Have Indian farm investors bitten off more than they can chew in Africa?

That's the question Aman Sethi asks in one of the surprisingly few articles that asks how the wave of farmland investors from India into countries like Ethiopia have fared.

Most of what usually comes to light are the public relations-type announcements of the millions of dollars one or another company is said to be investing into a country. There is usually little or no explanatory detail behind the numbers meant to impress. In the following years there is often even less information about the inevitable challlenges of establishing a project from scratch in a new environment.

As an example of what he calls the 'bitter harvest' being reaped by some Indian farmland investors, Sethi cites Emami Biotech, which withdrew from a 40,000-hectare biofuel plantation in Ethiopia just a year after it started in 2009.

The best known and biggest Indian investment in Ethiopia is Karuturi Global's rose and food crop operation. It is cited as both an example of Ethiopia's success at attracting large scale investment, as well as an example of a new type of 'land grabbing' colonialism. Seth says questions are being asked about the capacity of companies like Karuturi to manage a landholding as large as its reported 100,000 scattered hectares.

Although biofuel projects have been failing in many countries over an as yet unviable business model, Emami

cited as among its reasons for its pull-out lack of full cooperation from the Ethiopian government, insufficient water access and land disputes with resentful local communities who had not been consulted. An Ethiopian government official is reported to have laid the blame on Emani's failing to do its homework adequately.

An analyst quoted for Sethi's story speculates that when Emani found that jatropha biofuel wasn't going to be the next liquid gold just yet, it then sought land more suitable for food crops. Apparently the Ethiopian government was not impressed and was in no hurry to cooperate to save Emani's hide. In any case, that would have been a very different business plan than the one for which Emani originally raised investment funds, so at that point (the realization of the unviability of the jatropha project) the company was already in deep trouble.

Sethi's article (Indian firms reap bitter harvest in Africa) should be required reading for the many aspiring, inquiring would-be-investors who seem to think that normal due diligence, research and preparation do not apply to tapping into Africa's business opportunities.

Chido Makunike

African Agriculture

Liberian president 'aware' of land grabbing complaints

Liberian president Ellen Johnson Sirleaf is generally treated as democratic hero who has brought a measure of stability and the beginnings of post-war development to her country. In 2011, just before an election that won her a second term, she was the joint recipient of a Nobel Peace Prize.

But her tenure has gradually been dogged by controversy, including charges of nepotism after she appointed three of her sons to senior government positions, and rumours of corruption..  

Also increasingly controversial has been the growing perception that Sirleaf's government doles out agro-forestry concessions to foreign firms too freely, and that the agreed conditions greatly disadvantage local communities.

Touted by the government as an important element of post-war recovery and development, critics fear that the land leases and local disgruntlement could be creating the conditions for future conflict. Some activists say up to a third of the country's land mass has been leased to investors for logging, plantations and mining.  

During an address in London, England in October, Sirleaf said her government was aware of the complainst and would be reviewing the lease agreements.

African Agriculture

World Bank rejects call to halt land deals

The World Bank has rejected a call to suspend its involvement in large scale agricultural land acquisition following the release of a major report by the international aid agency Oxfam on the negative impact of international land speculation in developing countries.

 “We share the concerns Oxfam raised in their report,” the bank stated in an unusually lengthy public rebuttal to the Oxfam Report. “However, we disagree with Oxfam’s call for a moratorium on World Bank Group…investments in land intensive large-scale agricultural enterprises, especially during a time of rapidly rising global food prices.”

IPS

Senegalese villagers vow to fight biofuels project over land claims

Villagers from northern Senegal vowed in August to fight a project by Senegalese and Italian investors to produce biofuels on their land, a venture already forced to relocate once by deadly protests.

"We will fight those who want to take our land. It is the land of our ancestors, an area of 26,000 hectares which houses villages, thousands of heads of cattle, mosques, cemeteries," Oumar Ba, a representative of a collective of affected villages, told journalists. "Whoever wants to take our land will first walk over our dead bodies," said Ba, who lives in the village of Ndiael in the region of the same name.

The Senegalese-Italian company Senethanol/Senhuile had recently announced it was moving the project from the village of Fanaye, where violent protests in October 2011 left two people dead, leading government to suspend the venture.

Senethanol/Senhuile wants to grow sweet potatoes for the production of biofuels, a renewable energy source which has soared in popularity as oil prices rise and concerns grow over emissions from traditional fuels.
But the organisation is again encountering resistance at its new project site.

The United States and Brazil are the biggest producers, but investors have been criticised for buying up large swathes of land in Africa to produce fuel to be exported to their nations.

Senethanol/Senhuile has denied its project is an example of land-grabbing, and last year described it as "an unquestionable interest in the improvement of the economic and social situation of the villages concerned and all Senegalese."
 
 "The case of Fanaye must serve as a lesson to authorities," said Marieme Sow of the NGO Enda Pronat, who denounced "land-grabbing in Senegal by multi-nationals." "We are making this appeal for government to realise that 60 percent of the population of this country is made up of farmers who need this land."

Senegalese rap group "Bidew Bou Bess" (New Star in the Wolof language) presented a song called "Don't Touch My Land" to journalists. "Let's block the road to those who want to plunder our land. Let's stop those who tear up our land. They want our land for profit. They are colonising us, they are using us," the song said.

PhysOrg

Malaysian palm oil investment in Liberia causes dislocation crisis

It's now an almost boringly familiar story: the central government negotiates to lease huge chunks of fertile countryside to a foreign investor who promises to bring 'develoment,' jobs and many other benefits. Local communities are told little about the land giveaways until they are displaced. Few jobs or other benefits materialize for the locals and resentment sets in.

In this case its about a Malaysian company developing palm oil plantations in Liberia.  

'Angry villagers accuse Sime Darby of cutting a private deal with the government and failing to consult them. Last December, they rioted against the company, seizing its bulldozers and blocking the plantation project. They say their crops are gone and their sacred lands are desecrated. The jobs, they say, are too few and too poorly paid, especially now that they’re forced to buy their food in the marketplace rather than growing it.'

“Everybody made mistakes on this,” Liberian President Ellen Sirleaf Johnson told the villagers. “More consultations and more talks with the people should have taken place.”

Considering all the publicity about how frequently these sort of "mistakes" have happened in so many other places before, this sounds pathetically weak coming from the Liberian president. 

While dispossessed farmers are clearly victims, that does not necessarily mean they are innocents in the matter. Lump some payments that were offered and eagerly accepted seemed like a fortune "until the money runs out and they realize they’ve got nothing to fall back on."

One farmer was paid $130 for his two acre farm. We are told he is now contract worker for the palm oil plantation, 'getting 3 cents for every hole that he digs for a palm seedling.' Not only is his income now less than what he is said to have earned before, his loss is far more than just financial. 

Blame poverty, lack of education. But where was the government when its citizens were giving away their heritage for a few pieces of silver? Obviously too busy doing deals with the investor to think of more robust protections for its citizens in signing these deals.


Calling it a "mistake" sounds awfully hollow of the Liberian president.

 African Agriculture

Herakles' palm oil plantation in Cameroon: progress or a disaster waiting to happen?

by Chido Makunike

Cameroon's location in the heart of the central African tropics makes it ideal for palm oil cultivation. Not surprisingly, the new rush by foreign investors for African agricultural land has not left fertile, lush Cameroon unaffected.

An excellent July 18 Reuters special report  highlights some, but far from all, of the reasons the new wave of foreign investments in African farm land are so controversial.

World demand for palm oil has doubled since 2000, we are told, and farming it in the traditional Asian growing countries (Indonesia, Malaysia) has increased challenges and costs. So investors are increasingly looking to central Africa.

Herakles Farms, owned by New York venture-finance firm Herakles Capital, is one of many investors with plans for huge palm oil holdings in Cameroon. As with all such investments, they promise Cameroonians 'steady work, roads and health care.'  

But not everyone is jumping up with joy at the Herakles investment. The concerns expressed are now familiar to anyone who has kept up with the land investment rush in recent years. There are allegations of traditional and government leaders doing shady deals behind the backs of the people they lead, fears of displacement and loss of livelihood; and there is also scepticism about the various benefits promised. Will the jobs and other social benefits promised be equal to or exceed the resource-mining, the permanent changes to the society? Without details (and monitoring) of the promised 'steady work, roads and healthcare,' it is impossible to say. 

Herakles is also accused of being under-handed in various ways in how it solicited local community input about its investment plans.


The article depressingly shows that despite years of heated debate about the pros and cons of these large-scale farming investments, very few of the main reasons for conflict have been dealt with by governments or investors.

For the investors, doing business with strong-arm governments that have little regard for the opinions of their people buys them a sort of 'stability' in often socio-politically volatile investing environments. Yet the times have changed to a more open, informed era in which it is no longer quite as easy as before to repress people with complete impunity. Even where government guns can keep a sullen, unhappy population under control, for investors there is now a considerable potential financial and reputational cost to being seen to be in bed with governments that neither respect nor represent their people well.

