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Wasting arable land in Africa: The case of Gambella, Ethiopia

Nordic Africa Institute | 17 January 2014
Construction of canals for the Saudi Star rice project in Gambela, Ethiopia, 2012.

Wasting arable land in Africa: The case of Gambella, Ethiopia

By Cecilia Bäcklander, Swedish independent journalist and film maker

In Gambella, enormous areas of fertile land are lying fallow at an unfinished huge agricultural project site, and agricultural machines stand idle in rows, sinking into the ground.

Is this a venture by a multinational corporation gone bankrupt? No, it is one of the world’s richest men—the largest investor in Ethiopia—who set up a gigantic project and then stopped paying.

A 2013 NAI book has several chapters about Gambella, one of the most backward and sparsely populated areas of Ethiopia, which in recent years has seen a land rush.

The Ethiopian leadership has now admitted that it has cost too little to give up and leave behind displaced populations and dashed hopes, without neither food production nor export proceeds.

On a recent visit to Ethiopia, I saw enormous areas of fertile land lying fallow. A half-built canal cuts a several miles long wound through the landscape. Hundreds of tractors and other agricultural machines stand idle in rows, sinking into the ground.

A large half-built factory for drying and hulling 100,000 tons of rice per year is resounding silence. The Saudi Star Agriculture Development project, 10,000 hectares, stands almost still since 5 months. Only 350 hectares are cultivated with provisional irrigation.

Is this a venture by a multinational corporation gone bankrupt? No, it is one of the world’s richest men—the largest investor in Ethiopia—who set up a gigantic rice cultivation project and then stopped paying.

His name is Mohammed Al-Amoudi; he has business interests in everything from oil to construction. You can’t go many meters in Ethiopia before you stand before one of his offices, or hotels, or construction sites. Al-Amoudi is also very active in Sweden as the well-known owner of Preem, Peab and Midroc.

I did not come unprepared to Gambella. On the way there, I read Agricultural Development and Food Security in Africa, a new book from the Nordic Africa Institute and Zed Books by the political economist researchers Fantu Cheru and Renu Modi (eds.). There are several chapters about Gambella, one of the most backward and sparsely populated areas of Ethiopia, which in recent years has seen a land rush.

The government changed course in its agricultural policy after the 2005 elections. It was no longer the smallholders that were to lift the country out of poverty. Subsistence agriculture is under pressure from the growing population, land scarcity and erosion as a result of climate change. The average farmer in Ethiopia cultivates less than a hectare, but in the densely populated parts of the country, a farming household should be grateful for half a hectare.

So Meles Zelawi and his government decided that mechanised large-scale commercial farms were to drive development; hitherto unutilised land areas would come to be used productively to feed a growing population and yield export revenues. Thus began large-scale leasing of land to domestic and, in particular, foreign investors. Ethiopia is not alone.

The editors established that no country has been transformed into an industrial economy without developing agriculture first. They also state that only 14% of Africa’s 184 million hectares of arable land are used and that 21 million hectares are under threat of erosion. Therefore, foreign investment in African agriculture should be welcome.

The book wants to look objectively beyond the inflamed debate about ‘land grabbing’ which is the current term used for land acquisitions in Africa. This word is not so popular e.g. in Ethiopia, where it is often perceived as a patronizing label from the West, implying that African countries don’t know their own good.

Yet, there is an inbuilt contradiction here. Africa needs to produce more food. But the land-leasing foreign companies have their own interests. It is not the old colonial powers that are active here, but the fast-growing emerging economies—primarily China, India and Brazil.

In 2008, the world lived a triple crisis: food and energy shortages leading to rapidly rising prices, and on top of that the financial crisis. The world was shaken by the fear of a global food crisis, leading to massive international demand for arable land for food and energy crops.

The World Bank among others estimated that 60 million hectares of land had been leased to foreign investors by 2011 for food crops to be consumed in their home countries or to produce biofuel in response to the rising cost of oil. Two thirds of this land was estimated to be in Africa.

The challenge for African governments is, according to the authors, to make sure that these investments bring transfers of technology, infrastructure and finance that drive up agricultural productivity.

Back to Ethiopia. The prerequisites for large-scale rice production in Gambella are perfect. A huge dam has stood unused since over 20 years; the water is just waiting to get useful. The earth is rich in organic substances. The climate allows two crops per year.

The investors have got extremely beneficial lease terms from a welcoming state, which furthermore protects the installations against the local population in a region with a history of struggle for resources and influence.

The Ministry of Agriculture now says that no investors have fulfilled the expectations of the Ethiopian state. The contract of the gigantic Indian company Karuturi is scrutinized in the book; it was allotted 100,000 hectares with an option for 200,000 more, but has only cultivated 5000 and is now rumoured to be leaving. The grandiose plans seem to come to nothing. Why is production halted?

The reason is, says the outspoken Ethiopian researcher Dessalegn Rahmato, founder of the Forum for Social Studies in Addis Abeba, author of one chapter in the book: The conditions are far too generous. Rahmato has travelled in Gambella conducting field studies. The results are discouraging.

The companies access huge areas at no or little cost; they get tax exemptions; there are no sanctions against those who neglect their investment and just leave the land fallow. They are allowed to grow any crop, freely for export, without any obligation to supply the local market with food.

The companies also pay low wages and have insufficient knowledge of local conditions. Furthermore, Rahmato notes in the book, the large-scale leasing of land can be seen as a regress to the situation in the country during the imperial reign, when land was owned by the nobility and the bourgeoisie – land ownership is now being re-concentrated in the hands of a small group of domestic rich people, foreign capitalists and the state bureaucracy.

There is another contradiction here: the Ethiopian state leadership is deeply suspicious of the raw market forces. It argues that countries in a developmental phase need some protectionism. Time seems to have proved them right. The economic crisis has caused a growing consensus that the market forces must be harnessed.

Still, the Ethiopian government has let these forces loose in their quest for rapid development in order to become a middle-income country within ten years. It went fast but went wrong. Gambella shows that development cannot be devolved to the market, least of all to the unfettered capital in the closed state.

Fantu Cheru and Renu Modi establish that the interest in Africa shown by China, India and Brazil can be used to benefit Africa. There is a lot to learn from these countries, where developmental states have mobilised around long-term goals.

Africa can escape poverty and hunger and move towards industrialisation with a core of agriculture, just like China, India and Brazil have done. It’s completely up to the African governments, who have to do their homework first. There is a need for strong regulation, controls and transparency to compel the companies to behave. Getting 10,000 or 100,000 or 200,000 hectares almost as a grant is an incentive for large-scale risk-taking.

The Ethiopian leadership is now signalling that the size of the land acquisitions is to be reduced and the conditionality tightened. It has cost too little to give up and leave behind dashed hopes, displaced populations and still neither food production nor export proceeds.

This article has been translated by the editor from the original Swedish text, read by the author on Swedish radio on 16 January 2014.
  • Icon-world  NAI
  • 17 Jan 2014

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