Karuturistan, Ethiopia: The Fire Next Time? By Alemayehu G Mariam

October 17th, 2011 Print Print Email Email

The Flood This Time

“Karuturi’s First Corn Crop in Ethiopia Destroyed,” announced the headline. Karuturi Global Ltd., is the Indian multinational agro company that has been gobbling up large chunks of Ethiopia over the past few years. This time, Mother Nature gobbled up Karuturi. The company reported last week that its 30,000 acre corn crop in Gambella in western Ethopia was wiped out when the Baro and Alwero rivers overflowed their banks and overwhelmed Karuturi’s 80km long system of protective dikes. Head honcho Sai Ramakrishna Karuturi said his company took a $15 million “hit” from the floods. He was manifestly puzzled by the intensity of the calamity: “This kind of flooding we haven’t seen before. This is a crazy amount of water.”

Karuturi is today the proud owner of “2,500 sq km of virgin, fertile land – an area the size of Dorset, England-” in Ethiopia. Truth be told, Karuturi did not ask for this bountiful giveaway, nor did it lay eyes on it when it was presented with a 50-year “lease” on a golden platter by the ruling regime in Ethiopia. Karuturi was offered the land together with generous tax breaks and other perks for £150 a week ($USD245). Karuturi Project Manager in Ethiopia, Karmjeet Sekhon, giggled euphorically as he told Guardian reporter John Vidal the amazing story of how his company became the beneficiary of one of the largest free land giveaways in post-colonial African history:

We never saw the land. They gave it to us and we took it. Seriously, we did. We did not even see the land. (Triumphantly cackling laughter.) They offered it. That’s all. It’s very good land. It’s quite cheap. In fact it is very cheap. We have no land like this in India. There [India] you are lucky to get 1% of organic matter in the soil. Here it is more than 5%. We don’t need fertiliser or herbicides. There is absolutely nothing that will not grow on it. To start with there will be 20,000 hectares of oil palm, 15,000 hectares of sugar cane and 40,000 hectares of rice, edible oils and maize and cotton. We are building reservoirs, dykes, roads, towns of 15,000 people. This is phase one. In three years time we will have 300,000 hectares cultivated and maybe 60,000 workers. We could feed a nation here.

The ruling regime in Ethiopia claims that it “leased” uninhabited wilderness to Karuturi. It denies forcing the local people out of their land and “villagizing” (herding them into official villages) the heck out of them. But the evidence is incontrovertible. The “leased” land is not only the ancestral home of the people of Gambella but also the basis of their entire livelihood and survival as a tiny minority in the Ethiopian family. For Gambellans who live as pastoralist and subsistence farmers, massive dispossession and auctioning off their land for pennies will inevitably destroy the very fabric of their society and way of life and threaten them with extinction.

Karuturistan, Ethiopia (formerly Gambella, Ethiopia)

It is said that in Ethiopia “land is owned by the government.” If the “government” is the largest land owner, Karuturi must be the largest plantation owner and second largest land owner in that impoverished country. Indeed, it would be most appropriate to rename Gambella “Karuturistan” in the interest of full disclosure and accurate description of what is happening on the ground. Karuturi says it has all kinds of plans for its vast land holdings. It will “build taller dikes” to enclose the plantations “with no connection with outside water except through manually operated devices.” Karuturi is “aggressively rolling out an agriculture business venture in Ethiopia” and plans to “outsource 20,000 hectares of farm land in the African nation to Indian farmers on a revenue-sharing basis.” A “senior Kauturi official” told India’s leading business newspaper, the Business Standard, “We have got a decent response. We intend to give land and the necessary infrastructure to farmers who have the expertise in specific crop cultivation and get into a revenue share (65%:35%) with them. We hope to have agreements reached for around 20,000 hectares in the near future as part of the first phase.” Karuturi is actively negotiating with farmers from Punjab, India to launch its outsourcing venture.

Karuturi’s business model is simple: “Ask not what Karuturi can do for Ethiopia, but what Ethiopians can do for Karuturi.” Karuturi is in Ethiopia for only one thing: Profit and more profits. Just as it has built “dikes to enclose its plantations from flood water”, it also maintains a social, psychological and security enclosure to insulate itself from the local Gambella community . Karuturi maintains a virtual agricultural treasure island in Gambella. While foreign farmers are brought in as modern sharecroppers and given partnership interest, Gambella’s farmers are offered or given nothing. Why not offer Gambella farmers (the real owners of the land) a 35 percent share just like the Punjabi farmers?