One fear expressed by some of the locals is that the proposed new Herakles palm oil plantation ("over 60,000 hectares of land - 10 times the size of Manhattan") will remove from community use one of the few remaining areas suitable for viable food cropping. Will 20, 30 or 40 years of mostly low-wage 'steady work' compensate for this kind of loss?

Speaking of steady wage-labour, which are the kind of low-range jobs that will be mostly on offer, it is a toss up whether such jobs mean an overall improvement in the livelihoods of the workers concerned, and of the communities. When the workers have these tenuous low-wage jobs as well as access to their traditional farmlands for the rest of their families to continue to work, it could be argued that the long-term security and earnings synergy of the  two income streams does indeed lead to greater security.

The lack of much of a cash economy in remote, poorly developed rural areas often wins the day in the argument over whether to allow/welcome investments such as that proposed by Herakles. The attitude is 'any jobs/steady income is better than subsistence farming.'  But if an extended family is giving up their ancestral land (the source of food security, cultural grounding, 'belonging,' independence, etc) for one or a handful of its members to have wages, the net gain is highly debatable.

But a huge investment such as that proposed by Herakles will act as an anchor for other kinds of investment in the area, won't it, increasing job opportunities and general economic prospects, won't it? Not necessarily, and certainly not automatically. In the absence of a dedicated plan to lure accompanying services to the area, those 'new opportunities' that will spring up on their own are likely to be brothels, bars and so forth. Single large agricultural or mining investors that come to dominate an area have proven this general rule all over Africa, and many places elsewhere.

When the large extractive investor pulls out for whatever reason, even  after a decades-long presence, there is often pitifully no long term 'development' left behind. Where there hasn't been a long-term plan between the area-dominant investor and the government, not only does the 'steady work' evaporate, so do the means/resources to keep the local school and clinic running. In addition, the environmental mess and the social and cultural dislocation is often such that the community can no longer simply resort to their previous subsistence agricultural existence. 

This is the reality of many similar investments all over Africa. One would have hoped that all these previous experiences would inform the discussion between Herakles and the Cameroonian government, but there is little indication that this is in fact the case, at least from reading the Reuters article.

The main investment driver's stated motivations are fascinating to hear.   
Bruce Wrobel, chief executive of Herakles Farms, is not the stereotypical culturally deaf and blind foreign investor who cares about nothing else as long as he has the minister or president's signature/protection.   

Reuters tell us that, "Since a 1999 visit to West Africa during the civil wars of Sierra Leone and Liberia, Wrobel's aim has been to mix business with philanthropy in order to assist the continent." 

Wrobel's do-gooder credentials are further bolstered by how he 'helped cut telephone costs for millions of East Africans, he says, via his fiber-optic cable joint venture Seacom. A hydro plant run by his Sithe Global Power company in Uganda has reduced power blackouts there.'

But all this impressive 'helping' that he has done was in the course of doing business for profit, which is fine, even good; certainly much better than the unsustainable, unsuccessful brand of aid-based do-goodism that has been inflicted on Africa for decades now. Where governments are alert and responsive to their people's needs, for-profit investment certainly has much more potential to be harnessed into long-term development than aid-based 'projects.'

Strangely, Wrobel out seems to be conflicted about whether he wants to do ethical for-profit business in Cameroon, or whether he is primarily going there is a Peace Corp worker.    

Listen to this mushy mumbo jumbo from Wrobel: "Our big concern is that over a relatively short period of time there will be no way for the African consumer to compete with the Chinese and the Indian buyer. That could lead to some of the types of instability and food riots that we saw a few years back."

Wrobel may well be a genuinely good guy who is sincere in his do-gooder rhetoric. But part of the history of the foreign exploitation of Africa over the last 100 years or so is that very often, the exploiters have claimed to be motivated by pity for Africans. It is tired, it is old, and it is increasingly met with suspicion.

If Wrobel really wants to show a new model of ethical farming investment at a time of growing scepticism, the best way he can do so is by practically showing that his Cameroonian palm oil venture has thought about and is addressing the many doubts and worries about such enterprises.  

 African Agriculture

 

Has Saudi Star learned right lessons from deadly anti-'land grab' attacks on its Ethiopian farm?

Chido Makunike

Major agricultural investor in Ethiopia, Saudi Star, has bigger problems there than it might have expected.

Negative publicity regarding Ethiopia’s aggressive drive to attract foreign investors into its agricultural sector has been relentless in recent years. The government is accused of brutally relocating communities to make way for the foreign investors, a charge it denies.

But now the local resentment has boiled over. In recent weeks there have been a number of reports of fatal armed attacks against Saudi Star. Ethiopian employees and Pakistan sub-contractors of the company are said to have been killed by groups thought to be opposed to the land give-aways, the government, or to both.

In a statement in response to what it said was the killing in late April by armed men of at least six Pakistanis and four Ethiopians, the Solidarity Movement for a New Ethiopia (SMNE) summarized the reasons for ill-will against Saudi Star and other big investors, and against the government.

The SMNE statement said the assailants attacked a group of workers being dropped off at their company residential compound at the end of the day, as well as the Pakistanis (‘‘allegedly agricultural experts hired by Saudi Star’’) working in the offices. The statement claims that soldiers guarding the site ran away rather than confronting the armed gunmen, and only returned later to pick up the dead and wounded. A few policemen who tried to resist the 15-minute attack were apparently overwhelmed, one of them also being killed, and the gunmen were able to escape.

Says the SMNE, ‘‘These deaths could have been prevented. Since 2009, we have been calling for transparency and inclusion of the local people in the decision-making surrounding the long term leasing of agricultural land in Ethiopia to foreign investors and regime cronies for next to nothing.”

It then goes on to mention human rights abuses many other reports and organizations have alleged are associated with the Ethiopian’ government’s relocations and the land-leasing drive.

Getting to the crux of the matter, SMNE says, ‘‘Neither the Meles regime, Al Amoudi (the owner of Saudi Star) nor any other investor should expect there to be no reaction to these “takeovers” of land and water sources from the people whose ancestors have claimed this indigenous land for centuries. When they take away land and water, they take away the means to sustain life for the people. Some Anuak (the predominant ethnic group of the area in question) have said they now are waiting to die; others will fight. This should not come as a shock to anyone.’’

The presence of soldiers and policemen shows there was a realization of the potential for trouble. Other investors have almost boasted about the government’s protection of their farms, and the implied sense of security that provides. Yet the very need for these farms to also be armed camps, probably more so from now on than before, is a big part of the investors' problem. If feelings against them are so strong that there are groups willing to go as far as to confront the government’s on-site security forces and to commit mass murder, this is a heightened element of investment risk. It needs going back to the drawing board to think of how to relate to and engage with the locals, rather than merely to hire more guns and effect more ruthless security measures.

Yet the latter is exactly what the SMNE fears. It says, ‘‘Indigenous people fear collective retaliation by security forces…(prime minister Zenawi) Meles will crack down on all the people. It is the blueprint of their regime and they have done it many times before. They will try to hunt down the rebels in the bush, but they will be hard to find so in their frustration and in order to teach a “collective lesson” they will target the local people.’’

The ‘rebels’ may have other long-standing grievances with the government, but the deep unpopularity of the ‘land grabs’ has given them a powerful, emotive new issue to champion. In an already volatile situation, a foreign investor who makes no effort to respect and engage with the local communities becomes a very easy target for pent-up frustrations. This is especially so when the locals are dispossessed and treated with contempt, when no significant local benefits from the investment are apparent, and when they become thought of as allies and enablers of central government authorities the locals may consider as a significant part of their woes.

It is not a good way for a foreign entity to start a long-term investment!

If they didn’t know it before, Saudi Star seems to be slowly waking up to the fact that they might have a problem that will not go away simply because they have the protection of the government.

A May 30 Bloomberg report, ‘Saudi Star Offers Jobs to Overcome Criticism of Ethiopia Project,’ says offering ‘jobs and training’ to locals will be a key part of how it counters opposition.

‘Jobs and training’ are almost always mentioned as some of the major benefits that will accrue to locals as part of the controversial new wave of farmland investments. The locals perhaps weren’t told about this in this case, didn’t believe it or haven’t seen those jobs materialize since 2009, when Saudi Star’s rice project began.

But apart from that, it may be too late to easily appease the locals with promises of future ‘jobs and training.’ The importation of foreign ‘agricultural experts’ in the absence of accompanying training of locals will only have inflamed feelings even further. Local suspicions and resentments of investors and the central government are likely to be much higher and harder to overcome now than would have been the case if both parties had taken local sensibilities into account right from the conception and initial implementation stages of the project, rather than as an afterthought of an attempted public relations exercise three years later.

Besides, ‘jobs and training’ are not the only concerns now. They cannot compensate for the humiliation and resentment at alleged forcible relocations to make way for companies like Saudi Star. All over the world, governments often have to move people for reasons of what can be broadly considered the common or national good. But there is ample evidence,also from all over the world; that there are right, good and effective ways to do it, and that there ways to do it that only cause many short and long  term problems. These are the kind of big issues of ‘development’ that once poorly done cannot simply be corrected by offering some ‘jobs and training.’

