Wudineh Zenebe and Haleta Yirga, Ethiopian Reporter | Addis Ababa, Ethiopia
One hundred kilometers west of Injibara town in the Amhara Regional State lies Metekel, the largest zone in the Benishangul Gumuz Regional State in Ethiopia. The region is accommodating two colossal projects: the much-sung Millennium Dam on the Nile, and the lesser known large agricultural engagements by commercial farmers.
Bumbudi is the location in the Gubba district of Metekel where the Nile will be harnessed for electric power production. Situated 40 kilometers from the Sudanese border, it is said to be etched in the memories of the locals. “It’s the place where we fought off tyrants,” recalls veteran politician and former rebel fighter, Alkder Ahmed Zaid. “We started the struggle here and brought it to fruition.”
Older generations before Alkder’s time, too, fought expansionist Ottoman Turks that came through the region from Sudan, though they didn’t share Alkder and his generation’s triumph, according to local legend.
The Benishangul Gumuz Region is situated in the north-west of Ethiopia. It expands over an area a little over 5 million hectares, and, according to the 2007 Housing and Population Census, is home to a population of over 670,000. Much of the population makes a living through age-old traditional farming and the extraction of minerals.
The Ministry of Agriculture, which is mandated to stockpile land in regional states and disburse it to developers, has earmarked over a million hectares of the Benishangul land for the same purpose. Some of it has already been handed out.
This is only a portion of a larger plan of distributing a combined three-million-plus hectares of land in Gambella, Oromia, and the Southern Nations, Nationalities and Peoples’ regions for commercial farming. Around 90 percent of the land has already been given out to international agri-businesses amid intense debate and criticism from international and local groups.
So why would a little over five percent of Ethiopia’s 76 million hectare arable land being doled out to agri-businesses spark international debate? For one, arable land rush was caused by the need to satisfy the most basic of human needs: food.
The “Final Frontier”
Humanity’s ability to feed itself went unquestioned for 30 years since the mid-70s when grain supplies soared and prices fell. However, the world wasn’t prepared for the trend that, starting 2006, saw prices gradually rising, and reached all-time-highs in 2008. A ton of rice, the most important staple food for nearly four billion people over the world, started selling as high as one thousand dollars, up from 400 dollars a year ago.
Rising oil prices, the dwindling harvests of these years – said to be the worst of the decade – and the global economic crisis were blamed. In fear of not being able to feed their own populations, surplus-producing countries started banning exports, further straining food-import-dependent nations. India, for example, stopped exporting nearly all types of rice, and food riots broke out in 15 countries in 2008 alone.
There were basically two ways for the food-import-dependent nations to address the problem, according to experts: find ways to make what little cultivation they have to yield more, or find land to cultivate. Being of the richer nations of the world, these nations opted for the latter since the nature of their predicament was begging to be addressed straightaway. Hence started the rush for cheap land around the globe, spending billions to establish large plantations in what a World Bank and United Nations Food and Agriculture Organization (FAO) joint study called “the earth’s last large reserve of unused land”; the so-called Guinea Savannah zone in Africa that spreads across the continent from the Guineas in the west to Ethiopia in the east, and southward to Angola and Mozambique. Almost 90 percent of the world’s arable land had already in use anyway, according to FAO estimates. “Africa is the final frontier,” an asset management expert advised farmers and investment bankers in 2009. “It’s the one continent that remains relatively unexploited.” And hence was the “third wave of outsourcing” reality, as dubbed by one investor, referring to the first and second waves as being the manufacturing and services outsourcings to China and India respectively.
“NEED meets NEED”
The schemes, along with the billions in investment and the promises of social good they bring, were welcomed by governments in the destination countries with open arms – in the form of knockdown land lease rates, grace periods, and tax holidays, among many other things. Ethiopia was no different. Apparently, the jobs, houses, schools, clinics, and other infrastructure these projects promised were highly in demand, together with the skill and technology transfer possibilities – and in the agricultural sector too.
This seemed like good news for Ethiopia largely associated in the global scene with droughts and its dependency on food aid. Although the produces were mostly meant for export to richer destinations, earnings were believed to be sufficient enough for the host country to purchase its food on the international market, rather than produce it locally. “If we can get money we can buy food anywhere,” Abraham Deressa (PhD), former minister of state for Agriculture and Rural Development had said in a statement last year.
This global trend of outsourcing food production was also met in Ethiopia by the ambitious Growth and Transformation Plan (GTP) that maintains agriculture as the major source of the rapid and equitable economic growth it intends to sustain. All was merry on that front as the scheme seemed a lasting and non-charitable solution for the perils of hunger that loomed over the nation.
Accordingly, the Ethiopian Investment Agency approved 815 foreign-financed agricultural projects between 2007 and 2009, nearly doubling the number registered in the entire previous decade. Plots cost from 15 birr to 2,000 birr per hectare per year, depending on the proximity to infrastructure such as transportation, among other things. Land of similar quality would cost around 350 dollars per hectare per year in Malaysia or Indonesia, according to estimates done by Karuturi Global, a Bangalore-based food company and one of the investors in Gambella Region on over 300,000 hectares of land.
Saudi Star Agricultural Development, a commercial rice farm in Gambella with 500,000 hectares of land harvested its first produce in early 2009 on a pilot plot, and the owner of the company, Ethiopian-born, Saudi billionaire Mohammed Al-Amoudi personally delivered this harvest to the leader of the sole benefactor-cum-dependent nation on the project, King Abdullah of Saudi Arabia.
