ethiopiantimes

August 20, 2014

Land Grab and the False Promise of Food Security

Filed under: Land grab — ethiopiantimes @ 11:26 am
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By Destaw Andargie (PhD)
August 19, 2014



 

One can only speculate why the secretive government of Ethiopia is giving away the country’s fertile land to foreign agribusinesses. But we know the official explanation; that is, such ‘long-sought’ agricultural investments enhance the country’s food security. For a country that is intuitively associated with hunger and starvation, there should indeed be no higher priority than food security. Yet, how agricultural production by profit-driven foreign businesses improves the food security of poor Ethiopians is not terribly clear. Indeed, compelling empirical and theoretical evidences show that increased food production per se doesn’t necessarily correlate to any improvement in the food security of people in any country. That is what I wish to discuss here. Before turning to this issue, however, a word or two on the equivocal concept of food security is in order.

A. Food Security: What is It?

The notion of food security, like GDP, conceals more than it reveals about how the actual lives of people go. It may mean different things, depending on whose security is at stake. Generally, food security is raised at three different levels:

i. Global food security: concerns with the aggregate global food supply sufficient to feed the world population. It is invariably about the supply side of the equation. Potentially, food insecurity might be an existential threat to humanity. Presently, however, the world is awash with surplus food. Indeed, overproduction has been a major concern in some regions of the world for decades that discouraging agricultural production now figures even as a goal under the World Trade Organization’s Agreement on Agriculture (AoA). Overproduction slumps food prices, and agribusinesses that dominate all chains of the world food trade don’t like that. Accordingly, the so-called blue box subsidies under the AoA are tied with a condition that receiving farmers limit their productions. It does not matter that around a billion people worldwide suffer from chronic hunger on a constant basis. As a matter of fact, as famine raged in Ethiopia in the mid-1980s, farm policy debates in surplus producing nations were centered on whether disposing the surplus food grain in the sea or dumping it to the third world in the form or aid or cheap sale is cost effective. Thus, for the hungry, global food security is largely inconsequential.

ii. National food security: refers to the availability at a national level of adequate amount of food for the entire population. Again, it is about the supply side of the equation, and thus it may not signify anything for the poor and the hungry. For example, India produces about 50 million tons of surplus food grain per year; yet, a third of its population suffers from chronic hunger. Similarly, although surplus food disposal has been a major concern in the United States since the mid-1980s, the US Department of Agriculture reports that millions of Americans suffer from food insecurity year after year. There are similar stories elsewhere. The crux of the matter is this: the abundance of aggregate food supply at the national level is often irrelevant for the insolvent poor.

iii. Individual/household food security: here is where food in/security figures in its most concrete manner. Food insecurity can be decisively tackled only at the individual/household level. Distribution rather than availability of food is at the heart of the problem of hunger. Indeed, the greatest misconception regarding hunger is probably the assumption that people go hungry because there is no food or there is less food than is needed to feed all people in the country. People starve either because they produce insufficient food or are simply too poor to command enough food in the market, not necessarily because there is a decline in the per capita food supply. It is often about the demand side of the equation. Even during times of famine, there is always food in the local market for those who can afford to buy. As the 18th century French princess Marie Antoinette’s legendary ‘then, let them eat cake’ might exemplify, it is often the case that some starve even when others live in blinding abundance.

B. Why Large-Scale Land Transfer is NOT the Answer to Food Insecurity

Agribusinesses produce food exclusively for the market. And obviously the market is need-blind; not only does it operate to the complete exclusion of the insolvent, but also may undermine how much food those who can pay are entitled in exchange for the price they pay. One’s ability to command enough food depends not only on how much one can spend on food, but also on how much others are willing to pay. One’s exchange entitlement may worsen, for instance, because others have grown richer and are buying more food, triggering a rise in food prices. Thus, while agribusiness acquiring land in Ethiopia may sell their produce anywhere in the world market, an average Ethiopian with an annual consumption expenditure of just $670 will have to compete with, say, a Swiss who can afford to spend $26,470 per annum on consumption. And, of course, the poor Ethiopian stands no chance under this scenario (even if we accept the seemingly inflated figure of $670). It would be foolish, therefore, to expect Karuturi to cater to poor consumers in Ethiopia.

