Business - Farmland

Ethiopia targets 3million ha for
commercial farms

6 November, 2009 | By Barry Malone

* Two million hectares already secured
* Indian investors eyeing land
* Food security concerns dismissed

ADDIS ABABA, Nov 5 (Reuters) - Ethiopia plans to offer 3 million
hectares of land over the next two years for investors to develop large-
scale commercial farms, a government official said on Thursday.

Countries in Asia and the Gulf -- such as China, India and Saudi Arabia
-- have rushed to buy farmland abroad to grow crops for their own
people after food price inflation last year highlighted the need for greater
food security.

Africa has become a prime

target, despite concerns

about the impact on the

world's poorest people, and

locals nicknaming the

practise 'land-grabbing'.

"We will make 3 million

hectares available for

investment in the next two years," Esayas Kebede, director of the
government's Agricultural Investment Agency told Reuters.

"This is land around the country that is not currently used and could be
used to produce coffee, cotton, sesame, sugar cane, tea, palm oil and
flowers."
The agency has already parcelled off two million hectares and is
negotiating a further one million hectares from regional authorities in the
huge country.

"More than 9,200 investors have received licenses for commercial
farms in Ethiopia since 1996, of which about 1,300 are foreign," Esayas
said.

Analysts point to massive potential profits in farmland investments as
global population grows and climate change chokes off supplies of
arable land.

Esayas said Ethiopia could offer investors a wide range of climatic
conditions, unlimited water resources and quickly developing
infrastructure.

The government offers incentives to both foreign and Ethiopian
investors, including tax holidays depending on export levels, duty-free
import of capital goods and grace periods of up to five years on land
rents.

INDIAN INVESTORS

The majority of investor enquiries are from India but there are also
Chinese, European and Middle Eastern firms operating in Ethiopia,
Esayas said.

India has invested nearly $4 billion in Ethiopia, including in agriculture,
flower growing and sugar estates.
Development organisations have expressed concerns about the erosion
of local farmers' rights by foreign investments in developing countries.

Ethiopia is still desperately poor and this year appealed for food aid for
6.2 million people. But Esayas said investment could be used to fight
hunger and poverty.

"We have 74.5 million hectares of cultivable land of which only about
15 million is cultivated by small scale farmers," he said. "When we give
land to investors they create jobs, they develop our technology and they
bring foreign currency."

The three million hectares selected were sparsely populated, he said.

Ethiopia is overwhelmingly reliant on its agricultural exports. It is
Africa's biggest coffee producer and the world's fourth largest exporter
of sesame seeds.

The U.N. Food and Agriculture Organisation says private investment to
develop agriculture in poorer countries is urgently needed if the world is
to double food output by 2050 and stamp out hunger that still afflicts
about 1 billion people.

Courtesy