According to the Bloomberg article, Saudi Star’s Chief Executive Officer Fikru Desalegn believes that ‘providing employment for residents of the Gambella will “definitely teach the public it is very useful for them,” Fikru said. Other benefits for the 13,000 residents of the area will include investment in infrastructure such as roads and vocational education by the company, he said.’

All this remains to be seen, not only in whether it materializes, but also in whether it will be sufficient to assuage the deep local grievances about the manner in which foreign investors have been suddenly thrust among them.

Meanwhile, ‘Work has resumed on the Saudi Star project and the federal police are guarding the area, Fikru said,’ Bloomberg tells us. “All the culprits were caught,” Fikru said. “Things are normalized. All our contractors are back to work.”

But are things really ‘‘normalized,’’ or are more soldiers and police simply going to cover up the many abnormalities for a while, until the next flare up of violence?

The style and manner of ‘land grabs’ or investments (take your pick) unfolding in Ethiopia has precedent in other parts of Africa, and indeed elsewhere. So much attention is paid to the potential benefits for investors and central government that little attention is paid to the sensibilities of communities. But land grabbing history in Africa and elsewhere has shown that these local communities, typically thought of as ‘backward’ and against outside efforts to ‘develop’ them, can get their comeuppance in unexpected ways, at a loss to all concerned.

It didn’t have to be this way. More humility and sensitivity to local concerns from the beginning by both the host government and sometimes just as arrogant investors could have resulted prevented some of the predictable but still alarming backlash against companies like Saudi Star.

In the recent land rush, it is astonishing how often it appears that otherwise smart people with millions of investment dollars at their disposal fail to ask some important basic questions before sinking their teeth into big projects.

It will be fascinating to watch how things develop with the Saudi Star and other investments in Ethiopia in the in the near and long term.

African Agriculture

Fears that DRCongo law favoring nationals in farm ownership may scare off foreign investorsn

A new law requiring nationals of the Democratic Republic of Congo to be majority shareholders in farms has caused concern about its effects on the country's image as an emerging agricultural investment destination.

The new law, passed in December 2011, provides tax breaks and other incentives designed to kick start investment in agriculture in the DRC, which imports much of its food requirements despite being a vast, fertile land mass. War and the country's many political problems over several decades have decimated much of what local agriculture used to take place.

But it the clause of the law requiring Congolese to be majority owners of farmland that has raised concerns that potential foreign investors will be scare off from the country, while few nationals will have the means for significant new farming investment.

African Agriculture 

Land conflicts cause South African sugar investor to abandon Tanzania for Mali

A subsidiary of South African sugar concern Illovo has given up a ten year effort to set up a plantation in Tanzania over long running land squabbles with locals. The Tanzania Daily News reported in January that the company is now seeking to establish the operation in Mali.

Kilombero Sugar Company had initially planned to invest in about 8,000 hectares out of a potential 23,000 hectares for cane cultivation, but the endless compensation claims from locals them decide the project was more trouble than it was worth.

The Sugar Board of Tanzania (SBT) is reported to have said the total land, if fully developed, had the potential to produce 240,000 tonnes of sugar every year. Tanzania suffers from periodic shortages of sugar which have to be plugged with imports.

Many villagers had refused to vacate the land, and others engaged the courts in long-running disagreements over fair compensation for their land. An agreement by the villagers in 2011 to seek an out of court settlement to the dispute was achieved when the investor had apparently lost interest.

An SBT official is reported to have ‘blamed politicians for instigating confrontations between villagers and the investor.’

A company official said Kilombero had given up its efforts to set up the plantation in Luipa, Kilombero District of Morogoro Region and was pursuing opportunities in Mali, which “has friendly investment policies and good incentives."

An editorial in the Daily News put the blame on government for not compensating the villagers as stipulated in the country’s land laws.

Authorities are making fresh moves to attract new investors.

African Agriculture

Why agri-investors should consider sustainable farming and good community relations

Almost all the land deals that foreign investors are engaged in, whether in Africa or anywhere else, are based on typical high-inputs industrial farming, including extensive use of fertilizer and agro-chemicals. These methods have become standard for large scale farming everywhere, and the cost of inputs that are needed to get a certain return can be fairly narrowly calculated, helping investment decisions.

Alejandro Litovsky argues that in investment destinations where the soil is still relatively fertile, less inputs-intensive farming could offer benefits and should be explored.

He says, “Managing soil erosion, ensuring human security and keeping within ecological limits, especially regarding water, are risks to the long-term value of the land, the portfolios of investors and the economic competitiveness of host countries. As global agribusinesses face growing social and environmental pressures, investors seeking to manage the resulting risks will require an innovative approach to risk management: including ecological limits and human security in the agricultural equation.”

Litovsky says “Large-scale farming still operates in the bygone world of the Green Revolution relying on the heavy use of chemicals and intensive, mono-crop cultivation as a means to boost agricultural output.” He goes on to suggest that agro-investors might want to invest in organic farming instead, “to ensure the long-term value and resilience of the soil.”

What Litovsky suggests may be sound from many perspectives including even eventual cost-saving and profitability, but it arguably involves a mind set that is fundamentally different from that of most agri-business, where the land and every other chain of the process, including humans, are simply factors of production. While the need for a tractor maintenance budget may be obvious, stereotypical agribusiness thinking may not include the time, effort and resources to devote to soil maintenance.

One of the criticisms of agribusiness is that it is akin to mining: you keep extracting the natural resources until they are finished, and/or pump ever more ‘inputs’ to get outputs. The decline of natural soil fertility is countered with increasing application of fertilizer. That is just an accepted part of the whole philosophy of industrial farming which it would likely be very difficult to change for most agro-investors.

“So too agricultural models can better integrate networks of smallholder farmers into a radical rethink of their business models, to build the social resilience,” writes Litovsky.

There are certainly some agribusiness who use this ‘hub and spokes’ model, but for many others, it is simply too much trouble. They much prefer to have centralized production that is entirely under their control for all sorts of reasons.

Litovsky states, “Given the typically low levels of government accountability in sub-Saharan Africa, land investments, even if entered into by well-meaning investors, can have dire consequences for local communities. The unintended risks to human security may be significant, whether because these communities are forcibly evicted from the public lands they have cultivated, often without formal rights, for generations, or because new irrigation schemes jeopardize water availability for small-scale subsistence farming.”

This is all true enough. There has been so much negative global publicity about ‘land grabs’ that no investor can be said to enter into these modern mega deals without awareness of these issues. But to be aware of them is not the same as being concerned about them. For many investors, the consent and protection of the host government is all they care about. There are countless current examples of how Litovsky’s perfectly valid argument that to protect their long term interests, investors should pay heed to more than the bare minimum of their contractual requirements with their host governments is ignored.

As for building social resilience, where the agro-investment is as a result of some sort of land ‘grab’ by the host government from the local communities, the investor not only comes in with bad relations with those communities from the beginning, he may not much care about good relations with them. Investors whose holdings are protected by armed police or soldiers are not unheard of, which may make them feel physically secure but automatically sets them apart from locals and makes the investment more precarious in the event of political change. It would seem to make sense, even from a purely business level, for a foreign investor to cultivate ‘social resilience’ and good community relations, but this seems a priority for surprisingly few investors.

Litovsky understands that appeals to the common global good may not make much of an impact on the thinking of many investors eager to turn a profit, and seeing no particular benefit to questioning a decades old agribusiness model. His answer to that is that “Incentives for pursuing these innovations are more likely to arise from fully understanding the risk challenges involved in the current model than from appeals to global sustainability.”

Alejandro Litovsky’s article, ‘Farmland security,’ is a thought-provoking read.

African Agriculture

Is Ethiopia repeating Zimbabwe’s colonial-era land tenure mistakes?

by Chido Makunike

Ethiopia seems to feature more than any other African country in the charges of accommodating large land deals or land ‘grabs’ (choose depending on your bias) by foreign farming investors.

There is controversy about almost every aspect of them. Are the terms of the deals not too much in favor of the investors? What are those terms exactly? Will the host countries benefit much from them, or will they mostly be another type of resource plunder? How can Africa’s mostly communal land tenure systems be made compatible with commercial land leasing and ownership systems? Does the big new role of foreigners in answering that long outstanding question not create resentment and foster resistance to these deals?

Controversial as the deals may be, is it not necessary and unavoidable that at least some communal land gives way to high-intensity commercial use of one type or another? Has this not happened everywhere else in the course of ‘development?’ In respecting traditional communal land tenure indefinitely, would governments not actually be condemning many of their most vulnerable citizens to perpetual poverty, given declining soil fertility, increasing population pressures, climate unpredictability and so on; all factors that increasingly threaten the viability of rural life?

But then again, in countries where many have little else on which to sustain themselves except subsistence farming, is removing rural communities from their lands and livelihoods, no matter how basic, to make way for commercial farming not condemning them to an even more uncertain fate in new, unfamiliar territory?

These are just a few of the questions that face nearly all African countries, even those not currently in the news for ‘land grabs.’ These are issues that long preceded the current wave of land deals. None of the range of answers is as easy or straightforward as either supporters or opponents of the current deals would suggest.