Karuturi says it intends to give part of its vast landholdings to Indian farmers with “expertise”. The people of Gambella have their own time-tested agricultural expertise, but Karuturi does not want it and will not even make a symbolic gesture to help them acquire expertise by giving them training and education in new agricultural methods and techniques. Karuturi says it will export its corn and other commodities to “South Sudan and other East African markets” using “two tug boats with the capacity to carry 600 tons each”. Yet millions of Ethiopians are starving and dependent on foreign food aid for their daily bread. Some 7.5 million Ethiopians are kept alive daily by international food handouts. Last week USAID chief Raj Shah announced in Ethiopia that the US will provide $110m for famine relief. Karuturi says its commodities exports will “bring foreign exchange to the National Bank of Ethiopia.” What will Karuturi bring to the people of Ethiopia? The people of Gambella? More poverty, exploitation, environmental degradation?

Through Rose-Colored Lenses

Karuturi Ltd., is the world’s largest producer of roses. Its slogan is said to be “Let millions of roses bloom”. Roses are beautiful, but looking through rose-colored lenses one gets a rosy outlook on reality. Karuturi could easily mistake the vast tract of free land that was dropped on its lap, all of the tax breaks it receives, the duty free imports of machines and equipment it enjoys and all of the other preferential treatment it gets as proof of its arrival in Nirvana, not Ethiopia. Take the rosy lenses off and Karuturi shall behold an Ethiopia that ranks at the bottom of every international economic and political index: It is among the countries in the world with the lowest per capita incomes and highest inflation and unemployment rates. The ruling regime has been classified as one of the worst violators of human rights in the world. Karuturi looking through its rosy lenses may be unable to see the grinding poverty of the people of Gambella and the destruction of their way of life when they were forced to give up so much of their ancestral lands.

The most troubling aspect of Karuturi’s “investment” in Ethiopia is not only that it has created an island of wealth and prosperity in a sea of poverty in Gambella, but that its large-scale commercial farming operations and practices are manifestly unsustainable and likely to have a severely negative impact on the land and the way of life of the people. Numerous experts continue to warn that large-scale commercial farming operations and practices by land-grabbing multinational companies that use forest burning to clear the land, channel rivers and introduce exotic crop species cause permanent and irreversible environmental damage and ecological imbalance. The capital-intensive technologies of the multinationals displace local farmers and render them irrelevant necessitating outsourcing and importation of foreign farmers with “expertise”. “When over one-hundred papers were presented at the International Conference on Global Land Grabbing in 2011, not one positive outcome could be found for local communities.”

In Gambella, the people complain that despite millions of dollars in investments by Karuturi, they have seen few jobs, schools, clinics or clean water facilities for their use. At the end of the day, the people of Gambella will be the ones suffering the long-term effects of deforestation (land clearance by burning), reduction of ecological diversity, loss of local species, and environmental contamination caused by herbicides and pesticides used in large-scale commercial farming. When fertile Gambella becomes a virtual desert, the multinationals will move to another oasis in Africa.

Karuturi needs to take off its rosy lenses and ask itself a few questions: How could it create jobs and business opportunities for local Ethiopians when it is outsourcing its landholdings to Indian farmers? How could it improve the agricultural expertise of those Ethiopians in the local area when it is bringing in foreign “experts”? How could Ethiopia ever achieve food security and feed its explosively growing and food aid-dependent population when it is shipping out agricultural commodities on 600-ton tugboats under cover of darkness to feed the people of other nations? What will Karuturi do in the face of Ethiopia’s spreading hunger, famine and uncontrolled population growth? Will it build larger dikes, walls, fences and levees to keep the people out of its corn filelds? Will the regime send its soldiers to protect Karuturi from the hungry and starving hordes of Ethiopians begging for a few ears of corn at Karuturi’s gates?

There is a Better Way

Karuturi has the option of doing the right thing: Dump the current land acquisition and ownership deal and replace it with contract farming and deal directly with the farmers of Gambella (not Punjabi farmers). Karuturi (and other foreign investors) could provide the technology and capital, and the Ethiopians will be obligated to provide the land and labor. Karuturi could provide training to farmers in Gambella and enhance their “expertise” to make them more productive. Karuturi could supply grains and other agricultural commodities for the Ethiopian market profitably and over the long term maintain a sustainable and ecologically balanced agricultural venture. Is this too radical an idea or is it too old fashioned?

