Showing posts with label foreign investment. Show all posts
Showing posts with label foreign investment. Show all posts

Saturday, November 10, 2012

Land grabbing or development?

With increasing climate variability, nomadic pastoralists in arid and semi-arid agro-ecologies get more difficult time. The lack of fodder and water is threatening their herds. Very little is known about what the right way to support these pastoralists and increase their resilience: should we improve their livestock management, developing smart early warning information systems about availability of water and fodder (with smartphone applications for example)  and make sure that nothing hampers their mobility (like foreign direct investors)? or should we try to settle these nomadic people and teach them how to grow crops in water stressed area? 
Up until today there is no answer to this question : both the livestock and crop pathways have not yet been studied also because of the lack of evidence on the ground. The Ethiopian government, despite of the uncertainty, is in favor of the settlement (it is said that the major reason for settling is control over the region rather than livelihood improvement). Therefore land has been given to an Israeli company to start a pilot project to produce crops in arid areas with ground water (like in Israel). The company has started to build up goodwill of the communities by drilling wells that serves for the community livestock. Also part of the production is supplied to the pastoralists. Jobs are created. 
Somehow it looks like a great initiative from which we will be able learn what works and what doesn't. We will also be able to discover how pastoralists will adapt their livelihoods. Most probably part of the family will settle and work for the commercial farms get access to cash and food the other part of the family might continuing nomadic life. Combining the livestock and crop might increase the resilience of the pastoralists households, also insuring access to water and food during the droughts. 
Some open questions remain : is there a contract that obliges the commercial farmers to provide food to the community? or do they have the option to switch to export products only leaving the locals hungry? what is the impact the israeli project on mobility of livestock? How much groundwater is available, on how does the government insure that there is no overuse of the groundwater?
Somehow my intuitions tells me that this model can improve resilience and livelihoods of pastoralists, only if few commercial farm settle, allowing a cohabitation between nomadic and settled live. An upcoming research question will also be : what is this thresholds allowing for cohabitation of the two lifestyles? how does the contract with the commercial farmers need to look like?
The israeli pilot project is not just a pilot for the Ethiopian government, but also for livestock scientists. It will definitely challenge our concepts and allow us to learn. A story to follow up. 




Find here the article published last week in the English reporter about the Israeli pilot project : 

Some say Somali and Afar regions are deserts, Israelis dub it a “bread basket”

By Yonas Abiye

Looking at a wide portion of Somali or Afar regions, one might be tempted to call it as an unproductive or non-loam soil because of the hottest temperature and the acacia trees as well as thorny prosopis juliflora (derogatorily otherwise known as Woyane tree).
Meanwhile, in the eye of anyone from Israel, this is a funny view. For them, Somali or Afar areas are like a virgin and fertile land.
For Ethiopian pastoralists, whose livelihood depends on animal husbandry, agriculture had almost ‘zero position’. For them livestock are everything. Most of them have a belief that there is no life without livestock.

Though the Ethiopian government, as a national development strategy, had attempted to introduce the agriculture system to pastoralist areas, most of them seem hardly manageable to accept agriculture as an alternative means to their livelihood. Their life is always mobile.

Within these prevailing facts and challenges an Israel company, Agropeace, came to Ethiopia two years ago to engage in the country’s large-scale agriculture mainly focusing in the mass production of biofuel plants and floricultures as well as crops, unlike most local as well as oversees investors who do not dare to engage in such ventures in the region. This is obviously seem that many of the investors, if not all, prefer putting their money near fertile lands of the country around Addis Ababa and in the nearest and relatively modest towns.

Meanwhile, Agropeace looks determined to grow more in one of the country’s hottest and remote areas of Somali region such as Shinile and Gad districts.

In fact, for a longtime, ploughing lands or having agriculture practice has been an unusual, or unpreferable business in Shinile and Gad localities which are not very far from the town of Dire Dawa.

Having secured nearly 2,000 hectares from the Somali region four years ago, Agropeace launched its first pilot project by producing maize and caster seeds. Since such kind of agri-business has not been common in the pastoralist's areas, for Agropeace it was a challenging mission to gain the support of the local residents.

According to the existing tradition of most pastoralists, every plot of land belongs to their communal property where they feed their cattle no matter the title deed given to them as is common in other parts of Ethiopia. As a result, the Israel company had not received positive welcome from the resident pastoralist communities from Shinile as well as Gad.

So, the company had to work hard to get the goodwill of the pastoralists. Eventually since water shortage is the serious problem of the, Agropeace first built around six wells and delivered water to the community for their livelihood and to their livestock. Next, in its first year the company produced tomato, green pepper and maize and distributed it to the community. This was also coupled by teaching them a new trend of agricultural production on how to produce it and create employment opportunities.

Recently, the company organized a two-days field trip where its major shareholders from the US and the UK, along with the Israeli Ambassador to Ethiopia, as well as local officials visited the project sites in Shinile and Gad.

Briefing on the progress of the project, the founder of the company, Zir Brosh, told visitors that “the project is very promising. So far, from this pilot project, we have learnt that the area is very fertile and suitable for castor, any crops and vegetables so that we are able to grow year round. “

Yohash Zohar, the general manager of Agropeace Ethiopia, said that despite some challenges the company faces as an initial development cost the company is profitable in a short period of time.

“This project, I believe, will be a benchmark for Ethiopia and will attract many other foreign investors,” he told The Reporter.

“We truly believe that the drier regions of Ethiopia such as Somali and Afar regions can actually be the bread-basket of Ethiopia,” he said, adding that with the right development and usage of underground water they (Afar and Somali regions) can produce more cash crops probably for all other parts of Ethiopia together.

