Karuturi: Why the hype?


The Bangalore-based agribusiness, Karuturi Global, is arguably the most discussed and criticized agricultural investment in Africa. In 2009, its outspoken Director, Sai Ramakrishna Karuturi, announced with much fanfare the allocation of 300,000 ha of land (0f which 200,000 is conditional) in Ethiopia’s remote Gambella region for the cultivation of oil palm, sugarcane, and rice.  Ever since, the company has become the object of unrelenting criticism from NGO’s and academics alike, having now become the penultimate symbol of ‘land grabbing’ and corporate greed.

As part of my current research, a few months ago I traveled to Gambella to assess the local sentiments towards Karuturi’s project (as part of a 10-project evaluation in Ethiopia). As I drove into the  100,000 ha concession I was struck by how unashamed the company advertised its activities; with a road sign proudly announcing the start to a 3,000 ha area of dense forest the company had just cleared to cultivate oil palm (above picture) and a billboard fully detailing the company’s development plans (below picture). With  the company’s directors frequently boasting about how cheap and easy the land was to obtain, it is unsurprising that its blatancy started to get on people’s nerves. Yes, in practice the company shows scant regard to the biodiversity of its concession and, yes, relations with local communities are marked by resource disputes. But, however horrible it may sound, the extent of conflict with human activity is comparatively minor. Less than 200 households use the concession for opportunistic farming and only a fraction of the area is suitable for pasture. The federal government made clear efforts to reduce conflicts with human settlement when allocating the land.

Just 10 km from its concession is a 10,000 ha locally-owned cotton plantation that obtained its land in 2005 before the government adopted its new land identification procedures. In this case more than 500 households engaged in permanent agriculture were located within the company’s concession and, in contrast to households affected by Karuturi, actually resided within the concession boundaries. Now, this company has never appeared in the media – a google search didn’t  yield any results. In other countries I’ve worked, companies with much larger socio-economic footprints have similarly managed to avoid scrutiny. In Ghana, for example, a company with 13,000 ha concession covering the farmland of more than 1,500 households and in Zambia a 104,000 ha concession covering the farmland of more than 12,000 households have not figured in the media at all.

While illustrating on the one hand the poor investigative powers of  its critics (and perhaps the simplistic tendency for scapegoating), it also reflects more generally on the drawbacks of corporate transparency. Numerous other companies that have not shied away from the media and have openly discussed their operations have, like Karuturi, received the brunt of the anti-land grab fury. Remember, for example, Biofuel Africa in Northern Ghana – one of the few companies to have obtained an environmental permit in Ghana – that despite concerted efforts to accommodate affected smallholders was slaughtered by the media. The consequence: financieers pulling out and the operation going dormant. SEKAB in Tanzania and Addax in Sierra Leone are other cases in point – this list goes on…

The moral of the story seems to be that the more one engages in PR, the greater the chance of buckling under media/NGO pressure. Despite NGO calls for enhanced transparency, current behavior is paradoxically encouraging  corporate secrecy. The only manner in which we can transition towards an effective system of corporate accountability is not through this form of antagonism, but rather by fostering relations that reward good practice and promote corporate engagement. Where only 3 years ago almost all commercial agricultural investors were most receptive to engagement, I find that over the last year my interview requests are more often than not denied. As somebody seeking to reconcile the interests of numerous stakeholders and further an evidence-based debate, I am increasingly losing touch with the corporate perspective.

Critics really have to start to doing their homework and move away from that self-promotional  sensationalism. I find it terribly discouraging when I read reports by, for example, Human Rights Watch and the Oakland Institute that are, not only based on poor science, littered with factual misrepresentations (we’ll leave this for a future post). I then wonder whether such organizations are genuinely in pursuit of sustainable farmland investment or rather in pursuit of sustainable NGO financing.

Original source: Rural Modernity


  1. Nejma Bk
    01 May 2012

    Went to their blog... What exactly is a "'civilized' African peasant"???

  2. Ethiopian
    12 Apr 2012

    As an Ethiopian, our first priority is to rewrite the contracts that Karuturi has obtained. There are better terms that we can obtain for the people and the country with other corporations. The people of Ethiopia will continue to work hard to change existing laws regarding land lease.

  3. Frederic Mousseau, Oakland Institute
    11 Apr 2012

    Given the concerns raised in this article about the work of the Oakland Institute, based on months of field work and interviews with the impacted communities, we find it surprising that the article does not provide the name and credentials of the author.

  4. Abadir
    11 Apr 2012

    Very good thoughts, Karuturi has been very transparent and has done positive things for the community and the country

  5. LeBaron
    08 Apr 2012

    Nice, well balanced article. Thank you for the good reporting.

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