Is Indian investment in Ethiopian farms a ‘land grab?’ (VIDEO)

by yeEthiopiaforums

Investment by Indian-owned Karuturi Global has raised questions about whether Ethiopia is literally giving away the farm, or conversely, launching a ‘green revolution’ to help Ethiopia feed itself.

By William Davison,

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.

Karuturi Global land grab Ethiopia

Karuturi Global


The worldwide trend is not in doubt. Globally, about 45 million hectares (111 million acres) of farmland were leased in 2009, compared with a previous average rate of 4 million hectares a year, the World Bank says. More than 70 percent of the deals were in Africa, most of them in Sudan, Mozambique, Liberia, Ethiopia, Nigeria and Madagascar.

The reasons are equally clear. It is estimated that global food production will have to increase 70 percent by 2050 to feed 9 billion mouths. One way to contribute to this is to cultivate under-utilized land – something which Africa has a relatively large stock of.

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Ethiopia is a prime example of land availability, according to the government. The country has 74.3 million hectares of arable land, of which 12 million is cultivated. Another 3.5 million hectares has been earmarked for leasing and 350,000 hectares of large plots have been rented in the last two years, it says. The Oakland Institute, a research group, says the area leased is ten times the official figure.

Antiquated methods

Despite it being the backbone of the economy and employing around 80 percent of the country’s 85 million people, Ethiopian agriculture is antiquated, with oxen dragging wooden plows a common sight. Even the staunchest opponent of agri-business is likely to admit that the smallholder- and subsistence-dominated sector is ripe for modernization – although almost all of them would object to Ethiopia’s approach.


Organizations like Oakland and the International Institute for Environment and Development (IIED) have methodically highlighted the inadequacies and injustices of the process. But such constructive concern has been latched onto by government opponents, who have added acquiescence with “land grabs” to kleptocracy and genocide in their litany of the state’s evils. Officials – in unison as always – dismiss all criticism, insisting the policy is well-managed and beneficial to all.

Located on the border with Sudan, lowland Gambella is a focal point for the leases – and for the debate. The government’s plan is for 1.2 million hectares – almost half of the region – to become commercial farms. Since 2008, six Indian, one Chinese, and Saudi Arabian companies have leased a total of 225,012 hectares in the state, ruling party-owned media says, with another 190,000 hectares going to Ethiopians. The official line is Gambella’s lack of development, sparsely-populated land, and plentiful water makes it a suitable location. Critics believe only the bottom line of foreign firms benefit, while agro-pastoralists groups such as the Anuak and Nuer are deprived of resources they have used for eons.

Sensationalized debate

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.

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