Governments, investors and many others in between have often taken very simplistic positions on the land deals that leave out many of the complicated nuances. Media and various non-government organizations with their own rigid ideological or commercial interests at stake in supporting or opposing the land deals have only added to the confusion.

In making aggressive moves to develop a commercial agriculture sector, in many ways Ethiopia is going where Zimbabwe has been.

In certain media, any mention of Zimbabwe must automatically go hand in hand with phrases such as ‘Mugabe’s land grabs’ and the country ‘went from regional farming breadbasket to basket case.’ The idea is to emphasize the recent disruption of a system of title deeds-based farmland tenure that was long taken for granted, and a sophisticated, thriving commercial farming sector that was widely admired. ‘Mugabe’s land grabs’ from white farmers from about the year 2000 changed much of this. The country experienced several years of economic decline which it only arrested a few years ago, and is still  battling to rise from.

As successful as the ‘breadbasket’ was, the considerable emotion that events in Zimbabwe elicit in a surprising number of people even far removed, means that there is little interest in going back a little in history to see the roots of the eventual dismantling of the land tenure system that gave rise to it. How did that commercial, Western-style farmland tenure system come about?

It came about in ways somewhat similar to what is being alleged the present Ethiopian government is doing in displacing rural communities to make way for foreign farm investors.

From the early 1900s, white settlers in the then Rhodesia were given by the colonial governments huge parcels of land from which Africans had been uprooted. The ‘villagization’ that the Ethiopian government is said/accused to be embarking on today sounds vaguely similar to the ‘tribal trust lands’ to which Africans were forcibly moved by colonial governments from the early days of Rhodesia.

In both cases, the main reason was to give prime land to the favored elite of the time, whether white settlers then in Rhodesia or investors in Ethiopia today. However, incidental benefits for the displaced communities were also cited as justifications for the land grabs. In Rhodesia, it was said that the concentration of once widely scattered communities into fewer, smaller areas would make it easier for the colonial government to provide them various services, such as agricultural extension, schools and so on. In Ethiopia today, relocations which critics say are forced and violent, but which the government insists are voluntary, are explained as being to better enable access to schools, clinics and other basic social services.

Few of Rhodesia’s early white settlers had any farming experience at the time of getting land which had been grabbed from Africans. Many were rewarded with land for their role in African conquest, and some as thanks from then colonial power Britain for their service in Europe’s early 20^th century civil wars.

Title deeds-based land tenure on the grabbed land replaced the traditional communal tenure system of the dispossessed Africans. It was on this grabbed land that successive colonial governments supported the new land holders to develop into the impressive commercial farming sector that powered Rhodesia’s economy, and later Zimbabwe’s.

From a distance and from outside, and for a while even in the country itself, all that appeared on the surface was the farming and economic success. Below the surface, the sense of  grievance on which these successes were built was muted as long as the Africans enjoyed some of its crumbs, as farms workers or in the many downstream industries that resulted. But it never went away. It might have appeared as ancient history and finished colonial business for the then well-established descendants of the original white settlers, but it was a quietly present and continuing ‘issue’ for many Africans. The period from the colonial land grabs of the early 1900s to independence in 1980 was short enough that there were still many people alive who had personal memory of how they were chased from family lands, their cattle expropriated; forced labor and various taxes imposed on them. These stories were passed on from generation to generation in every African family.

The sense of African grievance that continued to fester over the land issue meant that all recognized the need for some type of land reform after 1980. One reason mostly polite discussion dragged on about the issue was the difficulty of how to raise the money to compensate the white land owners for any ceding of land to Africans they might agree to. In other words, the title deeds they held on land that had been grabbed from Africans several decades before were by most people seen as inviolate.

There was no talk, or very little, of invalidating the land deeds of black-ruled Zimbabwe because the land had been grabbed from Africans several decades before. It was sort of accepted that land reform negotiations would start on the basis and from the starting point of the colonial, title-based land tenure system, not the traditional African communal system that existed before that.                    

One of the reasons that ‘Mugabe’s land grabs’ have been so controversial, even emotional for many people, including those not directly involved, is that he invoked not the colonial title deed as the basis for land ownership legitimacy, but the land ownership rights of Africans before that; the ones that were grabbed from those Africans by the colonial governments. This was a very new post-colonial precedent that worries and outrages many people for all sorts of reasons not necessary to get into for the purpose of the present discussion.

Zimbabweans of all types were proud of their relatively developed, diversified economy and the ‘breadbasket’ commercial farming sector that underpinned it. All Zimbabweans suffered from the economic crisis that followed the recent land ‘re-grabs’ that were not well thought out. But it is interesting and important to note that there wasn’t/isn’t any  significant African sentiment for those land re-grabs to be reversed. Most Zimbabweans  want the land reform process and commercial agriculture fixed, but probably very few would advocate for the status quo to go back to the system of title deeds that originate in the era of colonial land grabbing.

If the old system of title deeds-based security of tenure is deemed illegitimate on the basis that they were issued on grabbed land, how is a new system of security of tenure to be built to give people the incentive to invest in land and ‘commercial’ farming again? Once today’s communal land has become a fully tradable commodity, how do poor rural farmers gain access to land and avoid being further marginalized by the few who can afford to buy it and acquire title deeds?  Despite the increasingly apparent problems plaguing it, is Africa’s communal land tenure system really outdated and to be discarded, or does it still serve useful functions that no other system can fully do? Could the traditional communal system and a new title-based system co-exist in the same area?

There are many answers proffered, but none that are universally accepted or that address all the related historical, legal, cultural, political and economic issues easily. 

It is easy to see the mess that this presents. For example, suppose you were a white farmer with a title deed in 2000 that lost his farm to the most recent ‘land grab.‘ What about if you had not inherited the land from an early 1900s British settler ancestor, but had bought it from the son or grandson of such a settler? Is ‘Mugabe’s land grab’ not clearly, obviously illegal and unfair to such a title holder? But what about if you were an African farm laborer on that same land, whose grandfather had been the early 1900s land holder from whom the land had been grabbed by the colonial government. It was then given, with title deed, to the white settler whose progeny then eventually sold the land and its title deed to today’s white farmer of my example.

Whose ‘ownership’ and whose ‘justice’ should prevail, and why?

If the colonial land tenure system was widely seen as unjust and illegitimate, clearly it is no longer possible or desirable to go back to the pre-colonial communal system, at least not on what had become ‘commercial’ farms. The people and times have largely changed. The need for that land to remain ‘commercially’ useful is recognized by all. Having demolished the system that existed for decades for its political/historical incorrectness, how do you build a new one that is politically correct while also giving land holders the room and incentive to invest and be productive? It is very far from straightforward.

To get back to today’s Ethiopian ‘land grabs,’ what is or isn’t happening in that country is from a distance very murky. It is almost impossible to accurately gauge the objectivity of the reports of those who slam or support the new land deals.

However, part of the lesson of Zimbabwe is that particularly in mostly agrarian societies, perceived ‘land grabs’ can set up a multiplicity of new problems decades after it appears they have been accepted as irreversible. Regardless of what impressive modern edifice is built upon land that there is majority consensus was unfairly ‘grabbed,’ especially in favor of ‘outsiders,’ there for a very long time will remain the explosive potential for conflict. All it needs is some small spark to set it off. 

Leading Indian agro-investor in Ethiopia, rose grower/exporter Karuturi Global, has been perhaps the most prominent beneficiary of what many people say are the government’s ‘land grabs ’ from its citizens.

Sai Ramakrishna Karuturi, the company’s founder, dismisses the attacks. In a recent interview, he gave some of his perspectives on land and farming in his host country.

”Land is an emotive and contentious issue. Of the 300 million hectares of land we have, only one-third is arable. Africa is better in terms of productivity, costs, taxes, duty-free access to European markets because of their least developed country status. A rose from India, when it lands in Europe, will cost about 14 euro cents and it will be about 30% less from East Africa,“ said Karuturi.

Clearly he is a bold entrepreneur, and no doubt that alone rubs some people the wrong way. As he repeatedly points out, his company is doing nothing without the approval of the Ethiopian government. But if the investment is seen by many Ethiopians as being because of a closeness to the sitting government rather than as being of benefit to the country, Karuturi is inevitably breeding long-term local resentment in addition to roses.

As seen in Zimbabwe, the ‘security of tenure’ and economic success that is built on the mistreatment of the local people may not be as secure as it seems, even if the comeuppance is many decades later. If the political situation suddenly changes, land tenure based on a perceived crony relationship with the previous ruling political dispensation will be one of the first things to be reformed.  

Karuturi has also been quoted as scoffing that many of the attacks on his and others’ land investments in Ethiopia and other African countries is by Western critics who have yet to come to terms with how China and India are displacing the West in many areas of engagement in Africa. While this cannot be dismissed entirely, Karuturi is ironically also making some of the same colonial - style moves that created long-standing resentment not only in Africa, but in his country India as well.

