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Ethiopia Weighs Benefits of Foreign 'Land Grabs'

June 10, 2011

By Duncan Bartlett

In the past few years, massive amounts of land in Africa have been bought by foreign organisations.

A new report from the US-based Oakland Institute says that in 2009 alone, foreign investors bought or leased nearly 60 million hectares of land in Africa - an area about the size of France.

Hailemariam Desalegn, the deputy prime minister and minister of foreign affairs, told the BBC the arrangement was an advantage to Ethiopia.

But critics say the process amounts to a series of "land grabs" that deprive Africa of its own natural resources.

"Of course it's huge when compared with small countries in Europe but Ethiopia is a big countryā€¯ --Hailemariam Desalegn, Ethiopian deputy prime minister

Benefits debated

In Ethiopia, Saudi Arabia and China are planning to grow more than one million tonnes of rice in Ethiopia and take it back to their own countries.

Not everyone agrees.

An Ethiopian who is familiar with the region told the BBC that local people used the land for agriculture, hunting and for gathering fruit in times of famine.

He claimed that people had been bribed by foreign companies to leave their villages, although he was unable to offer evidence of this.

Ethiopian land transferred to investors

'Big country'

Foreign companies often pay compensation money to people living on the land they plan to acquire. They also offer them employment and help with more efficient and productive farming processes.

"Out of the arable land, the amount being sold is only 3%," Mr Hailemariam said.

"Of course it's huge when compared with small countries in Europe, but Ethiopia is a big country."

The area that is being leased is lowland where farmers are not willing to go and plough the land, Mr Hailemariam said.

It is often infested with malaria and the climate makes it unsuitable for small holder farmers, he added.

Food crisis

The other problem facing the country is the rising price of food. Food prices are now 30% higher than they were a year ago, according to government statistics.

The world's worst food security crisis is continuing in the eastern Horn of Africa, a US agency has warned.

The Famine Early Warning Systems Network said Ethiopia, Kenya and Somalia were in the middle of the world's worst food security crisis.

Large-scale emergency assistance was urgently needed "to save lives and treat acute malnutrition" in the region, the US agency said.

So will selling food abroad lead to more shortages and higher prices? Not according to Mr Hailemariam.

"Small holder farmers feed themselves first and sell when there is a marketable surplus," he said.

"It becomes a problem for the urban poor who have less capacity to purchase food at inflated prices. That is why we as a government allocate certain commodities and subsidise them and in that way we can alleviate some of the problems in the urban area."