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Tuesday, October 12, 2010

Landgrabs – a view from the ground in Ethiopia



The “land grab” phenomenon has brought the related security threats of rising food prices and arable land shortages to a head in Africa. The least developed continent is playing host for some of the world’s richest investors, who are trying to snatch up what land is available to meet the food and biofuel needs of capital-rich economies.

Concerns about these large commercial farming operations often focus on lack of government oversight leading to displacement and loss of livelihood for local farmers. This has led international observers to raise the question – as Alex Evans noted at the release of the World Bank’s land grabs report – of what it might look like for governments to use this investment opportunity to their advantage.

After two months of field study in Ethiopia, we have some insights about how land acquisition has been incorporated in the national development strategy there. While everyone from the World Bank to the FAO has recognized this as a goal, the conversation about it has taken place in theoretical rather than empirical terms.

The ruling party in Ethiopia, the EPRDF, has been haunted by the specter of famine-driven revolution – which claimed its two successor regimes – since its ascent to power in 1991. Stephen Devereux, of the Institute for Development Studies, states the agricultural policy dilemma faced by the EPRDF:

“Should [the EPRDF] adopt conservative strategies that minimize risk but keep people poor, or push aggressively for growth and ‘grow [their] way out of poverty?’ ” (Social Protection and Agriculture in Ethiopia)

The EPRDF chose the latter strategy. In 2006, the Ministry of Finance and Economic Development released a five-year roadmap of sorts called the Plan for Accelerated and Sustainable Development to End Poverty (PASDEP). This document states that the “commercialization of agriculture” is its foremost objective, reflecting its commitment to grow Ethiopian farmers out of poverty.

They propose to do this by capitalizing subsistence farming. PASDEP, however, is unique among African development strategies in that it outlines how attracting commercial farms can, in turn, spur the commercialization of smallholder agriculture. Given this development approach, Ethiopia is an ideal case study of a country in which agricultural investment is situated in the context of a broader development strategy. This delicate balance – courting investors without sacrificing development aims to their preferences – is lacking in other African nations, a deficiency that World Bank identified as one of commercial farming’s most serious threats.

So what exactly are the benefits of commercial farms? The obvious macroeconomic answers include generating revenue by leasing or selling farmland, bringing in foreign currency, and boosting exports. They can also create jobs and promote infrastructure development. But other, less obvious factors have much greater direct impacts on smallholders.

These include establishing outgrower export schemes; introducing new technology, crops, or improved seed types to the region; or renting out equipment. We profiled several farms where some or all of these activities were already underway, and several investors told us their business plans were accepted over others in part because they involved practices that would promote rural livelihoods in addition to generating the typical benefits.

These activities – connecting smallholders to international markets, creating access to improved inputs, and mechanization – have historically been the province of resource-strapped government agencies in Ethiopia. The government is now aggressively trying to outsource this work to large-scale farms established by investors, who have much deeper pockets than the EPRDF.

This illustrates the principal innovation of Ethiopia’s agricultural development strategy: they’re relying on large commercial farms to catalyze a commercial revolution in smallholder agriculture. Whether this strategy succeeds or fails, it will have enormous impacts on the livelihood strategies of Ethiopians and the food security of the country.

More broadly, studying this case can yield insights about how the land grab phenomenon can be a tool for development. This type of study must begin immediately if international actors are to insure that agricultural investments help rather than hurt local populations.

Nathan Yaffe and Laura Dismore are students at Carleton College who just returned from a two month field study of large-scale land investment in Ethiopia. They can be reached at yaffen@carleton.edu and dismorel@carleton.edu.

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