For example, it is quite likely that even for Ethiopians who basically support the investment thrust of their government and welcome the contributions of companies like Karuturi, the company’s widely publicized plan to bring in thousands of Indian tenant farmers to its Ethiopian holdings will be seen as a step too far. It suggests thinking and attitudes that are amazingly reminiscent of the origins of the complicated mix of land-related problems that plague Zimbabwe today.

In the land grabs from Africans of a century ago, the colonial governments obviously did not need to worry about the ‘public opinion’ of the dispossessed, disgruntled Africans. Today, no matter how autocratic a government may be, it is neither advisable nor entirely possible to ignore public sentiment. From a distance, in this regard the Ethiopian government seems to have contributed to the negative perception of the current land deals/grabs by poorly explaining them, and riding roughshod over critics. For both investors and host governments, these too are issues that may have an expensive belated political cost.

Zimbabwe is just one and perhaps the best known, most notorious example of the explosive potential of long unresolved land issues that Ethiopia could learn some lessons from on what to do and what not to do as it seeks to develop and ‘modernize’ its agriculture. It will be fascinating to watch how Ethiopia tackles the clash of land-related issues that have defied easy solution in many other African countries.

AfricanAgriculture

Africa land grabs 'could cause conflict'

The stampede by wealthy states for arable land across Africa and other developing regions could trigger a series of conflicts if governments fail to protect the rights of their people, two recent studies on land grabs warn.

"Controversial land acquisitions were key a factor triggering the civil wars in Sudan, Liberia and Sierra Leone and there is every reason to be concerned that conditions are ripe for new conflicts to occur in many other places," cautioned Jeffrey Hatcher, director of global programs with Rights and Resources Initiative, a US-based non governmental organization.

RRI estimates that a 500 million people in sub-Saharan Africa depend on 3.46 billion acres of communally held farmland that has been a primary target of foreign governments and investors seeking to produce food specifically for non-African populations.

In a December 2011 report, the International Land Coalition, a global network of civil society and farmers' organizations, estimated the global rush for land claimed 494 million acres in sub-Saharan Africa in 2000-10.

ILC zeroed in on West Africa, where it said land acquisitions by foreign entities were causing major environmental and agricultural damage along the River Niger, at 2,265 miles the third longest river in Africa after the Nile and the Congo.

On Jan. 20, two Liberian land campaigners wrote in The New York Times that the government of President Ellen Johnson Sirleaf, co-winner of the 2011 Nobel Peace Prize, was likely "sowing the seeds of future conflict by handing over huge tracts of land to foreign investors and dispossessing rural Liberians."

They alleged that in 2006-11, Sirleaf "granted more than a third of Liberia's land to private investors to use for logging, mining and agro-industrial enterprises.

"Today, more than 7 million acres have become forestry and agricultural concessions," they said.

Some 1.6 million acres went to the Sime Darby Corp. of Malaysia and Golden Veroleum, a subsidiary of the New York's Verdant Fund L.P.

Local communities in the region, where 150,000 of the 1 million people will be disposed without being consulted or compensated by their government, have temporarily blocked the Malaysian company's plans to plant oil palms on 523,800 acres of land leased from the Freetown government.

The company has reportedly frozen its operations following an appeal to the Roundtable on Sustainable Palm Oil, an international certification body.

more…UPI

British forest firm that evicted Ugandan peasants closes shop

A British firm accused by Oxfam International of illegally evicting some 20,000 Ugandan peasants from arable land to plant trees suspended operations in early January, a decision it said stemmed from the withdrawal of $14 million in needed new investment funding.

In a statement e-mailed from London, the New Forest Company (NFC)’s Anthony Silverman claimed they 'lost' an additional $1 million of financing from the World Bank.

Oxfam, an aid and development charity, caused ripples last September when it alleged that NFC forcibly evicted poor villagers in Kiboga and Mubende districts, depriving them of livelihood and money to send their children to school.

Oxfams’s Executive Director Jerry Hobbs at the time said the Ugandan case “clearly shows how land grabbing is slipping through the net of existing safeguards, which are intended to ensure the protection of vulnerable people.”

In response, NFC promised to investigate the allegations it described as “extremely serious” but made no reference to outcomes of the probe, if it ever occurred, in its recent statement.

“Having planted millions of trees annually for the past six years and led the creation of a modern Ugandan forestry industry, we are sad to suspend tree-planting and laying off workers, forcing people back into poverty,” NFC Chief Executive Julian Ozanne was quoted as saying.

more...The Monitor

Nigerian regional government in rice cultivation deal with Spanish investors

The government of Kwara State in Nigeria has signed a Memorandum of Understanding with investors from Spain to develop rice cultivation, processing and packaging. The deal is said to be 'worth 70 billion Nigerian Naira' (1US$ = 163₦ ).'

The state government is to provide 30 per cent of the total cost, including 20, 000 hectares of land. The Spanish investors are to provide the remaining 70 per cent of the total cost of the investment for the period of four years.

The Spanish company and the representatives of Kwara state government agreed that the investment will be in stages. The company is to invest 70 million Euros annually for the period of four years, making a total investment of 280 million Euros. Based on the agreement, the state government will allocate 5,000 hectares of land for the process for each stage.It is expected that each stage of 5,000 hectares of land is expected to yield 40,000 tonnes of rice annually.


more...This Day

Is Indian investment in Ethiopian farms a 'land grab?'

When an Indian company invests hundreds of millions of dollars in Ethiopian commercial farming, is it boosting Ethiopia's food reserves and modernizing agricultural practices? Or is it grabbing land and displacing Ethiopia's poorest citizens?

The debate over Indian-owned Karuturi Global's investments in Ethiopia's Gambella region may sound extreme, but it is representative of the strong emotions one finds across the developing world about the subject of agricultural investment.

In Ethiopia – where critics are aghast at the government for inviting foreign capitalists to grow cash crops for export while millions still rely on handouts – the rancor is hindering much-needed constructive discussion on how to improve a sector of the economy that employs most of the population.

Much coverage of this debate tends to the sensational. A piece by the Guardian, for instance, claimed that there was evidence of displacement because of Karuturi’s rice, palm oil, sugar and cereals operations, but none was provided.

Huffington Post columnist Alemayehu G. Mariam – a vociferous US-based critic of the Ethiopian government – re-reported Karuturi's farm manager's comment that the company had not seen the land before renting it. Managing Director Sai Ramakrishna Karuturi begs to differ. "I stayed in Gambella for 45 days researching the area before narrowing down on the location," he responds.

The tone of these types of critiques – portraying deals merely as agro-imperialism facilitated by a bungling state – enrage officials, sidelining crucial issues and further reducing the already slim chances of engaging the government.

..more...Christain Science Monitor

Foreign farm investors flock to Ethiopia, but food self-sufficiency not in sight

by Keffyalew Gebremedhin

As if it were a rehearsal for year-end message, in early November the ministry of agriculture announced, “Ethiopia is working towards commercializing agriculture and [realizing] its full potential to provide each household surplus and income for its growing population.” As an idea that looks to the future, there is nothing wrong with that — except that the officials preferred to be opaque when it came to linking the anticipated outcome with the means they would employ.

This took place at an important regional conference, whose theme was Productivity and Enhancing food Security in Africa: New Challenges and Opportunities, held in Addis Abeba from 1-3 November. The official who represented the government and launched the conference chose to reiterate the usual set position, especially at a time when Ethiopia has continued to be hit harder by inadequate domestic food production and distribution, against the backdrop of double-digit-inflation. Data released by the government on 13 December indicated that in the last one year, inflation has pushed food prices by a whopping 50.3 percent.

Unfortunately, the agriculture ministry even seemed coy to show a vision behind the plan; as the government’s representative limited himself to iterating, “The government has taken strong policy measures to recognize agriculture as an engine of the economy and a means to fight poverty.” This took many people by surprise, since it sounded as if State Minister for Agriculture Wondirad Mandefro was announcing to the conference a new government strategy two decades after the Meles regime seized power and massive resources have been thrown at agriculture, without any sign of the country becoming self-sufficient in food production now or the likelihood of it at in the foreseeable future.

Instead, the state minister stated that the government has been spending on agriculture more than 14 percent of GDP, in his words, “exceeding the target set by Maputo Declaration to meet the Comprehensive African Agriculture Development Program targets.” He then recalled how it was foreseen in the government plan to double agricultural GDP to achieve food self-sufficiency at the household and national level through the growth and transformation plan (GTP 2011 – 2014/15). Not only the GTP is treated these days as an all cure; but also he made it the basis of his prediction of agricultural production.

If the news report is accurate, the official chose to rely on economic growth patterns of the past few years. He then boldly asserted that the economy would “continue to grow with a double-digit for subsequent eight years.” If that is the basis on which the future of the country’s goal of food self-sufficiency is being predicated, I lost him there. What else can one say in the face of such a known trouble ahead, save fearing for the state of the nation and future generations!

One person who was not entirely sanguine with everything he heard at the conference was Monty Jones, the Executive Director of the Forum for Agricultural Research in Africa. He politely took the floor to give a sense of what African countries needed to do. He urged them “to go beyond just research to increase productivity that enables to reduce hunger and poverty.”

