The smell of success is usually sweet. But for the Rs 560 crore turnover Karuturi Global, this axiom cannot be farther than the truth. Karuturi’s ambitious foray into Ethiopia, one of Africa’s most impoverished countries, has come under microscopic scrutiny by US-based NGO Oakland Institute, which alleged in a recent report that the company’s land deals in the country are far from transparent.
In a 60-page report, Oakland Institute alleged that even after four years since it began its Ethiopia foray, it is not clear how much land the Bangalore-based company has taken on lease. The report, however, maintained that Karuturi Global was the largest foreign land holder in Ethopia.
While the company’s CMD Sai Ramakrishna Karuturi said it was 300,000 hectares, Oakland Institute said ground reports from Ethiopia showed it as only 100,000 hectares. “Whatever the reality is…, it is clear that Karuturi’s claim of 300,000 hectares are not as cut and dry as they would like the world to believe,” said the NGO’s report.
When contacted by Bangalore Mirror, Ramakrishna said though his company has exercised his right only to the extent of 100,000 hectares so far, his agreement with the Ethiopian government allows him to use the balance 200,000 hectares when he wishes to do so.
The price of the lease has also come under attack. Oakland Institute said Karuturi has managed to get the land for a lease of $1-1.25 per hectare.
The other major charge against Karuturi is that the land agreement does not have the blessing of the central government and it is only between Karuturi and the local provincial government in Gambella.
Karuturi dismissed this charge too, and said that anybody can visit the federal government agriculture department website and view the agreement. Bangalore Mirror was unable to verify this claim.
Oakland Institute’s executive director Anuradha Mittal challenged this claim and said, “Ask Karuturi to show the agreement that he can take up to 300,000 hectares.”
The report also said that Karuturi’s agriculture venture in Ethiopia has not helped the local communities’ struggle towards food security.
“The local population there consumes a grain called teff and unlike in the neighbouring countries like Kenya and Somalia, they do not consume rice or wheat. I am a businessman. I sell what I produce to whomever I want for a price I can. What is wrong with that? You should ask Anuradha Mittal if she has ever visited Ethiopia,” Karuturi countered.
In her reaction to this, Mittal said, “He can export what he grows, but he is using for his profits the land belonging to the local communities which they used for farming, grazing their cattles and depended upon for their livelihoods. These local communities get nothing.”
Karuturi claimed that his company’s investment in Ethiopia has helped served more than his own business interest.
“I have 11,000 people working in Ethiopia and we run a school that educates over 2,000 children. Nearly 67 per cent of these children get into colleges. The percentage is higher than what is in US, leave alone India. We also run an 80-bed hospital that treats 500 people each day. We supply HIV-AIDS drugs when the government is unable to deliver. In the past five years, we have not lost a single patient to AIDS for want of medicine.”