The Benishangul Gumuz Regional Government on its part states that it is faced with the grim task of bringing infrastructure closer to the population – made worse by the sparse nature of their settlement. To address the issue, the region has embarked on relocation programs that created expanses of unoccupied land that, apparently, is being conveniently leased out to commercial farms.
So began the land concessions and Benishangul land has been leased to, among others, S & P Energy Solutions, an Indian agri-business interest; and local investors Horizon Ethiopia; Ardent Energy; Zeleke Farm Mechanization and Ambassel Trading House. S & P alone have acquired 50,000 hectares of land in Metekel Zone, and is rushing to commence corn production.
Commercial farm land demarcation is not exactly scientific in Benishangul, Ethiopia, to say the least. “It used to be done by sheer guesstimation,” Yaregal Aysheshum, former president of the regional state told The Reporter. “The delineation done by the natural landscape aside, no measurements were taken.” In fact, anything resembling a scientific measurement is done by motorcycle. Regional investment bureau workers would use bikes to measure lands for investment and mark boundaries in 100-kilometer intervals.
These concessions were not without their own share of criticism from advocates of causes that range from the environment to labor practices. In what became an international bout, questions such as who will reap the benefits and whether it is a ploy for corrupt leaders to amass finances made headlines. The race for land began to be dubbed as “land-grabbing,” and even “agro-imperialism.” Such nomenclature came about as a result of the concerns that advocate feel should be addressed as matters of policy before the disbursement of the lands.
The issue of labor : Ethiopia
One area where such policy is lacking in Ethiopia is the labor sector. Agriculture is the leading employer in the country with 43.5 percent of the workforce in the country engaged one way or another in the sector, according to a 2009 World Bank survey. However, regulations stipulated in the law of the land have not been in implementation – mainly for the sole reason of encouraging employment and stimulating the economy, and often at the expense of the social protection and safety of the labor force.
Practices in the commercial farms are no different. The jobs pay less than the World Bank’s 1.25-dolllar-per-day poverty threshold, even as a project such as the Karuturi engagement in Gambella has the potential to enrich international investors with annual earnings that the company expects to exceed USD 100 million by 2013, as the company estimates.
Sai R. Karuturi, founder and managing director of the company, said his company pays its workers at least Ethiopia’s “minimum wage of eight birr” (though there exists none in the labor laws of the country), and “abides by Ethiopia’s labor and environmental laws” in a video interview with Bloomberg.com in 2009.
“We have to be very, very cognizant of the fact that we are dealing with people who are easily exploitable,” he said, adding that the company, one of the world’s top 25 agri-businesses, will create up to 20,000 jobs and has plans to build a hospital, a cinema, a school, and a day-care center in the settlement.
The issue of environment : Ethiopia
Currently, the tree lines that cover this otherwise barren landscape of the Metekel zone are being burned down to make way for farming. Their remains are bulldozed to the ground. The wildlife that called these forests home are migrating to the nearby Sudanese Dinder Park, the flames pursuing them for the hundreds of kilometers they journey. This twin-bladed undertaking also aims at producing charcoal from burned down wood and market it locally, according to sources close to the operations. S & P has began the prior work of preparing the land – burning and razing the forests.
According to Prime Minister Meles Zenawi of Ethiopia, who recently spoke on the issue of the Millennium Dam reservoir, no farmers inhabit the land that the artificial lake would swathe. “Only a hundred or so fishermen work the waters,” he said to a group of journalists, adding that measures are being taken not to disrupt their livelihoods during the construction of the dam. “Once the lake accumulates, however, they will have a field day.”
Environmental advocates are worried about more, nonetheless. Apparently, the forests that line the path of the river will disappear, exacerbating the desertification of the region, they claim.
A proclamation that was ratified by parliament six years ago states that projects should incorporate environmental impact assessments performed by the investors themselves. The role of enforcing this law was bestowed upon the Environmental Protection Agency (EPA), along with the power to request revisions on the projects, revoke implementation or grant go-aheads based on its findings. Observers say the law is not being enforced, however. Besides a few large-scale projects that opted to perform the mandatory assessments, no such studies are performed by investors, these sources claim, asserting that current practices have the performance of the assessments done on a voluntary basis, left to the whim of the investor.
This rift in execution of the law came as a result of the business process recently re-engineering the EPA, leaving the follow-up and enforcement of the law to sectoral offices, according to informed sources.
The Ministry of Agriculture, for instance, is mandated with forestry management and preservation, on top of administering land concessions to investors. Environmental advocates, however, feel responsibility pertaining to forestry should lie elsewhere – with an independent organization. “The [agriculture] ministry’s priorities lie with farming, and the environment tends to get neglected in the process,” Forum for Environment director Nigusu Aklilu told journalists last week.
The FAO estimates that in order to feed the world’s projected population in 2050 — some nine billion people — agricultural production needs to increase by an annual average of one percent. The Karuturi project may help cover part of the USD 44 billion a year that the FAO says must be invested in agriculture in poor nations to halve the number of the world’s hungry people by 2015, according to one report.
Chilling statistics add further doom to the gloom stating that “grain stocks are at their lowest levels in 60 years; global warming is turning arable land into desert; freshwater is dwindling; and the really big problem that contributes to all the others — the world’s population is growing by 80 million hungry people a year,” as reported by Emergent Asset Management, a UK and South Africa-based think tank: consequent reminders that such practices of land leases and purchase, and the ensuing debate that beg to be addressed are here to stay for a long time to come.