As to this year’s harvest, ten days after the conference and in connection with the 2011 harvest season, Ms.Samiya Zekeria, Director-General of Ethiopia’s Central Statistics Agency (CSA), announced that she expected over 218.3 million quintals of output to be harvested from small-scale private farms on over 12.1 million hectares of land this year, according to the Ethiopian News Agency. She reported this represented an increase of 15 million quintals, compared with that of same period last year.

Tentative as this data is, it is difficult to establish whether the increases reflects productivity gains or mere expansion of land under crops. Last year’s CSA data indicated that crop land increased by about 200,000 hectares. Already on the face of this forecast, one is inclined to think that a great deal of work and appropriate policies are badly needed to guide Ethiopia’s agriculture to a better future.

Not long ago FAO’s Assistant Director General Hafez Ghanem alerted African journalists as to the what culprits are lurking behind the rise in food prices the world over. While he emphasized that agricultural investments alone are not sufficient conditions in and of their own, he urged each country to examine its particular conditions more seriously and adopt appropriate polices, instead of clinging to everything that is being presented as causes for the rising food prices.

The need for such an approach, he said, should be given sufficient consideration since “The available data show that the situation is different in each country. In some countries, price rises have meant higher prices for farmers, while in others this is not the case, which is generally the result of the fact that governments are hindering the transfer from the global market to the farmers.”

To the thinking of the assistant director-general, Ghana represented an example of a successful country regarding agricultural development. He observed in that regard:

Notwithstanding the fact that Africa still has a long way to go in the battle against hunger, even so, despite everything, [the region] has recorded some successes in this area. Take the case of Ghana in particular. This country has succeeded in achieving its Millennium Development Goal 
(MDG) aiming to cut the proportion of its population suffering hunger by half between 1990 and 2015. It did so by supporting its farmers in two important and priority sectors: public investment, particularly in research and development (RD), and ad-hoc policies, which specifically allowed farmers access to seed and the market. These were measures which had been adopted in other countries and explain their relative success.

This reminded me of a news item I read in late August from the association of coffee producers in southern Ethiopia, which wrote a letter to the prime minister and the National Bank of Ethiopia (NBE) urging them to take urgent measures to tide the growing shift by his members to the production of khat, a stimulant crop in young nation, for lack of bank loans and credits.

Looking at the problem from the economic, financial and land tenure angles, experienced by Ethiopian farmers, Atkilt Admasu and Issac Paul came with new evidence of misguided policies in their ASSESSMENT ON THE MECHANISMS AND CHALLENGES OF SMALL SCALE AGRICULTURAL CREDIT FROM COMMERCIAL BANKS IN ETHIOPIA: THE CASE OF ADA’A LIBEN WOREDA ETHIOPIA, published in the Journal of Sustainable Development in Africa (Vol 12, No.3 2010). Their study found out:

…Agricultural credit in the Woreda [Ada'a Libern] followed a two-tier delivery approach, where input loans were provided to farmers through cooperatives. The main variable to qualify farmers for such loans was their working land size. Nevertheless, due to the shortage of land in the Woreda, the amount of loans, availed in the form of fertilizers, improved seeds, and chemicals, were inadequate. As collateral for the loans, the Commercial Bank of Ethiopia secures federal government guarantee, which is considered as cash substitute collateral from Ministry of Finance and Economic Development( MoFED) on the Oromia Regional Government’s subsidy budget. The main reason for many of the default cases was found to be the lack of farmers’ awareness on repayment terms. In a nut shell, the government’s role in the small-scale farmers’ access to bank loans appeared crucial both during loan origination and collection.

At the same time, this shows that there is strong bias in government toward foreign investors. Thus, on the political side the problem is better summed up by the Bertelsmann Transformation Index (BTI), which in its 2010 report on Ethiopia wrote:

Indian and Chinese companies encouraged by the Ethiopian government have increased their investment in the agricultural, construction and communication sectors, but have not been able to compensate for deficiencies on the Ethiopian side. The further transformation towards a market economy has been slow due to ideological reservations in the political class and the fear that private investment could be used to bolster the political opposition.

Why should we be alarmed by Ethiopia’s present agricultural policy?

There is no doubt that the government has practically abandoned the 13.4 million small holders long ago, not to speak of nomadic pastoralists. The government is more obsessed with production of cash crops and earning more foreign exchange. Their explanation is that with the cash people could buy their food. It seems our leaders live on a different planet, since otherwise they could not have adopted this disastrous policy at a time when even the rich countries, oil producer included, are trying to run away from food imports, despite their healthier balance of payments.

With such a failed policy and dependence on commercial farms that produce cash crops or foods for export, Ethiopia should not expect to dig its way out of hunger. Nor can it develop as an economy, or make headway in this fiercely competitive world, safeguard the pride and dignity of its citizens and maintain the nation’s independence and sovereignty so long as the policies pursued force it into dependence on international food aid. If one of the state of mind that these agricultural investors would abandon their pursuit of profit and become the new food donors, there is a need for sanity tests.As it stands now, this policy is a road to slavery for a proud nation that cherishes its sense of independence for which huge and historic sacrifices have been paid!

Secondly, as I discussed a few days ago in another article in the context of realization of the Millennium Development Goals (MDGs), today in Ethiopia there is 15-20 million people facing hunger everyday. At the same time, according to United Nations reports, 46 percent of Ethiopians live on less than a dollar a day; 51 percent of children are stunted.

What this says is that these people are not a part of the new Ethiopia, whose economic growth is compared to a miracle by the investing world. What they do not realize is that these fast growths are servicing the interests of narrower group(s).

As it happens, for that matter even by official admission, today 12.2 million Ethiopians in 290 food insecure woredas (districts of the country) are categorized as incapable of supporting themselves and are dependent on international food aid. Under normal circumstances, i.e., when there is no drought or famine this number goes down to 7 – 8 million. While this is the reality, government leaders boast that no one has died of hunger in Ethiopia, although secret interviews of farmers filtering out of the country are showing that hunger is closer than a neighbor to many, especially in the southern and south-western parts of the country. Bear in mind that in the past, hunger, drought and famine was mainly a northern Ethiopian phenomenon.

The Productive Safety Net Project (PSNP), financed by the international community, has saved lives in the last five years. Unfortunately, its problem is that it has no successful mechanism for the graduation of the dependent people to become productive and self-supporting citizens, a fact which some in the World Bank have also come to realize.

Misguided commercial agriculture, mostly known by its misnomer (in Ethiopia’s case) ‘farmland grab’

While the dependency on international food aid, discussed above, remains a worrying as to the future of Ethiopia’s agriculture, one of the evolving dangers lies in the country’s fertile lands being doled out mostly to foreign investors. This has been criticized roundly. But nothing could convince Prime Minister Meles Zenawi about the errors of his policies. These are, as Stefano Manservisi put it in 2009, pushing local farmers in a wrong direction; he rightly pointed out that intensifying commercial agriculture at the expense of smallholders would only lead to the exploitation of developing countries. The end result is, he stressed, “The poorest countries are selling commodities, they are exporting migrants and now they are selling their land from which they will not take any kind of benefit in terms of food or whatever.”

Standing side by side (from left) are father Surya Rao Karaturi, and son Sai Ramakrishna Karuturi, founder and managing director of Karuturi Global Limited; with Anil Tumu, director of Karuturi Agro Products Plc, and Chombe Seyoum, managing director of Gedeb Engineering Plc. Left: a John Deere tractor.

What commercial agriculture could do to a nation, where local farmers are displaced and their lands are taken away by force or threats, is better articulated a few years ago by Devinder Sharma, analyst with the Forum for Biotechnology and Food Security in India. Firstly, he predicted discontent of pushed away citizens leading to civil unrest, the undercurrents of which are already being witnessed in Ethiopia.

Secondly and more importantly Sharma looks at the environmental consequences and observes:

Outsourcing food production will ensure food security for investing countries but would leave behind a trail of hunger, starvation and food scarcities for local populations…The environmental tab of highly intensive farming – devastated soils, dry aquifer, and ruined ecology from chemical infestation – will be left for the host country to pick up.

Moreover, there is also the problems of mistreatment and exploitation of the rural population by the investor farmers. The locals are embittered by the exploitation of their labor with payments in some instances of 25 ETB for tractor drivers, which is USD $1.45 a day and less in other areas. Ordinary daily laborers without skills get paid far less than that. Speaking of the exploitation, One Girma Umad, an employee of Saudi Star and who works as machine operator, told Addis Fortune that, although he appreciated the chance to work without having any prior skill sets, he was not happy about the pay. He observed in that regard, “I have managed to develop the skills needed through observation and personal practise…However, the 25 Br I get a day is not even enough for my daily meals.”

How could this be considered an income that should start these people something meaningful for themselves? Most of all, the opportunities for technology transfer are non-existent in most instances, especially in situations where Indian and Chinese investors have brought machine operators from their countries, as happened in Gambella and other leased lands.

