Addis Fortune (Addis Ababa)
Daniel Kifle
11 December 2011
analysis
Interest by both local and international companies to lease land has been met with criticism by some outside the region, yet locals are unperturbed, reports Daniel Kifle, Special to Fortune.
In a sparsely populated area of 3.4 million hectares of Gambella Regional State, foreigners have become a increasingly common sight over the past five years. A growing number of companies have shown interest in venturing into the agriculture sector there and the government has been letting them.
The number of companies who have been granted investment licences in the region has jumped into the hundreds since 2005/06. Yet only 34 licences had been granted in the five years before that. This interest by both local and international companies to lease land in the region has been met with criticism from pundits as nothing more than land grabbing.
There has been no environmental impact assessment done to date and people are being driven off their lands forcefully, allege these pundits, one of which is the Oakland Institute, a think-tank based out of California in the United States.
However, theirs is not an accusation the Ethiopian government seems to have given much attention to. It has been staunchly refuting the allegations and has been accusing these proponents of disseminating such claims to promote hidden agendas. The investment allows for job creation, technology transfer and helps in food insecurity on lands that have lain bare without any agricultural activities on them, it argues.
The government believes that the lands which are not used by small farmers should be used for huge commercial farms and thus require huge capital investment. Indeed some of the companies involved in the region’s plan for big projects require heavy machinery and investment in infrastructure.
One of the companies that have acquired land, perhaps the biggest in Africa, is India-based Karuturi Agro Products Plc, which received a 100,000ha plot. It plans to plant sugar cane, rice, cotton and maize.
A project by a subsidiary of Karuturi Global Ltd, through the Agro Products Plc, is the first venture for the company. Karuturi is known as the biggest rose producer in the world.
Having finished a one-year-long harvest of seedlings on 63ha for its sugar cane plantation, it is now planting 10,000ha with it. Also in the works is the erection of a sugar factory.
Karuturi believes that accusations of residents in the area not based on facts.
“The area used to be covered by forest which we had to clear,” Karmjeet Singh Sekhon, project director, told Fortune. “Our projects benefit not only the company but also the local people in terms of employment and transfer.”
Ruchi Agro Plc, an Indian company, which received 25,000ha Gambella Regional State in March 2009, employs workers from the locality making up 70pc of its workforce. The remaining are Indian technicians that operate the machineries and whom the project manager believe help transfer technology.
On top of the sugar cane plantations and the factory construction projects, the company is also undertaking construction of residential buildings for the company’s employees. Currently, there are 362 permanent and another 650 to 1,600 contractual employees in the company.
However, not all employees are not happy with their pay.
Abera Lera, 28, is one of the employees of the company. Although he has been working for the past seven months for a salary of 1,800 Br, he says it is not commensurate with work in the area.
“We do not have hardship allowances and we have to cover our own food expenses,” Abera, who has worked at Wongi Sugar Factor for 10 years. “Although we have been told the situation will get better, I am thinking about leaving the job,” he told Fortune.
Sharing his concern is Deneke Tora, who also works at Wongi with Abera.
Similar discontent is echoed by employees of Saudi Star, another mega investment project in the region. Incorporated in 2009 with a capital of 500 million Br, Saudi Star aims to grow rice on a 10,000ht plot it acquired using water from the Alwero Dam, which was constructed during the Dergue Regime to supply water to grow cotton.
It plans to access this dam, which has been idle for two decades, using a canal, to irrigate the farm. To facilitate this, the company has signed a contract worth 85 million dollars with GRC, a Pakistani company, for the construction of more than 30km of canal two weeks ago. The Pakistani company has agreed to complete the project within 11 months.
The company, established by Mohammed Al-Amoudi, has already put 80 million dollars into buying agricultural machinery and equipment from Caterpillar, which will be delivered by Ries Engineering SC.
Girma Umad, 28, is one of the employees currently working as a machine operator at Saudi Star. Before he came to work at the project, he used to live in the nearby town of Abobo with his parents.
Although he appreciates the chance to work without having any prior skill sets, he is not happy about the pay as well.
“I have managed to develop the skills needed through observation and personal practise, he told Fortune in appreciation for the overall working conditions. “However, the 25 Br I get a day is not even enough for my daily meals.”
A few weeks back some of the field workers had gone on strike demanding an increase in pay. This was triggered by an increase in wages for those involved in construction work.
However, the issue was resolved after discussions with the workers who received an increment of three Birr a day. The misunderstanding occurred as the increments were not given to all at the same time, according to Seifu wolde, the construction manager at the site.
Despite their complaints, many of the workers are still happy about the work opportunity they are getting.
“It is exactly this kind of technology transfer using machinery that we want to have shifted to our people,” Goaner Yer Zuor, vice president of the regional state, told Fortune.
It seems that the notion of employing local labour is taking root at Ruchi Agro Plc, another Indian company, which received 25,000ha in March 2009. The labour composition at the site is 70pc local, with the remaining technicians coming from India, according to Manohar Lankella (Phd), project manager of the company.
“We employ Indians because we use modern technology,” he told Fortune. “But they are also here to teach locals about how to use them.”
Currently Ruchi employs more than 160 employees.
Manhohar has had the same response to the “land grab” accusations, which he too says are not true.
“The land was empty and we had to clear the land before we could start our work,” he told Fortune, responding to accusations that people were forced to relocate to give way for his company.
Obanga Amir Okoch, 25, a native to the area and an employee of Ruchi agree. Obanga grew up in a local area called “fugnido. The land had lain bare for many years, and people were forced to relocate there during the military regime, according to Obanga.
“However, people left right after the regime was overthrown because they were put there against their will,” he explained to Fortune.
On the other hand, locals like Edosa Telila, 25, who has a diploma in law, seem to have no problem with the presence of foreigners on their land. In his view the locals are benefiting from ground water works and donations of maize at harvest time.
However, it is not just foreigners who have received land in the region, but local companies as well. One such company is Bazen Agricultural & Industrial Development which leased 10,000ha in 2005. It is currently preparing to undertake the clearing of 3,000ha to use as part of 7,200ha for its plantation.
Cotton, peas, maize and mango constitute the main cash and food crops currently cultivated on 2,300, 160, 80, and 53ha of land, respectively. A preliminary 10ha of vineyards also makes up part of the total cultivated land by the company so far. The company has plans to increase the actual cultivated land to 5,230 hectares by 2013.
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