Market forces, by their very nature, facilitate the movements of goods, including food, to places where they can fetch the most competitive price rather than to places where they have greater utility. During the Great Irish Famine, for example, food was actually exported from impoverished Ireland to opulent England. In Ethiopia too, during the 1973 Wollo famine, food was bought from markets in the province of Wollo and sold in Addis Ababa and Asmara. That is what the market naturally does-responding to demand, not to need. Not only food products directly but also productive resources, such as land are increasingly being diverted away from growing staple foods for the poor and the hungry towards cultivating livestock feed that would go to satisfy the dietary taste of the rich (i.e. expensive protein-rich animal products) and biofuel production. Such diversion of farm land was among the major drivers of the recent global food crisis, which is estimated to have plunged around a 100 million people into extreme poverty and hunger globally. At the same time, however, a rapid growth of per capita food consumption has been recorded among the growing middle class in many regions of the world. Indeed, we do not need to look elsewhere; many of the investors that have acquired land in Ethiopia seek to produce crop for biofuel production, and, of course, they do not have any responsibility towards the food security of Ethiopians. How this boosts the country’s food security is not obvious.

C. The Way to Tackle Food Insecurity

Hunger has both technical as well as political dimensions. A credible effort to stamp out hunger must thus address both dimensions of the problem. First, there should be sufficient food. The fact that hunger is more of a problem of distribution than of availability of food should not imply that there are no issues with respect to food supply. Indeed, and this is ironic, most victims of hunger are food producers. For poor countries, such as Ethiopia, low productivity associated with lack of technology and agricultural inputs, remains a veritable problem. That agricultural labor productivity in least developed countries, such as ours, is less than 1 percent that of the level in developed nations explains it all. As regards small holding farmers, therefore, any food security program must necessarily involve improving their food productivity. That is largely technical. For the urban poor, the availability of sufficient food stock in the country or at the local granary is not sufficient. Although food is physically available, it may still be economically inaccessible for the very poor. Therefore, any food security program in this context must ultimately aim at enhancing the capability of individual’s to compete and purchase enough food. That in effect means fighting urban poverty.

Poverty is both the root and consequence of hunger. People go hungry because they are poor (conversely, those crippled by hungry have a diminished chance of defying poverty). Yet, poverty does not offer foundational explanation to hunger. It begs the question of why people are so poor in the first place. We know that poverty is not inevitable. We also know that no society’s resources are too insufficient to extricate people from abject poverty and starvation. Indeed, too often, resource constraint is not even among the primary causes of poverty and hunger in the world today, including in Ethiopia. Endemic hunger rages unabated, not because the problem is invincible, but because its victims find themselves in socioeconomic and political circumstances that rob them of the ability to defy the tragedy. The fact that hunger is predominantly a rural phenomenon means that its victims are not only socially and economically marginalized, but also are often geographically removed from the scene of political decision making. Powerlessness, be it in the control over productive resources such as land, or in decision making processes at local and national levels explains much of the problem. While the starved are powerless and their voices too muted to be heard, they are often ignored, by those holding political and economic power. We heard several times our leaders denying the existence of famine, even as they plead for food handouts. A credible food security program must thus exhibit the political will to comprehensively address every handicap that undermines a person’s entitlement to food, whether it is illiteracy or bad land policy, genocidal corruption or misdistribution, political repression or overpopulation, discrimination or ecological degradation, institutional ineptitude or unemployment, lack of accountability or political instability.

 

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August 13, 2014

Premier’s Office Reversed MIDROC’s Land Ownership Cancellation

Filed under: Midroc — ethiopiantimes @ 6:45 pm
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Experts from Addis Ababa City Administration have been investigating the status of lands issued for MIDROC years ago for investment purpose. Plots of land besides Wabi Shebele Hotel in the Ledeta Sub City and the one around Beshale Hotel in the Yeka Sub City are those that are given to MIDROC and have been left without any construction for years.

Based on these, the experts had recommended for the land ownership licenses issued for MIDROC in these two locations to be cancelled. And hence, the licenses for both these locations are cancelled at the respective sub cities. Objecting the decision, MIDROC had filed its complaints on the case to the Prime Minister’s office and the Premier’s office has ordered the Addis Ababa City’s administration office to reverse the decision. 

 


The team of experts has also investigated the cases of 109 plots issued to investors that are left without any construction for years; among which it recommended license cancellation to 59 of them.
According to the Reporter, finally, after much delay, the city administration’s cabinet is preparing to decide on the land ownership cancellation recommendations this week.

June 14, 2014

Ethiopia: The post-Meles universe takes shape


By Elissa Jobson in Addis Ababa

Read the original article on Theafricareport.com

Prime Minister Hailemariam is developing a style of consensual politics, but some politicians and businessmen are having difficulty adjusting.

The passing of Prime Minister Meles Zenawi in August 2012 has shaken up the business and political elite.

Prime Minister Hailemariam Desalegn does not favour the top-down and snap decision-making practiced by his predecessor, preferring instead to consult more widely.

