Political distortions cannot hide the benefits of agricultural investments

March 4, 2013 - Since the fall of the dictatorial military regime in 1991, Ethiopia has developed a democratic system of governance. The new Constitution adopted and implemented in 1995 has produced a wide range of benefits in terms of economic prosperity, equality, peace and security and respect for human rights as well as democracy.

The Constitution stipulates that sustainable development, equitably shared by all segments of the society, a democratic system of governance and management of all potential threats deserve simultaneous and careful political attention by the administration.
All this, in fact, is fundamental for the creation of a prosperous Ethiopia, and the Government has implemented a series of policies and strategies aimed at building up the country's economic and human resources to achieve the defeat of poverty, to provide for economic prosperity and the establishment of a democratic system of governance.

One central factor in rapid and sustainable development has been the Government’s "Agricultural Development Led Industrialization" (ADLI) strategy. Agriculture, of course, continues to be the foundation of the Ethiopian economy. It still averages over 40% of the total GDP, and employs over 80% of the population.

So the three short-term development programs implemented during the last decade have all related to agro-development - the Sustainable Development Program to Reduce Poverty (SDPRP), the Program for Accelerated and Sustained Development to end Poverty (PASDEP), and, most recently, the Growth and Transformation Plan, 2011-2015, (GTP). These programs have played a major role in enabling Ethiopia to register double digit growth rates for almost all the last decade.

This growth has been particularly marked in the agricultural sector which has grown at an average of over 9% annually in the past decade. The main driver for this has been the emphasis laid by the Government on effective implementation of the PASDEP and the current GTP programs.

The development programs, particularly those introduced under the GTP, have put  special emphasis on enhancing the productivity and production of smallholder farmers and pastoralists, strengthening market systems, improving the participation of the private sector in agriculture, expanding the amount of land under irrigation and reducing the number of chronically food insecure households.

The overall target for the agriculture sector is a minimum growth rate of 8.1% per annum up to 2015. Sub-sectoral targets include tripling the number of farmers receiving extension package services, reducing the number of safety net program beneficiaries from 7.8 million to 1.8 million households as they graduate into productive units, and more than doubling the production of key crops from 18.08 million metric tonnes to 39.5 million metric tonnes by the end of the GTP. Any GTP target is raising the country's emergency food reserve from 400,000 tonnes to 3 million tonnes. The overall aim is to ensure that the country will be food-sufficient and self-reliant by 2015.

Government policy provides a multiple approach for the achievement of food security. One priority is increasing overall agricultural production and productivity of both pastoralists and smallholder farmers. The average production per hectare of an Ethiopian smallholder farmer is usually reckoned as no more than half the production achieved in developed agricultural areas. The Government aims to raise this to 70-80% of the levels achieved elsewhere.

The Government has also renewed its commitment to address root causes of low agricultural productivity, including the expansion of capacity building packages and support for dealing with problems of low soil fertility and crop nutrient imbalances. A set of soil fertility interventions, including new complex fertilizer formulations and improved agronomic management practices, are being increasingly introduced.

At the same time as improving smallholder productivity, the Government is also emphasizing both medium and large-scale agricultural investment. On the medium level, horticulture and floriculture including fruit and vegetable cultivation is being encouraged. The Government is also looking for large-scale agriculture investment to supplement its efforts for ensuring food security. This is being pursued without compromising the present and future expansion of land use or the productivity of smallholders.

The Government believes these investments will be of major importance in providing additional means of agricultural production and in creating additional job opportunities in the longer–term, as most are labor intensive as well as providing a series of additional benefits including technology transfer, infrastructural expansion and a source of foreign currency as well as food production.

However, despite the benefits accruing and expected from such developments, large scale agricultural investments in particular have been the target of criticism from various areas. Some concerns arise from misunderstandings based on inaccurate and one-sided reports but others are certainly deliberately orchestrated and politically motivated. One major source of misunderstanding has been the deliberate confusion between the description of ‘land-grabbing’ and the reality of agricultural investment for development.

The benefits of large scale investments in agriculture, including social transformation of an area and the improvements in food security, are deliberately ignored. Characterizing the process as ‘land grabbing', accusations are made that the investments "lack transparency in land lease deals and contracts do not specify details of lease arrangements", that "leases are long term and incredibly cheap", that "there are no requirements to assure jobs or conduct environmental and social assessments", and that "foreign investors are sending the entire agricultural output back their places of origin or export it to other destinations". In addition, it’s often claimed the process includes “forced villagization", that "alternative plots of land and improved services have not been provided as promised", that the "Government and investing companies commit human rights abuses to make way for land investments", that "investors do not have to pay import duties" and that the "Government has plans to lease up to 15% of the country's arable land".