He also explained that the advantage of investing in the Somali region is also advantageous, logistically citing its proximity to the Port of Djibouti.
“It makes a lot of sense to invest in such areas,” Zohar said.

According to the general manager, the company is investing a total amount of 20 million dollars for its 2000 hectare project, out of which 70 percent of the investment loan is acquired from Development Bank of Ethiopia (DBE) while the rest is partly financed from Agropeace, development partners as well as from the income generated from the project itself.

He told The Reporter that the company aims to start exporting in 2013 for the first time, starting with some 2000 tons of castor seed that is estimated to be roughly worth about 2.5 million dollars.

So far, over 350 hectares of land has been cleared for castor production.

“In Israel we have a lot of experiences in developing deserts and turn it into productive agricultural farm. Once you have enough water and use it with kid gloves, it will be advantageous because being very dry is an advantage. When you have water for irrigation, you can absolutely control how much water you can use for your farm.”
For the company, infrastructure development is a bottleneck challenge that has already forced it to incur core investment costs.

Anteneh Gelaye, chief operation manager of the project, explained that such a kind of investment is the first project in the area.

Anteneh told The Reporter that at that demonstration site, Agropeace has carried out pilot project and has seen satisfactory results particularly in castor seed, soya bean, groundnut as well as maize.

“Though this areas is semi-desert, for example, last year using Israeli technology we grew an American maize seed. And we have harvested about 80 quintals from a hectare while is 30 quintals in normal case.”

The Israeli Ambassador to Ethiopia, Belaynesh Zevadia, hailed the company’s project saying, “I’m happy about this promising achievement. They did a great job.”

She also told the company, “I hope in a couple of years, you would reap good production.

“There is a jewish saying that goes “If you save one life, you will save the world”, Belaynesh said after she saw the water wells the company provided for the local residents “I was born in Gondar and grew up in Addis Ababa before leaving for Israel when I was 17. I didn’t know we have such kind of place. Now I’m proud of being Jewish. I’m proud of Ethiopia. Please keep saving more lives.”

Similarly, the vice president of development DBE, Tadesse Oge’e, praised the company for its project.

“Your commitment to invest in such kind of area is very fantastic while most investors prefer to invest in Addis Ababa and surrounding areas. We are ready to support this project and continue to support it.

Issayas Kebede, from Ministry of Agriculture, on his part said, “This is the kind of development that Ethiopia seeks. When you lose, we lose, when your gain we gain.
For a long time the area was known as one of the country’s smuggling corridor and black market zones.

Friday, February 10, 2012

Ambitious plans for Ethiopia

ZDF, the German TV has just brought a documentary on Ethiopia's ambitious plans. A great documentary that shows urban life, in Addis and Nekemte and shows more about the coffee trade. http://www.zdf.de/ZDFmediathek/beitrag/video/1556844/Afrika-ganz-anders!-Aethiopiens-Plaene
It basically focuses on the fast moving cities, the economic boom, the growing international (coffee) trade, the Chinese... interesting...
But Ethiopia could be so much more that the cheap producing shoes country and a coffee exporting nation as shown in the documentary. In the highland farmers produce about 10% from the full potential, of which 30-50% is lost in post-harvesting. There is a huge potential to become a major player on the world food market, if supply chains are developed, agriculture mechanized, improved varieties and livestock breeds combined with fertility management (fertilizer, and erosion control).
But somehow no one has yet understood how to get there and make use of the potential gains. Nor NGOs, nor extension services (government), nor the foreign investor (land grabbers), have managed to make use of these potential gains...

Sunday, September 4, 2011

Ethiopian strawberries in your supermarket?

I lately reported a lot from the Amhara region, near to Tana Lake. It is one of the high potential area for agriculture. Most of the crops are rainfed and productivity is low. Dry spells are the major reasons for crop failure. That's one of the reasons, why the Nile Basin Challenge Program is doing research there.
During my stay in Bahir Dar, I discovered that up until then I had missed out one of the major dynamics of the area. I met a rich Nigerian who came to the area for acquiring land in this area for commercial farming. It is just another "land grabber". As this is in still one of my favorite topics, I ended up having a discussion with him.
He acquired land in the dryer parts of the region, but next to a river. He will plant strawberries, and irrigate them with the water from the nearby river. I was pretty puzzled, as strawberries have a relatively short supply chain (need to reach the customer fast). Though Bahir Dar is well connected by road and air within Ethiopia, the infrastructure to reach international market are still lacking.
What i discovered is that the Bahir Dar airport, that is currently in reconstruction, is meant to become "Bahir Dar International Airport", and soon bigger planes will be able to land, including those containing the cooling system to export strawberries abroad. The Nigerian investor mentioned that he has contacts to Dubai and that this will be his first market, but ultimately he wants to reach the European market... It might be a matter of time until you will see the Ethiopian strawberries in supermarkets around the world.

Ethiopia feeding the world? In these famine time an unimaginable vision... but it could be possible. It crucially depends on how commercial farming develops and to what extend the "land grabbers" also think in terms of food security in Ethiopia.

Agricultural productivity is so low in the Ethiopian highlands, though it is located in a high potential areas. If foreign investors bring in the badly needed capital and the infrastructure to increase agricultural productivity, and if only the additional quantity of food produced is exported, then the vision of an well fed Ethiopia feeding the world is possible.

The only question that remains is : are the contracts offered by the Ethiopian government to the foreign investors smart or are they just short term maximizing profit? Do they insure that local population earns above the poverty line? Will local population have a viable livelihood? Do the foreign investor also invest in education and health? Is only the surplus of production exported? Do they insure the sustainability of agriculture (soil fertility and water resources)? Is national food security insured?

Bad or good, it is a matter of time until you will see Ethiopian fresh products in supermarket around the world, hopefully we will not forget to feed the Ethiopian population first.