While this leads to a slower governmental machine, it protects the administration from the odd rash decision.

This more collegiate style of governance has opened up the space for a cadre of influential top advisers.

Old political hands Bereket Simon, who before Meles’s death had been slated to leave office in the next generational purge, and Abay Tsehaye are key members of a brain trust intended to replace the phenomenal intellect of the former Ethiopian People’s Revolutionary Democratic Front (EPRDF) leader.

Tedros Adhanom Ghebreyesus (1) has eased into his new role as foreign minister. He had spearheaded the country’s remarkable health reforms and now has room to make a name for himself on the global stage.

Unlike Meles, Hailemariam does not seem to crave the international spotlight.

Tedros’s popular Twitter feed – he has nearly 24,700 followers – and his strong statements on Africa and the International Criminal Court while chairman of the African Union’s executive council, have given him increased visibility.

Hailemariam’s appointment, soon after taking office, of two additional deputy prime ministers has given further clout to Debretsion Gebremichael (2), deputy chairman of the Tigrayan People’s Liberation Front (TPLF), one of the constituent parties of the EPRDF.

Aside from his dual portfolio as deputy prime minister for the finance and economic cluster and minister of communication and information technology – the latter of which sees him in control of the Ethiopian Telecommunications Corporation (ETC) – he is also chairman of two newly created companies, Ethiopian Electric Power and Ethiopian Electric Services.

Arguably, this makes him one of the most influential men in government.

Azeb Mesfin, Meles’s once powerful widow, has suffered mixed fortunes since his death.

Despite her failure to win the election for mayor of Addis Ababa, losing to former transport minister Diriba Kuma in July 2013, she remains a member of the political bureau of the TPLF, the EPRDF’s executive commit- tee and the Endowment Fund For The Rehabilitation of Tigray.

Public and private

The business world was rocked by the arrest in May 2013 of more than 30 suspects – including Melaku Fenta, director general of the Ethiopian Revenues and Customs Authority – on charges including tax evasion and receiving bribes.

But Ethiopia remains a land of opportunity, if one goes by the number of private equity companies passing through Addis Ababa.

The big state businesses like the Sugar Corporation and ETC remain unchallenged by private sector rivals.

Brigadier General Kinfe Dagnew continues to look untouchable as he sits atop the Metals and Engineering Corporation (METEC).

A state-owned industrial company consisting of close to 70 engineering enterprises and military hardware manufacturing entities, METEC is the only local contractor involved in the flagship $4.3bn Grand Renaissance Dam project.

Another survivor of the Meles era, managing director of Ernst & Young Ethiopia Zemedeneh Negatu, is making a push into technology companies in his private capacity.

In a well timed move into mobile banking and IT training, Zemedeneh is poised to reap dividends.

Although he was powerful under Meles, Mohammed Hussein Al Amoudi (3)’s star is no longer shining so brightly. Work on the Saudi Arabian and Ethiopian businessman’s enormous five-star hotel, situated on the compound of the African Union’s headquarters, stalled for several months last year.

His company Saudi Star’s rice farm is not yielding results, and Pakistani company MCG Consulting, which had been working on the project, pulled out at the end of last year.

November 15, 2013

Ethiopians Arrested at the Anti Saudi Arabia Protests In Ethiopia New Video Today

Filed under: Ethiopia — ethiopiantimes @ 10:03 pm
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November 4, 2013

Addis Ababa Road Authority takes over MIDROC’s 270mln Birr road project

Filed under: Uncategorized — ethiopiantimes @ 6:28 pm
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AARA takes over MIDROC’s 270mln Birr road project

Addis Ababa Road Authority takes over MIDROC’s 270mln Birr road project. This project was snatched from MIDROC Ethiopia Construction, after it failed to execute the work on schedule.

The contract that was signed between MIDROC and Addis Ababa’s Road Authority was for the construction of the 8.3 Kilometers long road that stretches from Gurd Shola area of the city, through Yeka, Summit and The Yeka – Bole road. Though the project that was started six years ago, on 2000 E.C, was planned to be completed two years later on 2002 E.C; the project has not yet been completed now, three years later.

Addis Ababa’s road Authority had issued persistent warning letters to MIDROC. Even though the Authority had decided to terminate the project years ago, it was only now that it has resolved to snatch the road project off from MIDROC.

December 7, 2012

UN: ‘Land Grab’ Deals Hurt Local Farmers

Filed under: Ethiopia,Land grab — ethiopiantimes @ 9:53 pm
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Controversial farmland deals in developing countries can have a negative impact on the people who live on the land, according to a new U.N. report.

