The Ministry of Agriculture (MoA) disclosed that the performance of private commercial farms in the country is very slow. Only 17.6 percent of the 2.2 million hectares of land appropriated to private investors has been developed so far, according to data obtained from the ministry.
“Out of the 2.2 million hectares of land transferred to private investors only 372,088 hectares is developed. This represents 17.6 percent of the total land allotted for private agricultural development,” said Tarekegn Tsigie, who handles communications affairs of the ministry.
About 11,773 domestic and foreign agricultural investors have been licensed in Ethiopia with a cumulative registered capital of 132 billion birr. Out of the total licensed agricultural investors, 5,284 of them have received 2.2 million hectares of land on lease basis. Only 126 of the 5,284 investors who received land are foreign nationals.
With regard to land distribution, almost 27 percent of the 2.2 million hectares belongs to foreign investors while the remaining 73 percent is owned by domestic investors. The largest single investment is being conducted by the Indian company, Karaturi Global. The company possesses 111,104 hectares of the 567,651 hectares distributed among foreign investors.
In a bid to facilitate agricultural investment, the federal government developed a land bank system in which regional states have to register land that exceeds 5,000 hectares in one plot. In doing so, the government managed to record more than 3.6 million hectares of land in its account since 2008 of which 440,000 hectares has already been disbursed.
“The logic behind expanding commercial farms is ensuring food self sufficiency and earning hard currency since commercial farms are allowed to export 70 percent of their produce while the remaining 30 percent is marketed at home. So far, they might be serving the purpose of earning foreign currency but with regard to food self sufficiency, it is a different scenario as more than 3.2 million Ethiopians currently need food assistance, argued an expert.
Agriculture is the backbone of Ethiopian economy. It employs 62 million people while ensuring more than 85 percent Ethiopia’s export earnings. It also contributes 43 percent to the country’s Gross Domestic Product (GDP).
In the list of world’s countries, Ethiopia stands 27th in terms of size. It has a total area of 113 million hectare of land of which 74 million is estimated to be suitable for agriculture. Only 12 million hectare of the arable land is so far cultivated.
A recent report by the British Broadcasting Corporation (BBC), citing the Food and Agricultural Organization (FAO), had put Ethiopia fifth on the list of countries who’ve given their plots proportionally to their agricultural lands for land deals, behind less publicized countries like Democratic Republic of Congo (DRC), Mozambique, Uganda and Zambia.
Ethiopia’s land deals proportional to its arable land is about 8.2 percent while DRC’s, the largest country in sub-Saharan Africa, is a whopping 48.8 percent, followed by Mozambique at 21.1 percent, Uganda at 14.6 percent and Zambia at 8.8 percent.