February 1, 2012

After kicking out Ethiopians from Commercial farming Indians now dominate the business

More than 250 thousand hectares of a total of 347.1 thousand hectares currently allocated for commercial farming in Ethiopia has been acquired by Indian firms and individuals according to a report from Access Capital.

The Agriculture sector has seen an 8% growth in recent years with output estimated at 13 billion US dollars according to current GDP statistics claimed the report.

The report also established that only 12% of arable land is being used for rice cultivation, 17% for tea, 42% for pulses, 64% for oil crops and just 1% each for horticulture and cotton.

The largest plot of land being utilized for commercial farming is operated by Karuturi Agro Products with 100 thousand hectares of land in Gambella Regional State.

More than 42.5 thousand hectares of land acquired by six local firms and individuals comes in second place and a Chinese company has the third largest holdings with 25 thousand hectares allocated for sugar cane development.

A total of 13.57 thousand hectares of land puts the combined investment of Ethiopian Diaspora investors in the fourth place and Saudi Star Agricultural Development follows in fifth place with 10,000 hectares.

It is to be remembered that the Ethiopian government allocated 3 million hectares of land for commercial farming and is offering various incentives to encourage investors in the sector.

Incentives include tax holidays extending from 3 to 7 years and exemptions from customs obligations on imported capital goods. Investors exporting more than 75% of their produce and reinvesting profits locally are also exempted from minimum capital requirements.

There are currently no restrictions that put demands on the use of land or determine purposes and investors are allowed to use natural water resources free of charge.

Source: Capital


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