While investment in agriculture is essential to help developing countries reduce hunger and poverty, the U.N. Food and Agriculture Organization says these large-scale “land grabs” don’t always help.

The surging global demand for food, fodder and fuel crops is driving a land rush in parts of the developing world.

Investors are pouring money into large-scale farmland leases in Africa, Asia, former Soviet countries and elsewhere.

‘Daylight robbery’

The Gambella region of Ethiopia is home to many such leases. It is also home to some of the last best farmland on Earth.

The Ethiopian government says it has leased more than 225,000 hectares to foreign investors, who have put more than $2 billion into the deals.

Ethiopian officials say this is just the kind of agricultural development the country needs to modernize farming, improve food production and provide jobs.

Obang Metho, who grew up in Gambella, sees it differently.

“I am not anti-investment,” he says. “But I am anti-daylight robbery. What is going on in Africa is robbery.”

Metho heads the Solidarity Movement for a New Ethiopia, an activist group based in Washington. He says farmers in Gambella have been pushed off their land to make way for companies from China, India and Saudi Arabia that are exporting the harvest back to the home country.

Human Rights Watch estimates that 42 percent of the land in the region is leased or on offer.

Hungry nation

Metho says that’s a serious problem for a country like Ethiopia, with hunger problems of its own.

“If they have land to give to the Indians, or the Arabs, the Chinese, the Saudis to come,” he asks, “why did Ethiopia not use this land to feed the Ethiopian people?”

Ethiopia’s Washington embassy says it’s not displacing small-holder farmers, and that it takes great care not to infringe on the rights of local people.

But large-scale land deals in developing countries have become more common in recent years as global food commodity prices have spiked. Critics call them “land grabs.”

“’Land grab’ is sort-of a controversial term, but I think it’s accurate in this case,” says Michael Kugelman, lead editor of “The Global Farms Race,” a new book on agricultural investments and food security.

Search for farmland

He says food-importing countries are looking for farmland abroad to limit their exposure to volatile global markets.

“These food importing countries also lack the land and the water at home to do the farming themselves,” he says. “So they’re going abroad to countries that are very willing to host them.”

Data are sketchy, but estimates of land leased are in the tens of millions of hectares worldwide.

Outcomes have been mixed, says Jomo Kwame Sundaram, economic and social development chief at the FAO.

The organization’s new report highlights the need for investments in agriculture in the countries hosting these land deals. But Sundaram says land deals may not always be the best way to do it.

“Land acquisisions are one of the most difficult type of investments to produce the types of desirable outcomes that we have in mind, like food security, local economic development, etcetera,” he says.

Countries get better results from public-sector investments in research and infrastructure, for example.

Pocketing the proceeds

Michael Kugelman says the food security and economic development benefits promised to the people of the host countries have not materialized. But he says many of the governments have benefitted.

“A lot of the governments in the countries hosting the deals are corrupt, they’re not very democratic, and they’re happy just to pocket some of the proceeds from these investments.”

And some of these deals are sparking conflict.

Protesters overthrew the government of Madagascar in 2009 in part because of a land deal that would have leased half the country’s arable land to a South Korean firm. The new government canceled the deal.

Responsible investment

International organizations, including the FAO and the World Bank among others, have developed voluntary guidelines for responsible land investment to try to promote more equitable investment.

The FAO’s Jomo Sundaram says the investor community wants the guidelines, too.

“There is quite a bit of demand by the private sector for those guidelines that will help them to protect their own investments,” he says.

But Obang Metho from the Solidarity Movement for a New Ethiopia doubts that voluntary guidelines will change the behavior of corrupt and autocratic governments.

“As long as the regime doesn’t respect the rights of their people, nothing will work,” he says.

Meanwhile, the rising demand for food will continue to drive fierce competition for the limited remaining land on which to grow it.

October 30, 2012

Al Amoudi’s Company refuses to pay 200 million Br after acquiring around 80,000tns of coal it had imported

Filed under: Al Amoudi,Midroc — ethiopiantimes @ 11:50 am
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The warehouse that Derba cement stores the coal that it bought from the enterprise.

The Ethiopian Petroleum Enterprise (EPE) is threatening to sue Derba MIDROC cement factory, a new entrant into the industry alleging that it has not paid around 200 million Br after acquiring around 80,000tns of coal it had imported, sources disclosed to Fortune .

The enterprise, which also imports petroleum for nation, claims that its working capital is tied up and hence is eying the court as an alternative means of getting its money back.

The enterprise has been delegated by the Ethiopian government to import coal since December 2011 when the government, decided to replace the Heavy Furnace Oil (HFO), a source of energy that cement factories use to burn the clinker to coal aiming at reducing their production cost and hence make them competitive.

