BY JACO MARITZ
Africa’s agricultural potential has come
under the spotlight in recent years. The continent holds around 60% of the
world’s available and unexploited cropland, and with growing demand for food from
emerging markets, Africa is expected to play an important future role in
feeding the world. However, despite the lucrative returns that foreign investors
can achieve by investing in African agriculture, the on-the-ground realities of
operating in the continent is often less rosy. In many cases establishing a
large-scale commercial agriculture project in Africa is a long and rocky road.
During the recent Ethiopia Investment Summit,
held in Addis Ababa, representatives from two foreign companies that have
invested in agriculture projects in Ethiopia, gave an
interesting glimpse into the everyday challenges they experience.
Virgin land
Indian agribusiness company Karuturi first
started operations in Ethiopia in 2005 with a 10 hectare flower farm. Today it
is a major producer of cut roses in the country. Karuturi has also started with
the growing of cereals, rice and sugar from its 100,000 hectare farm in
Gambella province, in western Ethiopia.
The land that Karuturi is farming on has
never been cultivated. “We are talking of virgin lands, which have never been
ploughed for hundreds of years. We are trying to do that for the first time,”
said Birinder Singh, executive director of Karuturi Agro Products.
Morrell Agro Industries, a US company, has
also invested in 10,000 hectares of farmland in south-eastern Ethiopia, 200
kilometres from Somalia, where it grows drought resistant wheat seed.
Wallace Odd, executive vice president of
Morrell Agro, said that the company had to put in a lot of work to make the
soil suitable for agriculture. He explained that it takes three to five years
in order to aerate the soil and to “get it to do the kind of things that land
has to do to grow seed. We are finding that we are having to rip [up to] six
feet deep to turn it.”
The dusty soil also struggles to hold water.
“We have found that 75% to 83% of the water runs off. When you look at the soil
and the top soil, it is very dusty and it takes an awful lot for that dust and
that type of dirt to hold the moisture,” said Odd. To overcome this Morrell
Agro made divots, the size of half a tyre, in the field that act as small
“holding tanks” for the water.
Workers, villages … and wild animals
Another challenge faced by Karuturi is the
scarcity of workers in the thinly-populated area of Gambella. Singh noted that
when Karuturi’s farm is fully developed it will require around 25,000 people to
work in the fields. Urbanisation is also not helping the situation.
“Able-bodied men who can work on the fields are leaving the villages and going
to the urban areas … What is left behind is children and women,” said Singh.
Karuturi has, however, discovered that people
are willing to relocate to the area if they are given proper housing. “We are
creating large-scale infrastructure in terms of bringing people from
outside our farm … People live in straw houses and if you are able to create
infrastructure and provide them proper housing, people are ready to come and
stay over there.”
Morrell Agro learned some hard lessons with
managing the local villagers. There are five villages in the area, each with
its own idea of how the company should be farming, and how many people from the
village should be employed.
“We had to deal with villages. We had to deal
with compensating people for land, and that gets very emotional. Our first farm
manager was a little aggressive. He was too aggressive in the culture. He got
hit in the back of the head with an axe, and we had to medically evacuate him
…” Odd explained.
Things have improved considerably for Odd and
his team. “We’ve worked with the villages … We determined what the problems are
… We’ve built a school. We’ve put in two wells. Right now, from one well, we
have 500 to 800 people a day coming to get water from that well … So a lot of
what we are doing is to blend in with the culture, in with the communities.”
Some of the difficulties faced by these
farmers are also more unusual. Next to Karuturi’s farm is a major national park
with around 800,000 antelopes. To protect its crops from the animals, Karuturi
has now requested the government to give it permission to put solar powered
electric fences around its farm.
Government support
Singh said that the Ethiopian government has
assisted Karuturi with some of the problems it were facing. For example,
Karuturi was struggling to find quality seeds and agro-chemicals in the local
market, but the government has allowed it to directly import these inputs. Four
mobile network towers have also been installed on its farm. “Communication has
become easy, internet has become easy.”
He underlined the importance of making the
challenges experienced by commercial farmers known to the government. “For the
country this type of commercial farming is new. As we are new to the country,
the country is new to this concept of commercial farming. There are enough
interactive sessions where you can put forward your points. If the decision
makers are convinced that there needs to be a policy change, it happens.”
Looking ahead
Despite the challenges, both companies remain
optimistic about their ventures in Ethiopia.
“We are glad to be here … We are passionate
about Ethiopia … and we look forward to working here, and working with the
challenges and helping to solve the difficulties of doing business as well as
the difficulties of farming,” said Odd.
Said Singh: “There are challenges, there are
concerns, but still Ethiopia is a wonderful country to cut into agriculture. It
offers an excellent recipe for agriculture – excellent lands, water, fertility
of the lands, cheap labour … stable government, and a corruption free regime.”
“Agriculture is a journey, and we have only
made a beginning. The results cannot come overnight,” he added.
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