Many of the issues surrounding such commercial agriculture remain unresolved. The problem is being felt like fresh wound by literate consumers around the world, because of the dangerous implications of this to food production by smallholder agriculture.

This week the PRI, Public Radio International has become the latest addition to raise a series of unanswered questions about the persistence of the government in Ethiopian in pushing farmers out of their holdings and handing over the most fertile lands to investors. Those who have experienced this misfortune continue to speak out.

On its part, government is denying it has pushed away anyone. It claims the lands were unoccupied as discussed some months back. At that time, Meles said:

What we are doing is putting all unutilized land in this country and we have a lot of unutilized land in the lowlands…What we have done is to build infrastructures in those areas and therefore open up the area for investments both by domestic and foreign private sector on the basis of a clearly set out lease arrangement. That is a win-win arrangement. It is not a land grab. And, therefore, we are very comfortable with the fact that we have put in place all the necessary guidelines, environmental and otherwise, to make sure that everyone benefits from this exercise.

Transforming Ethiopia

US university scales back link to controversial Tanzania land deal

by Gerald Kitabu

AgriSol’s planned investment project in Katumba and Mishamo refugee settlements in Tanzania's Mapnda district has suffered the first major big blow following Iowa State University (ISU)’s decision to scale back its involvement with AgriSol to an “advisory capacity,” The Guardian on Sunday has learnt.

Dan Rather, the longtime CBS reporter and anchorman, who also reports for HDNET, a television network, and Jenny Beth Dyess, a Research Intern with the Nourishing the Planet Project, reports that Iowa State University (ISU) which intended on partnering with Bruce Rastetter, AgriSol owner, to conduct the small-farmer training programme has pulled out of the project and remained with an advisory role only.

Reports say Dr. Dennis Keeney, Professor Emeritus of Agronomy and Agriculture and Biosystems Engineering at ISU was appalled when he first became aware of Rastetter’s project at how dehumanizing the corporate world could be. He is concerned but doubts ISUs withdrawal will make much difference to Rastetter’s programme since he doesn’t believe Rastetter took “training” seriously anyway.

Anuradha Mittal, executive director of the Oakland Institute and a contributing author to State of the World 2011: Innovations that Nourish the Planet, is also skeptical of Rastetter’s project. After conducting a study into Rastetter’s plan she labels it a “land grab,” an exploitive land transaction by a foreign government or private investor for the purpose of agricultural production and export.

Mittal also is concerned about demands in AgriSol Energy’s proposal to Tanzania requiring permission to cultivate GMOs and guaranteed access to export markets.

A 2010 analysis by the World Bank shows large-scale agribusiness investments rarely have any beneficial effects on the local community. AgriSol’s project will likely displace thousands of people from their homes and farms and while some will be employed as labourers, most of the managerial positions will probably be given to foreigners.

ISU thought that they would work with AgriSol to make sure that the massive for-profit venture was also a socially responsible one. According to an AgriSol news release, ISU’s involvement ensured that the project would “effectively and efficiently serve the interests of the local communities and the country.”

While critics call the deal a “land grab” that would be catastrophic for thousands of small farmers just the kind of people that AgriSol claimed its project would benefit, the honourable US ambassador in Tanzania Alfonso Lenhardt has a different view when he said: “Agrisol have not grabbed any land but were actually invited by the Prime Minister when he visited Iowa state two years ago and saw how American technology can produce sufficient food and energy from farms. The Ambassador had been quoted as saying, in reference to the Bruce Rastetter and AgriSol Energy.

But researchers into the whole project say the Ambassador could be deceived just like local people who were told of the benefits the deal could bring without any written documents as if it were a gentleman memorandum of understanding over this source of livelihoods of the poor.

The Executive Director of The Oakland Institute, a policy think tank, said in response to the ambassador’s defense of AgriSol Company,  'Honorable Ambassador, our latest brief dismantles AgriSol's lies around project benefits to the people of Tanzania.'

She adds: “It is shocking to us that an appointee of the Obama administration would side with a project that will displace and destroy livelihoods of over 160,000 Africans to accommodate investors, including US and Tanzanian politicians and businessmen, with questionable records of integrity.”

In an interview with ISU’s newspaper on the fate of the refugees, a top administrator at ISU, Associate Dean David Acker, responded that the act was emphatic saying that is an awful thing to even consider.

He said: “If you did find a set of business people who were willing to have anything to do with kicking refugees off the land, who would want to have anything to do with them? Not me personally, not Iowa State.”

Unfortunately, the facts tell a different story. Acker himself was in charge of ISU’s work with AgriSol and, as he is doubtless aware, ISU faculty visited the refugee settlements to do preliminary research for the AgriSol project in March and November 2010.

What’s more, ISU is mentioned in the memorandum of understanding between AgriSol and the Tanzanian government. The agreement specifies that AgriSol would be “working closely with Iowa State University” and also makes clear that the project would move forward only after the “resettlement and removal of all former refugees.”

However, the investigation raised questions about the reasons behind ISU’s involvement with AgriSol.

AgriSol founder Bruce Rastetter is a major donor to ISU and his multi-million-dollar endowment pays the salary of an ISU faculty member who worked on the project. Rastetter also sits on the Iowa Board of Regents, which oversees ISU. Critics charged that Rastetter was using the university’s name and reputation to further his own business interests.

The company, mid this year, came under attack from land rights activists and politicians, especially Members of Parliament for acquiring over 300,000 hectres located at Mishamo and Katumba areas in Mpanda district for agricultural development.

The attacks prompted Prime Minister Mizengo Pinda to throw his weight to defend the investor, saying the deal would benefit the local economy and had the potential to uplift peasants in the area from the vicious cycle of poverty. He said the investor through Agrisol Energy Tanzania Limited, had acquired the land in question after open, long negotiations with regional and district leaders.

The signed MoU with the Mpanda district Council, provoked protests from people of all walks of life due to controversial terms included in it.

These include the initial term of the certificate of occupancy which is 99 years lease, plus the proviso that the government creates a regulatory framework for growing Genetically Modified (GM) crops, which is not yet to be approved. The deal, for the district, is a Sh200-per-hectare-per annum land rent, and Sh500 as fee to the council per hectare per year.

Also in the list are other controversial terms such as that for any disputes that may arise, arbitration shall be held in London, England, pursuant to the rules of the International Chamber of Commerce (ICC), which is reminiscent of the controversial Dowans’ contract.

When contacted for comments on the ISU’s decision to scale back its involvement with AgriSol to an “advisory capacity, Betram Eyakuze , the director of AgriSol Tanzania Ltd, the Tanzanian arm of AgriSol Energy that would provide the domestic front for this operation, could not pick up his phone.

IPP Media

Africa succumbs to colonial-style land grab

Jonathan Rugman

It is being dubbed the second scramble for Africa: millions of acres of land are being snapped up by companies from Asia and the Middle East, our foreign Affairs Correspondent Jonathan Rugman reports.

Nations like Ethiopia are desperate for the investment. But critics claim it's at the expense of smallholder farmers - many of whom say they're being thrown off their land to make way for the large multi-nationals.

Think of drought-stricken Ethiopia and you might not expect to see modern machinery owned by a foreign multinational, cultivating vast farms in one of the poorest countries in the world.

The goal here is simple: to double Ethiopia's agricultural production and to make it self-sufficient. So that handouts from Britain, America and others are no longer required.

Vinay Shekar is on the front line of this agrarian revolution. He's a farm manager from India running an estate in Ethiopia. His company is called Karuturi and these 29,000 acres are a small slice of its empire - with the Ethiopians pledging almost 800,000 acres to the Indian firm so far.

Ethiopia's land is owned by its post-Communist government - and that land can't feed its people. Farming methods are medieval, with the land parcelled up among millions of small scale tenant farmers. So now the country's Agriculture Minister, Ato Wondirad Mande, is giving foreign companies like Karuturi cheap leases to revolutionise food production.

When they first came they told us an investor was coming and we would develop the land alongside one another. They didn't say the land would be taken away from us entirely. He told Channel 4 News: "We give land because we cannot produce on that land. Because of lack of capital and technology, that’s why. They open a big opportunity for employment and of course generation of taxes and other financial gain."

But farmer Gemechu Garbaba talks of loss, not gain. He’s pointing to Karuturi farmland, which he says the government took from him to give to the Indians instead.

"When they first came they told us an investor was coming and we would develop the land alongside one another,"Mr Garbaba told Channel 4 News. "They didn't say the land would be taken away from us entirely. I don't understand why the government took the land."

Mr Garbaba now grows maize on land nearby which he sublets each year from a neighbour. It is precarious, he says. He could lose his tenancy at any moment.

And at the family home his wife complains that the cattle have almost nowhere to graze because their old fields have gone.

"Since the land was taken away from us we are impoverished. Nothing has gone right for us, since these investors came," he added.

Next door Karuturi is beginning to work agricultural wonders. It runs the farm under a 50 year lease, and says it will sell most of its produce inside Ethiopia itself.

Who profits?

With their Indian manager watching them, these women say they are grateful to have a job earning just under fifty pence each per day.