The enterprise thus made a deal with the large-scale factories such as Mossobo, Derba and National Cement factories owned respectively by the Endowment Fund for the Rehabilitation of Tigray (EFFORT), Mohammed Hussien Ali-Al-Amoudi(sheikh) and East Africa Industrial Group as a major shareholder.

Accordingly, based on their reported demand, the EPE inked multimillion dollars contract with Hyton Inc, an international coal supplier company for the supply of 600,000tns of steam coal for these factories in December 2011.

Out of these, Derba which has the capacity to producing 2.5 million tonnes of cement on annual basis has the highest demand and takes the largest share, which is estimated at 50,000tns on a monthly basis.

The EPE so far has imported and distributed 144,000tns of coal to the three factories. However, all did not pay on time. Mossobo and National Cement also owe the enterprise 52 million Br and 30 million Br, respectively, according to sources at the Ministry of Industry (MoI).

Nonetheless, Derba did not effect any payment so far while it has been taking the coal from the enterprise that made it eying the court as alternative to get its money back, according to these sources.

This had drawn the attention of the MoI, which called three cement factories, and the enterprise for a meeting led by Tadesse Haile, state minister for MOI, last week.

Tadesse told Fortune that a consensus has been reached between the factories and the enterprise. “Since the coal is imported to reduce the costs of the factories, they should share a loss in case there is any.”

July 23, 2012

Commercial Bank Of Ethiopia provides 942 million birr loan to Al Amoudi The billionair of a food aid country to build 5 star hotel

Filed under: Al Amoudi — ethiopiantimes @ 11:19 am
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The Commercial Bank of Ethiopia (CBE) has approved a 942 million birr loan to MIDROC Ethiopia Project Office MEPO, a company owned by the Saudi billionaire Sheik Mohammed Al-Amoudi, for the construction of a five-star hotel and a paper plant. The Board of Directors of CBE, chaired by Bereket Simon, approved the loan two weeks ago.

Reliable sources close to The Reporter disclosed that CBE will disburse 850 million for the Grand African Union Hotel which is located off Roosevelt Street, while the rest, 92 million birr, is for the construction of MIDROC’s Maya PP bag factory.

The CBE approved the project loans by holding the two properties as collateral.

Originally, around 80 sq.m of land that the hotel will be built on was granted to the AU by Addis Ababa City Administration in 2006. However, later on, following the bid floated by AU for the construction of the hotel, MIDROC submitted an extraordinary proposal that pledges to cover the full cost of the construction of the hotel if AU is willing to transfer the title deed of the plot of land to it.

Subsequently, AU cancelled the public bid and accepted the proposal which enabled the city administration to transfer the title deed of the plot to MICROC.

Last year the city administration granted MIDROC some 17,000 sq.m of land. Following that, MIDROC also requested additional land for security and parking.

Currently the construction of the Grand Hotel is under way and it was also learnt that the loan has already been disbursed for the company.

The other beneficiary project from the CBE loan is Maya PP bag factory under the management of Haile Asegide’s Derba MIDROC.

The objective of the PP bag factory is to provide plastic bag packaging for the packing of cement and rice produces of Derba MIDROC and Saudi Star Agriculture Development, respectively.

The plastic bag factory is located in the Derba areas of the Oromia region which plans to be sited on 13 hectare of land. The factory aims at producing some 80 millions of bags a year.

MIDROC is one of the biggest customers of CBE which has over 547 branches across the country. Currently, it is the second biggest creditor of CBE, next to government’s road project

July 9, 2012

• Video: Celebration in Dallas as ESFNA is crowned with success

Filed under: Al Amoudi,Ethiopia — ethiopiantimes @ 1:41 pm
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Dallas, Texas (July 7) – Thousands of sports fans on July 7 sang the songs of joy as their week-long ESFNA soccer tournament ended successfully. The tournament is also a cultural site where tradtional and modern Ethiopian songs and dances are staged by various groups. As ESFNA is clearly crowned with success, state-sponsored tournament in Washington, DC meanwhile ended in disgrace on publicly-deserted stadium. The regime thought money would buy the people. They were wrong. The blood money only bought the hodam – or hoodlam – and they were few in number!

July 5, 2012

Al amoudi’s, billionaire and the looter of food aid country festival in DC total failure

Filed under: Al Amoudi,Ethiopia — ethiopiantimes @ 9:12 am
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To all Ethiopians,

Mark the people in the stedium as looters and enemies of Ethiopia. These people enjoy the blood money of Al amoudi , the looter of  food aid country/.

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