Ethiopia Slashes Land Concession to India's Karuturi Global

By Staff Reporters May 5, 2011 (Ezega.com) - The Ethiopian Government has reportedly reduced the land concession given to Karuturi Global Ltd. by two-thirds from 300,000 hectares on the premise that it was too big for the company to manage. However, refuting media reports as “completely baseless,” Karuturi Global has denied the reduction in the Ethiopian Government’s land concession. Further reports claim that the Ethiopian Government might give an additional 200,000 hectares to Karuturi if it develops the current 100,000-hectare concession in two years. According to earlier reports, Esayas Kebede, director of Agriculture Ministry’s land investment support directorate, was reportedly saying that the Ethiopian government held consultations with Bangalore-based Karuturi six months ago regarding the amendment to reduce the concession by two-thirds. During an interview, Esayas argued that Karuturi Global should get a plot of land that they could easily manage, given the vast expanse of land measuring 300,000 hectares, which is difficult to manage by a single company. He urged the need for a rational approach to determine how much land Karuturi is capable of handling based on its self-evaluation and performance evaluation and monitoring capacity of the Ethiopian Government. Lauding the Indian company’s development efforts in his country, Esayas said that the Ethiopian Government, looking for “real development,” was happy with Karuturi. Besides, Esayas suggests that the government was looking forward to creating a corridor measuring 8,000 hectare through Karuturi’s land for the annual migration of white-eared anteleope from Southern Sudan. Karuturi’s Denial Denying media reports, Karuturi alleged that there is no such intimation from the side of the Ethiopian Government. Karuturi spokesperson Niladri Mondal said that had they received any legal letter from the Ethiopian Government in this regard, they would have taken the issue into consideration. According to Karuturi’s lease agreement, the Ethiopian Government would consider giving the company an additional 200,000 hectares, provided that it develops the allotted tract of land adequately within a period of two years. With an investment of $100 million in Ethiopia, Karuturi Global plans to cultivate 65,000 hectares this year so that its first harvest of rice, sugarcane, palm oil, and cereals is ready to be sold in October in some East African nations, besides Ethiopia, according to Chief Executive Officer Sai Ramakrishna Karuturi. Ethiopia Development Efforts According to the Agriculture Ministry, Ethiopia has offered investors agriculture land measuring more than 350,000 hectares in Benishangul-Gumuz, Gambella, and Southern Nations region. Foreign investors include India, Saudi Arabia, and China. Overseas Ethiopians have also contributed some to the country’s development spree, and the Ethiopian Government wants them to invest more in their motherland.  The government believes that foreign investment in the country’s agricultural land would create jobs, provide technology, boost export revenue, and improve food security.