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India's Karuturi Eyes Ethiopia Exports to S.Sudan, Kenya

May 9, 2012

* Firm has leased 100,000 hectares in Ethiopia

* PM says 4 mln hectares available for foreign investors

* Rights groups criticise deals


ADDIS ABABA, May 9 (Reuters) - Indian-listed Karuturi Global, which has leased land in Ethiopia for commercial farming, plans to export cereals, sugar and edible oil to South Sudan and Kenya upon completing cultivation in 2014, its director said on Wednesday.

The Horn of Africa country has earmarked some four million hectares of land for firms seeking to invest in agriculture, often around remote and sparsely-populated regions in its west.

Karuturi Global is among 32 firms that have snapped up land in the vast country, and is farming rice and cereals on its 100,000 hectares plot in Gambella province.

Managing Director Sai Ramakrishna Karaturi told Reuters the firm has so far completed cultivation of 15,000 hectares, and plans to complete 20,000 hectares of cereals and 15,000 hectares of sugar cane by next year.

"When we are done by 2014 we will have a million tonnes of cereals, 100,000 tonnes of edible oil and 200,000 tonnes of sugar," he told Reuters on the sidelines of a World Economic Forum gathering in Addis Ababa.

"Everything is for Ethiopia, but we will also export to South Sudan and Kenya," Karuturi said.

Official data shows annual land rental rates for foreign firms ranged from $12.8 per hectare to just $1.15, one of the cheapest in the world.

Apart from Karuturi, others investors include Indian firms Shapoorji with 50,000 hectares and BHO with 27,000 hectares, Saudi Star Agricultural Development with 10,000 hectares and China's Huana Dafengyuan Agriculture with 25,000 hectares.


The massive offering of land in one of the world's poorest nations - and in other countries across Africa including Sudan and Madagascar - has attracted intense scrutiny and criticism from rights groups.

The Oakland Institute, a U.S.-based research group, says land deals in Ethiopia lack transparency, hurt the environment, and have led to the forced resettlement of thousands. 

Yet, Prime Minister Meles Zenawi told the Ethiopia Investment Summit on Wednesday, his country's leasing of fertile, unutilised land is part of a two-pronged approach which will also see millions of small-scale farmers, the mainstay of the economy, helped to modernise and improve their productivity.

He said the resettlement was largely of pastoral communities in the east of the country, a long way from where the bulk of the arable land is being leased out for large-scale projects.

He said only 300,000 hectares had been leased so far, and that there was plenty of scope for more investment as long as firms fulfilled environmental and local employment requirements, had viable business plans and did not let the land lie idle.

"While we welcome private sector investment in agriculture, whether it is intensive farming, horticulture, floriculture, or the large-scale estate type ... there are requirements that have to be fulfilled," Meles said.

"That is perhaps one of the reasons why we have not yet succeeded in allocating more than 10 percent of the land that is currently available for investment."

Ethiopia announced last month that it planned to improve infrastructure and access to farmland and charge a premium to investors. (Additional reporting and editing by David Clarke)