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November 29, 2009

Wealthy nations out-source crops to Ethiopia’s farmland

by Stephanie McCrummen

In recent months, the Ethiopian government began marketing abroad one of the hottest commodities in an increasingly crowded and hungry world: farmland.

“Why Attractive?’’ reads one glossy poster with photos of green fields and a map outlining swaths of the country available at bargain-basement prices. “Vast, fertile, irrigable land at low rent. Abundant water resources. Cheap labor. Warmest hospitality.’’

This impoverished and chronically food-insecure Horn of Africa nation is rapidly becoming one of the world’s leading destinations for the booming business of land leasing, by which relatively rich countries and investment firms are securing 40- to 99-year contracts to farm vast tracts of land.

Governments across Southeast Asia, Latin America, and especially Africa are seizing the chance to attract this new breed of investors, wining and dining executives, creating land-leasing agencies and land catalogs to showcase their offerings of earth. In Africa alone, experts estimate that about 50 million acres - roughly the size of Nebraska - have been leased in the past two years.

The trend is driven in part by last year’s global food crisis. Relatively wealthy countries are shoring up their food supplies by growing staple crops abroad. The desert kingdom of Saudi Arabia, for instance, is shifting wheat production to Africa. The government of India, where land is crowded and overfarmed, is offering incentives to companies to carve out mega farms across the continent.

Increasingly, though, purely profit-seeking companies are snatching up land, making a simple, if somewhat grim, calculation. As one Saudi-backed businessman here put it, “The population of the world is increasing dramatically, so land and food supplies will be short, demand will be higher, and prices will rise.’’

The scale and pace of the land scramble has alarmed policymakers and others concerned about the implications for food security in countries such as Ethiopia, where officials recently appealed for food aid for about 6 million people as drought devastates parts of East Africa. The UN Food and Agriculture Organization is in the midst of a food security summit in Rome where some of the 62 heads of state attending are to discuss a code of conduct to govern land deals, which are being struck with little public input.

“These contracts are pretty thin,’’ said David Hallam, a deputy director at the UN organization. “You see statements from ministers where they’re basically promising everything with no controls, no conditions.’’

The harshest critics of the practice conjure bleak images of poor Africans starving as food is hauled off to rich countries. Some express concern that decades of industrial farming will leave good land spoiled even as local populations surge. And skeptics also say the political contexts cannot be ignored.

“We don’t trust this government,’’ said Merera Gudina, a leading opposition figure here who accuses Prime Minister Meles Zenawi of Ethiopia of using the land policy to hold on to power. “We are afraid this government is buying diplomatic support by giving away land.’’

But many experts are cautiously hopeful, saying that big agribusiness could feed millions by industrializing agriculture in countries such as Ethiopia, where about 80 percent of its 75 million people are farmers who plow their fields with oxen.

“If these deals are negotiated well, I tell you, it will change the dynamics of the food economy in this country,’’ said Mafa Chipeta, the UN group’s representative in Ethiopia, dismissing the worst-case scenarios. “I can’t believe Ethiopia or any other government would allow their country to be used like an empty womb. The human spirit would not allow it.’’

Few countries have embraced the trend as zealously as Ethiopia, where hard-baked eastern deserts fade into spectacularly lush and green western valleys fed by the Blue Nile. Only a quarter of the country’s estimated 175 million fertile acres is being farmed.

Desperate for foreign currency, the government of former Marxist rebels who once proclaimed “land to the tiller!’’ has set aside more than 6 million acres for agribusiness. Lured with 40-year leases and tax holidays, investors are going on farm shopping sprees, crisscrossing the country on chartered flights to pick out their swaths of Ethiopian soil.

Indian companies have committed $4.2 billion. Anand Seth, director general of the Federation of Indian Export Organizations, described Africa as “the next big thing’’ in investment opportunities and markets.

As he stood on a little hill overlooking 30,000 acres of rich, black soil, Hanumantha Rao, chief general manager of the Indian company Karuturi Agro Products, agreed. He said the Ethiopian government has imposed few requirements on his company.

“From here,’’ Rao said, “you can see the past and the future of Ethiopian agriculture.’’

From there it was possible to see a river designated for irrigating cornfields and rice paddies; it is no longer open for locals to water their cows. Several shiny green tractors bounced across the 6-mile-long field where teff, the local grain, once grew.

Boston.com

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