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Hedge Funds Buy Ethiopian Farms at $1 an Acre

Sunday, July 24, 2011


Originally published by The Sunday Times


Flora Bagenal Nairobi

24 July 2011


AS BRITAIN prepares to send £38m ($43m) in emergency aid to Ethiopia to fight famine, the Addis Ababa government is selling millions of acres of prime farmland to foreign investors, including British and American hedge funds.


More than 7m acres is to be put up for sale, in addition to nearly 7m acres already sold. The land, which includes arable land, pasture, forests and wetland, goes for as little as $1 (£0.69) an acre on a 100-year lease. Much of it will be irrigated by a network of canals fed by Gibe III, a controversial dam still under construction on the Omo River.


Foreign acquisition is forcing local communities, many of them semi-nomadic, off their traditional lands and depriving them of access to water sources.


Chinese, Indian and Saudi Arabian agribusinesses have all bought land in Africa to protect against future food shortages at home. According to a report by the Oakland Institute, a California-based environmental think tank, British and American hedge funds are behind many of the biggest land purchases.


The report claims many of the deals are unregulated and opaque, and lead to the rights of local farmers and peasants being violated. "Many of the deals will provide few jobs and force many thousands of people off the land," said Anuradha Mittal, Oakland's director.


Human rights groups say the land sales will do nothing to address Ethiopia's long-term food crisis. "No one should believe that these investors are there to feed starving Africans. These deals lead only to dollars in the pockets of corrupt leaders and foreign investors," said Obang Metho, an Ethiopian rights campaigner in America.


Meles Zenawi, Ethiopia's prime minister, has defended overseas investment as the best way to pull the country out of poverty. "Anything from wheat and other cereals up to tea, coffee, palm oil and rubber can grow in the country and they [investors] will be very much welcomed," he said.


Farmers claim investors' interests and rights are being prioritised at the expense of their communities.


Farming minister Abera Deressa said recently that Ethiopia did not need to be agriculturally self-sufficient because it would "become a middle-income country in the next decade and just buy food from the world market". As many as 3.2m Ethiopians rely on foreign aid, making it the world's largest recipient.


Land sales in the Omo River area have been shrouded in secrecy and locals say they have been threatened with arrest if caught speaking to foreigners about the dam project or the resettlement of local farmers.


"Anyone opposing government development projects will be crushed like a person standing in front of a bulldozer," said a police chief.


Aid workers allege that units from Ethiopian special forces have been arresting young men in areas where the land is being cleared for foreign investors.


In Hana, a small settlement in the southeast, a foreign development worker said scores of locals had been badly beaten by Ethiopian special forces, with at least one left in a coma. "The trials of these people were very quick, often on doubtful charges, and the sentences seemed more severe than usual. They are being told if anyone expresses negative opinions about the plantations they will be arrested," he said.


Felix Horne, a consultant for Human Rights Watch, has seen widespread malnutrition in the Gambella region in western Ethiopia, where farmers have been moved off land and left with nowhere to grow their own food.


"I have never seen people so malnourished in this region. The situation is very bad now and everyone fears it will get worse," he said.


Horne says those who have resisted being moved into government villages have been beaten, arrested and in some cases raped. He was also told by locals that the government had been withholding food aid from relocated families.