The Great Land Rush - Ethiopia: The Billionaire's Farm
Tom Burgis, Images by Charlie Bibby
As an orchestra of mosquitoes and crickets greeted the dusk, Bedlu Abera looked out over fields of rice stretching across the Ethiopian lowlands towards the horizon. A flicker of contentment crossed his face. “It’s satisfying,” he said. “We are making progress.”
The deepening darkness formed a canvas for an orange flame in the distance, beyond the perimeter of the farm. A hunter had set a fire to send prey scurrying from the undergrowth into his snares. Closer at hand, parked beside an irrigation canal, stood a combine harvester, at rest after a day in the rice fields.
This remote spot is a frontier in a contest for land that stretches from Myanmar to Saskatchewan. Investors are betting billions on an asset that is both more abundant and more fiercely contested than any other. The struggle playing out in the Ethiopian lowlands is a glimpse of others to come in a crowded, warming world.
Mr Bedlu, pictured, is 40, stocky and thoughtful. He wore hobnail boots and a scruffy goatee. He took over as Saudi Star’s farm operations manager in 2014. He made light of the hardship, but swapping the pleasant warmth of his home in the highland capital city of Addis Ababa for the fly-blown humidity of the lowlands had been tough. His family had yet to join him.
Saudi Star’s proprietor, a Saudi-Ethiopian tycoon named Mohammed al-Amoudi, has spent more than $200m turning a swath of bush into a farm the size of 20,000 soccer pitches. That puts the sheikh, as he is known, in the vanguard of the global land rush.
As the populations of better-off nations move to cities in ever greater numbers, the gap between the amount they grow and the amount they eat widens. Agricultural trade has long filled this gap. But a price shock in 2007, when staple crop prices doubled in a few months, demonstrated that global markets for food can break down. Then the financial crisis created demand for investments that were not linked to volatile equities and bonds. Governments, multinational companies and institutional funds started to pour millions, then billions, into other countries’ land.
From Southeast Asia to Latin America and sub-Saharan Africa, investors are seeking to profit not simply by trading the fruits of the earth — the rice and the coffee, the oil and the gold — but by controlling the land itself.
Few countries have attracted such attention from land-hunters as Ethiopia. A nation plagued by famine now envisages vast commercial farms pumping food around the region. But for millennia, land has been the source both of great advances and of bloodshed. Saudi Star’s patch of earth is no different.
Back in the cabin that houses his office after sundown, Mr Bedlu cradled a few grains of the farm’s rice in his palm. Saudi Star’s agronomists have bred Indian and Pakistani seeds into 62 varieties, testing each for their fecundity, resilience and flavour. Mr Bedlu spoke with relish of his three favourites. Two of them, Midroc 1 and Midroc 7, were named after Mr al-Amoudi’s conglomerate, the latest additions to a business empire that extends from Swedish oil refineries to Saudi defence contracts and has made him what Forbes estimates to be an $8.5bn fortune. The third, Gambella 1, took its name from the poor region in whose soils the sheikh has planted his grains.
Some of the variations are bred for the domestic market. Others are blended to suit the tastes of the wealthy rice eaters across the Red Sea. The price crisis exposed the vulnerability of countries that import what they eat, none more so than Saudi Arabia. It is said that Saudi Star was born after Mr al-Amoudi presented a sack of Ethiopian rice to King Abdullah. The monarch, delighted by its quality, gave his blessing to the sheikh’s plan for a vast farm across the sea.
In 2009, Saudi Star took a lease on 10,000 hectares in Gambella for 50 years. Later it added 4,000 more hectares when it bought an adjacent state farm. But the project struggled at first. The site is remote, the roads mostly unpaved and the locals are sceptical, even hostile.
Saudi Star’s was one of the most high-profile projects of an investment drive in which Ethiopia’s government leased 2.5m hectares, an area slightly smaller than Belgium. More than the same again is on offer. The government’s goal was to bring in modern farming technology to generate exports that would help a serious balance-of-trade problem and, some say, cement the ruling elite’s control over the fertile lowlands.