Karuturi can see such good profits that it's investing nearly a billion dollars in Ethiopia. Though in an interview in 2010 the company's founder said it was shameful to accuse the firm of "land grabs" when the country's being transformed.

Sai Ramakrishna Karuturi, Managing Director at Karuturi Global, said: "Why do they need to import food? It’s a shame, I sometimes feel like it's a conspiracy - that people want Africa to remain with a begging bowl.

"Here we are creating employment, food, wealth – isn't that what Adam Smith spoke about - isn't that the reason the West is self sufficient? I don't think creating wealth is a crime."


Here we are creating employment, food, wealth – isn't that what Adam Smith spoke about - isn't that the reason the West is self sufficient? I don't think creating wealth is a crime. Karuturi MD, Sai Ramakrishna


Yet in this village hut everyone complains they have less food than before because Karuturi now farms where they once did.

Taresa Agasa helped put together a petition to change the government’s mind. But when that didn't work, he took a job as a security guard for Karuturi for 45 pence a day.

He said: "We wish we could eat three times a day. I know my children want this. But I cannot provide that. We live and survive only if we have land. And we would rather have our land back."

Ethiopia's agriculture minister claims there is no conflict with local communities and no need to provide compensation.

Yet people here speak bitterly of forced evictions, and this is just a snapshot of a story now playing out all over Africa - as multinationals strike land deals with governments desperate for investment.

The risk is colonial style plantations – with local people swept aside. In a world badly in need of more food, costing less.

Channel 4 News

South Sudan seeks food and farmland investments

South Sudan hopes to attract investors from Gulf Arab states, Israel, China and fellow African countries to boost production of basic food items, a government official said.

Created in July after a 2005 peace agreement with Khartoum, Africa's newest nation faces food shortages and grave economic challenges such as annual inflation at almost 80 percent in November.

Around 2.7 million South Sudanese will need food aid from next year as widespread violence and crop failures have hit hard farm production, according to the United Nations' food programme.

South Sudan has held talks with investors from Gulf Arab states, Israel, China, Uganda and the Netherlands to invite them to invest into agricultural production, said Elizabeth Manoa Majok, under-secretary in the ministry of commerce, industry and investment."The government has made food production the top priority...80 percent of South Sudan depend on agriculture," Majok said in an interview in the capital Juba.

"No serious commitment has been made so far....(but) interest of investors is big," she said.

South Sudan wants with the help of investors to increase production of basic food items such as sugar, rice, cereals and oilseeds, livestock as well as cotton, she said.

"We import everything, even tomatoes. We should produce this ourselves," Majok said. "We have the farmland, the resources."The government was preparing tenders to invite investors to revamp food factories damaged during the civil war and was also open to other partnerships such as farmland investments, she said without giving details.

Desert Gulf Arab countries have been trying to buy or lease farmland in Africa and Asia to secure food supplies but local famers have opposed such investments in some countries.Civil war waged for all but a few years since 1955 has left South Sudan with an almost complete lack of infrastructure and industry, aside from oil.

The country has few paved roads outside Juba and large parts become inaccessible by ground transport during the rainy season. Often described as one of the world's least-developed nations, it has high levels of poverty, illiteracy and maternal mortality rates. Hospitals and schools are scarce.South Sudan is also under pressure to diversify its economy away from oil generating 98 percent of state revenues.

Oil reserves will halve by 2020 if no new finds are made, according to the International Monetary Funds (IMF).

To facilitate trade with East African countries such as Uganda and Kenya the government is considering setting up free trade zones in border areas, Majok said."Consultants are doing a study on free zones. We haven't announced it yet," she said.

Landlocked South Sudan depends for most of its needs on imports which are driving up inflation.

Roads to Uganda and Kenya are poor and tensions with Khartoum have disrupted supplies from the north.

BRecorder

South Sudan: land ownership a major challenge for investors

by Shadia Basheri

The Sudanese Businessmen & Employers Union (SBEU) is one of the organizations on which the Sudanese government greatly depends in its endeavor to promote the Sudanese national economy and boost development.

The SBEU's mission has become more and more important, particularly in light of the economic changes that are taking place in the country following the secession of South Sudan. These changes have greatly affected the economic structure of the country.

Accordingly, SBEU has earnestly embarked upon the mission by presenting proposals to the government for solving the economic difficulties the country is facing following recent announcement by the government that SBEU will take up the role of managing investment in the country.

In order to shed light on the activities of SBEU, particularly those to be undertaken by it in the coming phase, Sudan Vision interviewed SBUE secretary-general, Bakri Yousif Omer as follows:

Q: We have noticed that foreign investment is focusing on the service sector. Why is that?

A: As a matter of fact after petroleum, investment on the service sector is among those the government is targeting. For example, agricultural investments are bigger and have many benefits.

As you know agricultural investment in Sudan is very little and is not sufficient for achieving food security. This is why SBEU has always been calling for more of it since Sudan has vast fertile agricultural lands.

Q: What are the most important issues of agricultural investments that the government has to deal with?

A: The problem of ownership of land is one of the biggest issues that face agricultural investment in the county. However, the Higher Council for Investment (HCI) has started to look into this matter to find a solution to it. We must have a vision regarding agricultural investments. Foreign and local investors should mark their contribution in the region and show can they address the positive social impact of investments.

Q: Has SBEU ever participated in international or regional conferences?

A: SBEU has contributed to many conferences and meetings. As you may know, the Islamic Chamber of Commerce (ICC) has created a body called Business Employers which is located in Pakistan. In addition, we have participated at a conference in the State of Qatar on December 2 in which young people participated. Moreover, Islamic chambers of commerce have many important projects.

For example, there is a proposal for a railway project that links some African countries to Port Sudan that passes through Darfur. This proposal has been submitted by Sheikh Kamil.

Also Turkey has Africa bridge project and the African-Turkish Relations Forum. Internally, we have launched a Diplomacy Day for ambassadors accredited to Khartoum.

Moreover, SBEU has participated in many conferences, meetings and seminars through the Council of Arab Chambers of Industry, Commerce, and Agriculture and SBEU is represented in its board of directors. We are also active in this.

In addition, we are members of the Arab Businessmen federation as well as the Arab European Chamber s board. At the African level, we are members of the COMESA and IGAD.

Q: Has the COMESA made things easier for Sudanese businessmen with respect to exports and imports and what problems do you face?

A: As a matter of fact we are no more isolated. It is important for any country to join regional blocs.

At this stage of history and in light of the new millennium, Arab countries have realized the importance of joining African blocs, such as the Arab Free Trade Region and COMESA.

Yes, in any economic activity there are negative and positive sides. On the negative side, you have the removal of custom duties that are negatively reflected on local industry.

For example, Sudan has got plenty of natural resources for manufacturing but despite that we import. An example of this is that tea and coffee are amongst these imports and so COMESA affects commodities.

As regards problems that we face is that we suffer from the similarity of our productions which affect the COMESA market. In addition, poor roads greatly affect the economy and hence the government should reduce transportation fees since all industries in the COMESA region are still young.

Q: SBEU has recently held many meetings, such as those with Council of Arab Chambers of Industry, Commerce and Agriculture as well as Islamic Chambers of Commerce and Industry Boards. What is the purpose of these meetings?

A: All these meetings have been sponsored by the President of the Republic and in these meetings; many papers were presented relating to investment opportunities and transparency.

We still receive thanks and appreciations from Arab and foreign chambers of commerce and this will contribute to the boosting of investment in Sudan.

In addition, papers on agricultural investment opportunities in Sudan for achieving Arab Security have been presented.

Q: What are the most important problems that face the Union?

A: There are many economic problems, such as financing policies. For example we are aware of government initiatives and we are waiting for these initiatives to be implemented on the ground. You know we work hand in hand with the government.

Q: Are there any joint investment cooperation with the State of South Sudan following secession?

A: We have agreed with the State of South Sudan before secession that we form a strategic partnership which we called smart partnership.

We have presented our vision so that the relation would be fabulous whether South Sudan seceded or not.

We have taken on board banks and presented initiatives but the general atmosphere needed an economic force and we must build good relationship in order to remove all obstacles, particularly in the light of the need of South Sudan for commodities.

Q: We want to know what have your union contributed to the civil society?

A: We have many contributions as I mentioned in Darfur and in the capital, for example our contribution to Ibrahim Malik and Ahmed Kasim Hospital. In addition, we have contributed to political parties and provided great support to various bodies.

Q: What type of relation do you have with Investment Commission?

A: The commission has been established at the state level and it came about in implementation of the federal system according to Naivasha peace agreement.

Q: What is your role in securing the lives of businessmen?

A: Since our meeting with Dr. Garang in 2005, he called on businessmen to work in an institutionalized way for ensuring investment in the South. At that time, finance was being provided by the government South Sudan. We agreed and held two forums but our activities were suspended.

Had such policy been implemented it would have had great impact. We must represent such initiative to the government of Sudan.

Q: What else do you want to say?

A: I would like to thank Sudan Vision for its covering of our activities and for being engaged in all issues that take place in the Union.

Sudan Vision