Ethiopia: Official discloses New data on Leased Farmlands

May 13, 2012

An official from the Ethiopian Ministry of Agriculture disclosed new figures on the size and utilization of the agricultural land leased as well as the harvest and jobs from.

It is to be recalled that the Ministry disclosed last year 24 contract documents concluded with Ethiopians and Foreigners for the leasing of 350,099 Hectare (865,095 acres) land for commercial crops. Of which 285,012 is leased to 10 Foreign firms, while the rest is to 14 Ethiopian firms, including diaspora. (Read the summary and download the documents here.)

The new data provided by an official of the Ministry to a state-owned newspaper this month, however, show dramatic difference. According to the Ministry’s Public Relation and Communication Directorate Director, Tarekegn Tsige:

* 5284 investors have received about 2.2 million hectares (5,436,200 acres) of land in different parts of the country.

* Of which, 126 foreign investors have received 567, 651 hectares (1,402,666 acres), while the rest, about 1.7 million hectares, was allotted to Ethiopians.

* However, so far, only 372, 088 hectares( 919,429 acres), or 17.6 percent of the 2.2 million hectare land allotted, have been utilized to produce different farm products.

Interestingly, the size of utilized land (372, 088 hectares) is close to the figure (350,099 Hectare) that was so far provided as the total leased land.

It is also curious that the number of foreign investors ‘who have received land’ surged to 126, just a year after the Ministry released contractual documents with 10 foreign firms declaring that ‘these are the contracts inked so far’.

The official also said that:

* the investment has attracted 15 billion birr capital and created jobs for more than 2 million citizens.

* These farms have the capacity to produce and supply about 4. 7 million quintals of products to domestic and foreign market.

* The large scale farms are producing cotton, sisal, coffee, soyabean, fruits and inputs for biofuelproduction.

* More than 2 million quintals of sisal from about 253 thousand hectares, more than 824 quintals of cotton from about 40 thousand hectares, 52 thousand quintals of soyabean from 3 thousand hectares and more than 906 quintals of coffee from about 75 thousand hectares of land has so far been harvested.

* Many of the large scale farmlands leased to these investors are in Benshangul-Gumuz, Oromia, Gambella, Southern Nations, Nationalities and People (SNNP), Amhara and Tigray states.

With regard to land leased for the Horticulture sub-industry (the data above is only of land leased for commercial crops), the official said:

* a total of 81 foreign investors from the Netherlands, Germany, Israel, India, England, America, Saudi Arabia, Italy and domestic investors have currently leased 5954 hectares (14,712 acres) of land in different parts of the country to engage in the horticulture industry.

* they have, so far, utilized only 1,315 hectares(22 per cent) of land they have taken for the intended purpose.

He cited, as instances of land leased yet kept unproductive, a Netherlands flower company, Sher-Ethiopia, which leased 600 hectares of land but utilized only 227 hectares and another unnamed company which took about 1000 hectares and yet utilized not more than a tenth of it.

The official also remarked that:

‘The flower farms are located in the outskirts of major cities close to the capital and are creating job opportunities to thousands of citizens. However the impact of these farms on the employees health and the mechanism by which employees are compensated for health damages caused and the farms environmental impact still remains controversial and requires measures to be taken’.

Generally speaking, he claimed that ‘the investors have the right to supply 70 per cent and 30 per cent of their products to foreign and to domestic markets respectively’. This is probably based on a gentleman’s agreement, as there is no such obligation set in the contracts disclosed so far. Though, the government may  issue a law imposing the export cap at any time.

3.6 million hectares land have been identified and registered in the Land Bank to be allotted for investors in ‘the coming few years’, according to the official. Moreover, ‘the government had planned to provide more than 1.2 million hectares of land during the first year(2010/11 of the GTP[the Growth and Transformation Plan] period. However, performance was far below the goal’, he said.

It should be noted that the country has about 74 mil. hectare (183 mil. acres) arable land of which about 14 million hectare is under cultivation, to date.

The official disclosed that ‘the Ministry has for the time being closed its window of license to clearly set the overall performance of investment on the land leased so far and pave a better scenario in the near future. It plans to commence soon and perform better in attracting more investors and enable them perform better’.

He downplayed criticisms that the land leasing has ‘brought negative impacts on the communities who live close to the farms’, claiming that ‘due emphasis has been given to make these investments free of adverse effect on the society who dwell close to them and this would continue in strengthened manner’.


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