November’s harvest, covering only a portion of the allocated land, was long overdue. It was initially forecast to yield 10,000 tonnes of rice but Saudi Star halved the outlook after poor rains. The company plans to spend another $100m by 2018 completing 21km of irrigation canals, levelling the ground using lasers and bringing in more machinery. That would double the farm’s yield, allowing annual production of 140,000 tonnes, more than enough to supply the entire Ethiopian market.
Mr Bedlu, who studied plant science at university in Egypt, blamed the farm’s initial troubles on mistakes by inexperienced managers and consultants. He was part of a team that Mr al-Amoudi installed in 2014. It has brought expertise of large-scale commercial farming and is trying to improve community relations. The 4,000-strong staff includes 1,300 locals: 300 on permanent contracts and 1,000 seasonal labourers.
Temesgen Desigew, a rangy 23-year-old from a nearby town, has already risen to the position of agricultural supervisor. He joked that he wanted Mr Bedlu’s job one day. Asked whether his father, who grows maize on the family plot, used a combine harvester, Mr Temesgen’s eyes widened. “No, no,” he said. “An ox.”
Education in Gambella is rudimentary for most, so local hires are trained from scratch. In the rice-processing plant housed in a vast hangar rising from the scrub, a Pakistani technician took pride in the skills he was imparting to his local charges. “It’s difficult,” he admitted, his grin unwavering. “There are 86 languages in this country.”
Mr Bedlu was learning the language of the Anuak, the main ethnic group in the area, one of the two biggest in Gambella. Their livelihoods are rooted in farming and some have found work at Saudi Star. But armed guards on the perimeter were a reminder of what happened on April 28 2012, when decades of lowlander grievances were unleashed on the sheikh’s farm.
A group of gunmen, widely held to have been Anuak militants, opened fire at the company’s compound. They killed at least five employees before fleeing. Reprisals followed. According to Human Rights Watch, the military rounded up villagers, beating the men and raping the women.
The attack was a lesson for the new lords of the land, whether in Gambella or Brazil, Madagascar or Scotland. They can come with the promise of jobs, technology and progress. But land is like the lion that prowls near Saudi Star’s farm: hard to tame.
Hundreds of thousands of Ethiopians have starved to death in periodic famines. Another 8m were declared at risk by the UN in November. Nonetheless, a country once synonymous with deprivation has found its swagger. Official figures in this country of 97m people show more than a decade of double-digit growth, with strong exports of coffee, livestock and cut flowers.
Some analysts question the numbers, especially when they are accompanied by famine warnings. But there is physical evidence of advancement too: the smooth new roads, the telecoms infrastructure, the dams — and Barack Obama, who in July last year became the first sitting US president to visit Ethiopia. The country is a self-styled “developmental state”: a nation, like China, Singapore or Rwanda, where an authoritarian government sets a strict economic path.
The ruling Ethiopian People’s Revolutionary Democratic Front took power when it toppled the communist regime in 1991. Dominated by highlanders, as those from central and northern Ethiopia are known, it established a record for economic competence and intolerance of dissent. A surge of opposition support ahead of 2005’s elections prompted a crackdown: government forces violently dispersed protests against alleged rigging. In last year’s polls the party and its allies won every seat in parliament. Resistance to government high-handedness has boiled over in recent weeks into protests that have drawn a deadly response from the authorities. Ethiopia sits in the bottom 25 of Freedom House’s press freedom rankings, close to Russia and Saudi Arabia. Under a counter-terrorism law that human rights activists and lawyers say is used to stifle criticism, dozens of politicians, protesters, journalists and bloggers have been jailed, along with critics of the land deals.
For years, the EPRDF was opposed to the idea of starting big commercial farms. That changed about a decade ago as donors encouraged foreign investment in agriculture. Since then, Ethiopia has been at the forefront of a global phenomenon.
