesern politicians / political groups and other businesmen are creating too much confusion for investors in ethipoia. The Governments plan is excellent foriegn investment in agriculture would certainly create more jobs for local people. I am totally against the Term "Land Grabbing" because the they are leasing out the land for a certain period, not selling it to foreigners forever. In the end they will still have their land and in addition to that more economic development and a better quality of life for local residents. Those who are shouting against this plan should understand that the land is not producing anything at the moment, nor do the locals have enough capital and technology to produce somethign by themselves. The people who are writing their opinion about this should stay out of the way and let the development happen. its a win win situation. even I am planning to leave my lucrative corporate carrier and become a farmer. atleast I would be able to produce food and jobs for locals and reduce my carbon footprint.

  2. Hailu
    20 Nov 2009

    It is right. The decision is very critical because the government has to decide now than waiting for the comments of watchers from somewhere. The food crisis is doubled with the unemployment. The food what we produce is not less than the food the US produce (including the varieties). But Americans does import and buy because they have the capacity to do that. However, we Ethiopians produce more we consume more than we produce. We can not import and buy b/c of the currency crisis and unemployment respectively. Therefore, the government has to go forwards. It is obvious there are -ve and +ve consequences in the line. But land grabing from farmers is not fair because that is their asset, future and employment. Other than this ggggggggoooooooooo oooooooonnnnnnnnnnn. The people who complain from outside are: 1. They are jelous to see this government is heading forwards than before. Actually they can comment that it would be possible for a better acceleration than it is. 2. There are opponents who wanted to see the government is down and the country burnt. 3. Many etc.

  3. Mulugeta
    13 Nov 2009

    I believe the Ethiopian plan of leasing virgin land which had never ever been touched by a ploughshed is a fail-safe plan that would bring in intensive mechanical farming, open up job opportunities to local and improve the life-styles of local communities. Moreover,export earnings from the farm produce will bring in much needed foreign currency to Ethiopia which, in turn, means that it will accelerate Ethiopia's economic stride as well as achieve food-security.

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