Rainbow Sign After the Flood?

It has been argued that regimes that seek out or fall prey to the big multinational land grabbers are dictatorships that exist on international charity and handouts and are thoroughly mired in corruption and debt. There is much talk these days about a “second generation colonialism” spearheaded by profit-hungry land grabbing multinationals. Some even talk about a “green gold rush” for fertile African land sold at fire sale prices by African dictators eager to line their pockets. These shameless moneygrubbing dictators will even agree to a deal that will export grain out of their countries as their population starves and they are panhandling the world for food handouts.

Truth be told, no one except a few of the top leaders of the ruling regime know the real deal in the land giveaway to Karuturi. Very little useful information is evident in the “agreement” made public with Karuturi. That “agreement” offers nothing more than the usual boilerplate full of meaningless legal mumbo jumbo routinely used for such “leases” by multinational land grabbers everywhere. For instance, the “agreement” alludes to environmental safety but provides no specific environmental standards to be followed. It talks about jobs, infrastructures and the rest but provides no specifics or details on the timetable for implementation or the scope of Karuturi’s obligations.

Over a century and a half ago, far, far away from Karuturistan, a prophesy was told in the lyrics of a song of African slaves toiling on vast cotton and tobacco plantations in America. “God gave Noah the rainbow sign: No more water. The fire next time!” God has given the people of Ethiopia the rainbow sign: Unite and come together as one rainbow nation. For those who divide and misrule and sell and buy pieces of Ethiopia, the sign says: No more water!

Release all political prisoners in Ethiopia, NOW!

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Previous commentaries by the author are available at: www.huffingtonpost.com/alemayehu-g-mariam/ andhttp://open.salon.com/blog/almariam/

  1. Lucy in America
    | #1

    indians are simply the shameless, stupides amd criminals who are everywhere where there is something to loott.Let come to ethiopia from all corners of of india, at the end of the day, we will burn them one by one as they destroyed our forests and burned. Indians are the same aswild animals who do not know the word ” shame”

  2. Hager Wedaj
    | #2

    The Pan-African business magazine, African Business, has a special report about Ethiopia, titled the “return of the African Lion”, in its October issue. Here is some excerpt from the report.

    It begins by writing, Ethiopia, Africa’s second most populous nation with 85m inhabitants, is the third fastest growing nation in the world, behind only China and India. However, if the Economist Intelligence Unit’s forecast for 2011 bears out, it will outpace both India and China next year. Ethiopian forecasters see the annual average growth rate of 11% continuing over the next five years with best-case scenario to approaching 14.9%.

    With a GDP of $32.3bn, Ethiopia is currently Africa’s fourth-largest economy, having surpassed Kenya to become the largest economy in East Africa. The country’s spectacular growth over the past six years has been driven largely by services sector, which has seen substantial investment by government and the private sector.

    The new Growth and Transformation Plan (2011-2015) anticipates that industry will grow at an average of 20%, while agriculture and services continue to register growth. Some analysts project GDP rising to $472bn in 15 years and per capita income rising to $4000 over the next decade making Ethiopia one of the three most powerful economies in Africa.

    Ethiopia has a potential to generate 45,000MW of hydropower, 10,000MW of wind and at least 1,000MW from geothermal sources. The country plans to generate 20,000MW of power within the next decade and to spend $12bn over 25 years on power generation.

    Gilgel Gibe III is set to generate 1,870 MW and due to be finished in July 2013 at a cost of €1.5bn. However it was dwarfed when in April 2011, Prime Minister Meles Zenawi laid the foundation stone for a $4.8bn Ethiopian Renaissance Dam to generate 5,250 MW on the Nile river.

    The number of towns and rural villages with access to electricity has increased from 648 to 5,136. The number of registered customers rose from 952,000 to 1.9 million. By the end of the 5 year GTP plan, the number of customers is targeted to grow to 4 million and increasing coverage from 41% of the country to 75%.

    Ethiopia has a $6 Billion dollar project to build three new rail lines with a total length of 2,395 KM over the next five years. One corridor involves remaking the Addis Ababa railway to the international border en route to Djibouti port. Other corridors go to the north and south west.

    Plan also includes a light rail in Addis Ababa.