In fact, none of this is actually true, and one reason is that the Federal Government, four years ago, legislated to take control of negotiating the larger lease agreements, of over 5,000 hectares, to make sure that it could deal with any concerns over the details and the transparency of the agreements and resolve any contradictions. It wanted to be sure of the specific details and to lay down the requirements for jobs for members of local communities and for the conduct of all the necessary environmental and social issues and assessments.

Contract documents prepared for foreign agriculture investments involved in food production, for example, must include an obligation for investors to follow a 40%/60% division, with 40% of produce provided for domestic market consumption and 60% going to export. The Government has also made sure that the leased land comes from unoccupied areas with relatively low fertility and productivity or from sparsely populated areas.

Where displacement is involved, it can only be carried out with prior agreement and full consent of those moving. Despite allegations to the contrary, this has been firmly adhered.  Neither displacement nor the villagization programs have involved any forced relocation, and all those moving have been provided with equal or more extensive resources of land as well as significantly better access to services and infrastructure.

The deals for large-scale or long-term investment aren’t, in fact, particularly cheap, but they have been carefully assessed in the light of the Government's key purpose. This is less to make a financial profit from the payment of the lease than to provide for major contributions towards the country’s overall agricultural production to ensure food security and create additional job opportunities.

One example of the latter is in the Omo Valley where the sugar plantations are expected to produce over 150,000 jobs for members of the local communities in the Valley. Other medium-to-large agricultural investments, both domestic and foreign owned, are also creating significant job opportunities, and additional benefits include contributions to technology and expertise transfer, infrastructure expansion and a source for foreign currency.

In return for all these benefits and to attract more investors, the government offers some attractive modalities and incentives including a reasonable price for leases, exemption from import duties, tax holidays, speedy services and on occasions, loans, particularly for agricultural sector developments. Incidentally, the claim that the "Government has plans to lease up to 15% of the country's arable land" is simply rubbish. The Government has repeatedly announced that it would be allocating up to five million hectares of land for agricultural investment out of the 80 million hectares of arable land suitable for agriculture.   

The Government has always been quick to investigate any possible claims relating to failure to deliver its promises over substitute lands or better access to services and infrastructure, or over any alleged violations of human rights. It has aimed to address any problems arising from any possible misconduct of individuals either deliberately due to rent-seeking attitude or lack of commitment as well as failures of performance arising from a lack of capacity. Of course there have been problems from time to time, but none of the government investigations have shown the presence of any major problems in the process. Equally, the findings of a number of independent investigations made by donors and partners, involving repeated field visits to areas of concern, have found no evidence for any such claims and accusations.

In fact, some of the other claims and allegations indicate a different set of motives lying behind the self-appointed groups which raise the issue of human rights. These include the suggestion that agriculture investments in Ethiopia "exacerbate the potential for existing local drivers of violence originally triggered by the Ethiopian Government's tribal based federalism", that "investors should be wary of the prospect of becoming embroiled in these dynamics or caught between the state and local communities should grievances escalate in to conflict",  or that "large-scale investments are being billed as a way to improve South-South cooperation" as well as "land allocation for agro-investment is the Ethiopian central Government's means of exploiting the resources of the Ethiopian periphery" and that "most investing foreign companies are "new colonizers" of Middle East (Gulf) and Asian origin". 

These claims emanate from a barely concealed political agenda aimed at hurting the strong social fabric that has accepted and supported the Ethiopian federal concept of unity in diversity, and is intended to try to cut the existing ties between Government and people and disconnect the federal structural link bridging the central and regional governments. It is fueled by antagonism to the substantial investments made by groups or individuals from Asian or the Middle East, and by the views of people trying to hamper the pace of progress in South-South cooperation.

These sorts of deliberate distortion can only substantiate analysts who claim ‘land-grabbing’ in Africa is nothing more than an extension of neo-liberal support groups and individuals who are trying in every way possible to (re-)impose their ‘syndrome of domination ' on developing countries. Particular targets are countries that have been trying to follow their own independent approach for sustainable development. Even when it is clear real development is being achieved, there remains a real possibility that these fabricated and invented claims will continue to be made. No such claims or allegations, plausible, or implausible as most of them are, can however blur the fact that Ethiopia and its peoples benefit substantially from agricultural investments in Ethiopia and will continue to do so. (MoFA)