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October 17, 2010

Indian company leases land for rice cultivation in Ethiopia

by Hailu Teklehaimanot

Sannati Agro Farm Enterprise (SAFE) Plc received a 10,000ht plot of land in Dimi District, Gambella Region, for the cultivation of rice, pulses, and cereals, from the Ministry of Agriculture and Rural Development (MoARD) on October 1, 2010.

SAFE, which was established with an investment capital of 10 million dollars, received the land for a total of 39.5 million Br on a 25-year lease at 158 Br per hectare per year which is to be paid annually for the duration of the lease. The company paid 1.58 million for the first year.

“We are planning to cultivate mostly rice, all of which will be exported to the United States (US),” said Pradeep Mannemela, chairman of SAFE. “We will use a system of rice intensification (SRI) which uses less water than marshy rice fields.”

Although the company has a rice field in India, which, at 300ht is very small when compared to the land they have acquired in Ethiopia, the land it acquired in Gambella has two advantages over other places, according to Mannemela.

“One is the ability to export which we cannot do in India,” he said. “The other, most important, factor is that the land consists of 7.2pc organic material which is very important for rice cultivation, as opposed to 0.05pc in India. Even with that, we will be rotating the crops we cultivate with pulses, which injects nitrogen into the land, and cereals to replenish the land,” he said.

The average organic material required for rice cultivation is two to three per cent.

The company has already ordered equipment like tractors, planters, and seeders from New Holland, an American brand that is produced in India, which is worth 1.5 million dollars to two million dollars and should arrive in December 2010, according to Mannemela.

The new land acquisition by SAFE makes it the fourth Indian company to lease land in the Gambella Region, along with Karaturi, Ruchi Soya, and BHO Agro Plc. Out of these, Karaturi leads the pack in magnitude with 300,000ht for the cultivation of wheat and maize which is also meant for export.

Mannemela, who is trained as a computer scientist, owns Verinon Technology Solutions Ltd, an Information Technology (IT) company. He started this company, based in the US, with an Ethiopian partner.

“I got into agriculture because it is where the next economic boom will be as it was in IT in 2000,” said Mannemela. “Even though I am into IT, my family has been cultivating rice for generations.”

The company plans to expand its agricultural endeavours and may acquire up to 100,000ht in Ethiopia, according to the investment proposal it submitted to MoARD.

“We have big plans but we would like to prove ourselves on this land before we go to the next level,” Mannemela said.

Addis Fortune

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