By Dawit Endeshaw
The total area of farmland implicated in the latest warnings equates to approximately three-quarters of the size of Addis Abeba
Seven commercial farm developers, who occupy a total of 37,500ha of land in three regions, have received warning letters for leaving the land unutilised for so long. The area of farmland is almost equivalent to three quarters of Addis Abeba city or three times the size of Bole district.
During the early weeks of July 2016, the Agricultural Land Investment Administration Agency wrote a final warning letter to one of the developers and first warnings to the remaining five. This comes after a four and six-year wait, respectively, for the developers to show significant produce from their estates. The investors who leased the land, which ranges from 500ha up to 10,000ha in the SNNP, Gambella and Benishangul-Gumuz regions, have failed to bear fruit. In this respect, the total land leased in SNNPR takes the lion’s share.
Among the seven companies, five including the Omo Valley Farm Corporation Plc, Gutit Farm Development Plc, Ayka Addis, Dasani Farm, Teame Farm and Dasench Farm, are located in the southern region of the country – specifically across Omo. These farms occupied a total land area of 35,500ha. From these farms, Ayka received a final warning, while the rest only the first warning.
Ayka Addis, the textile giant owned by Turkish investors, leased 10,000ha of land from the region two years ago. The company leased the land in a joint venture with a local investor to source cotton material for its textile plants. As per the contract, the company was expected to develop 4,000ha of the land.
However, there is nothing there, said Daniel Zebene, communication director of the Agency.
“The problem emerged after a disagreement with our clients from Europe,” Wondem Getahun, advisor for Ayka, told Fortune. “There was a report compiled by news agencies that suggested that people had lost their land because of Ayka’s contract with the region, which was intended to erode Ayka’s reputation.”
Wondem went on to explain that after this, the client put a precondition of not buying Ayka’s products if the cotton came from that particular land.
“Following this, we ceased our activity on this farm,” he said.
Just this year, the Southern region administration moved the mandate of overseeing farm land for investment from its Investment Commission to a specific department under the Agriculture Bureau. A couple of months ago, the officials of the region discussed with the investors. During the discussions, problems revolving around such investments were highlighted. The investors were implicated in using the land for other purposes, as well as the impact this had on the environment.
The region is now getting ready to conduct a further study to identify the specific status of commercial farms.
“We have just started to collect data about the farm,” an official from the region told Fortune.
An Indian company called Verdanta Harvests Plc located in the Gambela Region, who have received a first warning from the company, leased 3,000ha of land six years ago. From this plot, however, the company has only managed to develop 143ha of land, with 158ha of land prepared for farming.
There were times when the company got into conflict over how it was managing the environment.
“We have tried to sort out the problem,” said Daniel. “The company’s focus on tea plantation was also accused of leading to the deforestation of a protected forest area.”
The last company to face a first warning was the Yomed Farm Development. The company leased 1,000ha of land from Beinshagul-Gumuz two years ago. Yet out of the expected 333ha, which has to be developed, none has so far materialised.
Again, it was reported three years ago when the farm was attacked by locals over resettlement issues. Following the warning, Verdanta has already appealed to the Agency.
The latest measure by the Agency came in another fierce action taken earlier this year, which resulted in termination of the lease contract of the developers. Back then, the Agency had taken measures on 18 farms. Yet the Agency has also temporarily suspended its mandate of transferring land for commercial farms. This firm decision was also followed by the launch of a study by a high level committee.
“Our study is still in process,” said Daniel. “I am sure the findings will help us to decide how the country should go ahead as far as commercial farms are concerned.”