Ethiopia: Karaturi claims to have lost its first harvest

Karuturi Global reported ‘a flood destroyed its first planned harvest’. The Indian company is growing sugar cane, palm oil, cereals and vegetables in 100,000 hectares land it leased from the government.

The damage was caused by flooding from the Baro and Alwero rivers in western Ethiopia, where Karuturi’s farm is located.

The Company clamed that a potential harvest of 60,000 metric tons of corn was lost after 12,000 hectares (29,653 acres) of land was flooded. The Company’s statement estimated to have lost $15 millions.

Bloomberg quoted a Karuturi official as saying that:

‘The waters started rising Sept. 28 and have not stopped Oct. 2…..Most of our maize is lost. We have taken a bit of a hit there.’

‘The flooding that breached specially built barriers near Karuturi’s plantations couldn’t have been predicted……This kind of flooding we haven’t seen before.’

‘This is a crazy amount of water.’

Karuturi indicated, however, its plan to replant the crops. ‘A second crop of as much as 15,000 hectares of corn will be planted when the waters recede and will be harvested around March’.

The news also indicated, citing Karuturi officials, that ‘a 200-hectare sugar cane nursery started by the company is expected to expand to 10,000 hectares before being sold in 2013, while 500,000 plants of palm oil will be ready after two years’. The project is ‘ahead of expectations’ and will be completed by December 2013, and the government is ‘extremely satisfied’ with progress, Karuturi officials claimed.

The Company also indicated that produce from Karuturi’s operations will be exported to South Sudan and other East African markets, rather than farther afield, to minimize transport costs. Crops will be paid for in dollars, which will bring foreign currency to the National Bank of Ethiopia.

Karutruri claims that ‘two tug boats with the capacity to carry 600 tons each and which will transport crops along the Baro River that flows into South Sudan are expected to be operational within 18 months’.

An Ethiopian official claimed last April the existence of an export cap on Karuturi’s produces. Ethiopia’s Ambassador to UK said, in his article posted in Poverty Matters blog of The Guardian:

‘The Indian company Karuturi Global informed us of the sort of food crops they wished to grow and we allocated land accordingly. The company will be selling some of their production in Ethiopia, helping to close the food shortage gap, and exporting the rest. Investors must ensure not only that the land they are allocated is efficiently managed, but that they will construct housing, roads, schools, clinics and other infrastructure such as a water supply, to fully support their workers.’

However, the recently declassified land lease agreement document has nothing to say on the matter.

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Check this blog’s Land grab archive for more on this issue.

Daniel Berhane

Daniel Berhane

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