Lorenzo Cotula, a senior researcher at the UK’s International Institute for Environment and Development, has tracked the evolution of transnational land deals. “Land might be seen as an asset class by a fund manager,” he says, “but for many rural people it is a foundation for social identity and food security.” Most “wild west” deals failed after the food price shock of 2007, Mr Cotula says. Still, in a report published last year, he noted that momentum is again building. “Demographic growth, climate change, urbanisation and changing consumption patterns are widely expected to continue . . . compounding pressures on valuable lands.”
Ethiopia has tried to make itself the most attractive destination for land investment. More than 50 foreign investors, from India, Turkey, Pakistan, China and Sudan as well as Saudi Arabia, have leased Ethiopian land. The rents are often very cheap. Saudi Star’s contract stipulates an annual rate of less than $3 a hectare. Investors enjoy tax holidays and access to guaranteed credit.
Yet only 35 per cent of the leased land has been developed, according to official figures. That is partly because of the sheer difficulty of getting agricultural machinery and skilled manpower to the most remote corners of a landlocked country. The government has cancelled seven leases after investors failed to deliver on their promises. Some of the domestic investors, who cumulatively have taken much more land than the foreign ones, have simply stripped their plots for charcoal and left them idle.
The biggest lease, taken by Karuturi Global of Bangalore, has not fared well. The Indian group had sought to diversify into food from its multinational roses business but struggled with flooding and debt. Initially 300,000 hectares, the government cut the lease area to 100,000 hectares. Abera Mulat, head of Ethiopia’s land investment agency, wrote to Karuturi in December, saying its lease had been terminated because it had failed to bring its plot in Gambella into cultivation. Karuturi declined to comment but its boss was quoted saying the company would challenge the cancellation.
In an interview in his office in Addis Ababa in November, Mr Abera insisted that, despite allegations from activists, no one with a rightful claim had been forcibly moved to make way for investors. “There have been cases where people have come and said: ‘This is my land.’ If we are mistaken, then we will leave that land.”
There have, however, been forced relocations under the government’s separate “villagisation” programme. This, the government says, is designed to group scattered communities into larger settlements to make it easier to deliver basic services. Some Anuak, including victims who spoke to human rights activists, have reported beatings and rapes by the soldiers who enforced their resettlement. One Anuak activist notes a bitter irony: that some of those who were self-sufficient before they were moved now depend on food aid.
Mr Abera stressed that “the point of resettlement is not to clear land for investment”. He added, however: “After the land is vacant and we have done surveys, then why not?”
Okello Akway Ochalla had been in exile for a decade when he checked in to a hotel in Juba, the capital of South Sudan, in March 2014. An Anuak, his homeland lay across the Ethiopian border in Gambella, where Saudi Star and other flagship ventures of the Ethiopian government’s land drive have their farms. But Mr Okello could not go home.
He had been the governor of Gambella in 2003, when mobs of highlanders set about slaughtering the Anuak, after Anuak assailants allegedly staged a deadly ambush on a government vehicle carrying highlanders. According to testimony gathered by human rights groups, the Ethiopian military joined in the massacres. More than 400 people died.
The government claimed the deaths arose from inter-ethnic clashes between indigenous groups in Gambella. But Mr Okello refused to peddle the official line. Threatened with arrest or worse, he fled. He was granted asylum in Norway but maintained contact with Anuak scattered across east Africa, some of whom, according to his associates, were involved in the small resistance groups that have taken up arms against the authorities.
In exile, Mr Okello developed twin agendas, says Gora Ojulu, an Anuak refugee in Kenya who worked as a finance official in his regional government. “One, to have a strong political organisation that can oppose the government. Two, advocate around land: be against the narrative from the government that ‘we must move you to a place where we give you infrastructures, then we give this land for investors’.”
For Mr Okello as for many other Anuak, the dispute over the land deals has fused with their people’s century-long struggle to claim their rights from British colonialists, Haile Selassie’s Ethiopian empire, a communist dictatorship and, most recently, a federal government dominated by highlanders.