Agro-investments in Ethiopia

In recent years many large-scale agro-investments in Ethiopia have come from Saudi-Arabia and India. NAI guest researcher Kassa Teshager Alemu is looking into how these investments affect rural people in Ethiopia. Investments have led to certain improvements, for instance in infrastructure, but they have also led to conflicts with the population.  In some cases people have been displaced to other areas.
– I will investigate the reasons for the conflicts. Is it because of investors’ bad behaviour or is it because of the design of the agreements? It is also interesting to see if international guidelines, for example, Principles of Responsible Agricultural Investments that Respect Rights, Livelihoods and Resources, are fulfilled and their implications for the future development of agriculture, says Kassa Teshager Alemu.

Large investment in agriculture is a rather new phenomenon in Ethiopia. The government has been, and still is, supporting smallholder farms in order to improve agricultural productivity. The idea is to give incentives to smallholders to grow cash-crops for export, and by this means eventually establish an industrial agricultural sector in Ethiopia. However, today the government is more interested in attracting foreign investors.
Most of the investors are involved in producing food crops like maize and rice. These are not for domestic consumption but for export. This is what the government wants. In fact, companies that export more than 75 per cent of their production receive tax reductions and better land-leasing deals.
– The government has much interest in gaining more income from exports.  Although, this is likely to affect the nation’s food security, says Kassa Teshager Alemu.

One of the key issues is how agreements between the government, investors and the local population are carried out.  Local farmers are seldom consulted in the process; they are only represented by local authorities. What the future for Ethiopian agriculture will look like, according to Kassa Teshager Alemu, very much depends on how the government involves local farmers and ensures agreements are fair and transparent, and also how it establishes controlling mechanisms for the effective implementation of these agreements.
– If nothing is done, investors will only seek to maximise their profit and the government will count money from increased export earnings without taking into account social consequences. I am not against foreign agricultural investments, l even promote it.  However, they must be performed in a responsible and accountable manner. Today they are not, says Kassa Teshager Alemu.

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