    Ethiopian Roads Authority is budgeted to spend 7.2bn building another 85,500 KM of roads across the country in 2011/15. In the previous five years (2004/9) more than 11,000 KM of roads and 40 new federal roads were added. The road network totaled 48,800 KM by mid 2010.

    In 2004/5 there were only 20,000 mobile and 620,00 fixed line customers and only 13% of the population was within 5KM of a phone, but this was up to 62% by 2009/10 and is set to rise to 100%by 2014/15.
    The fastest change is in the number of mobile subscribers. By the end of June 2011 it had reached 10.5 million and could rise to 40 million by 2014/15. Fixed line subscribers were upto 854,412 and forecasts to rise to 3.05 million by 2014/15 and the internet and data subscribers were 128,764.

    Air Transport
    Ethiopia’s domestic and international airline services are operated by state-owned Ethiopian Airlines.Operating revenue for the airline was $1.2bn in the year to June 2010, according to Air Transport World. The airline carried 3.3m passengers and had net income of $121.4m, making it Africa’s most profitable airline. Big plans include pushing revenue to $10bn by 2025.

    Ethiopia is also fast upgrading the infrastructure. The modern terminal at Bole International Airport was built in 2003 and the airport was ranked the 11th busiest in Africa in 2010 with 3.8m passengers. Current expansion plans will expand it to three terminals and three concourses, two cargo mega terminals, a cargo terminal for perishable goods, a big aircraft maintenance hub and a five-star hotel for transit passengers.

  3. ስማ ደፋር
    | #3

    አዲሱ የሊዝ ህግ ከናካቴው ከህዝብ ላይ መሬት የሚንጠቅ እንዲሁም የኢትዮጵያ ህዝብ የንብረት ባለቤት እንዳይሆን የሚከለክል
    ህግ ነው፡ከንብረት ባለቤትንት አንዱ ዘርፍ መሬት ነው፡፡ ከዚህም በተጨማሪ ህዝቡን በአገሩ ጭሰኛ ያደርገውል።

  4. Dawi
    | #4

    I know the “land grab” is controversial but attracting foreign direct investment by itself is very competitive among developing countries. Listening to Zemedeneh Negatu from Ernst & Young Ethiopia, it is not easy to attract mega investors, a lot of work is involved withen a limited time frame. Otherwise some other hungry country will grab the investor. It is a cut throat business and off course, It has to be give and take.

    If the TPLF Dictatorship was able to attract few, it’s because dictatorship in general define and establish a pro-investment legal framework insuring economic liberties without dealing issues a Democracy encounters. Meaning no opposition parties to deal with. China’s command in this arena was able to attract Foreign Investment that turned 400 million citizens from poverty to middle income.

    It may surprise you but the Lion’s share of economic miracles happened under dictatorship.

    The economic Tigers of the 1980′s were the dictatorship of S Korea, Singapore and Taiwan. In the 70th was the military government of Brazil. Another is Pinochet of Chile. You know it’s funny but Taiwan was equal to Kenya in 1950.

    Having said that, in the following Agreement article 3.2 with Karuturi gives the government the option to cancel the contract withen six months if that is what is desired. So what is complicated about this lease. May be the good professor should elaborate once and for all so that we all understand it.

    3.2 Terminate the land lease agreement subject to at least 6 months prior written notice.


  5. Dawi
    | #5

    On another note:

    I can’t help but be amused for Prof. Al’s audacity (from his Ivory Tower) to tell Karuturi to contract back the land it leased from Gambela back to the “ Gambela Tribes men” (the owners) instead of offering it to the Punjabi farmers who have cash in their pocket and a farming back ground that made India a surplus producer country. Karuturi plans to make a deal of 65/35 partnership with the Punjabi Farmers.

    What I don’t understand is did Karuturi say to Al that he is a Bill & Melinda foundation? :) NO

    So what is up with begging an investor to play NGO?

    The thing is the lease has a driver that will adjust fees for the lease and other taxes. If Karauturi makes tons of money, the Gambela Gov. will adjust its lease & taxes accordingly. That is my understanding of the Lease. If everything works out Gambela will probably be the richest State in the nation to open its own Agricultural institutions to teach the people to farm. There is plenty of land to play farming for folks with a loaded state government behind them from the future lease & tax revenue, if that is what they want to do.

    Bottom line, Investors are here to invest and make money. It is our job to collect taxes and educate our own people.

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