MacroScan - Karuturistan, Ethiopia: The fire next time?

The Flood This Time

''Karuturi's First Corn Crop in Ethiopia Destroyed,'' announced the headline. Karuturi Global Ltd., is the Indian multinational agro company that has been gobbling up large chunks of Ethiopia over the past few years. This time, Mother Nature gobbled up Karuturi. The company reported last week that its 30,000 acre corn crop in Gambella in western Ethopia was wiped out when the Baro and Alwero rivers overflowed their banks and overwhelmed Karuturi's 80km long system of protective dikes. Head honcho Sai Ramakrishna Karuturi said his company took a $15 million ''hit'' from the floods. He was manifestly puzzled by the intensity of the calamity: ''This kind of flooding we haven't seen before. This is a crazy amount of water.''

Karuturi is today the proud owner of ''2,500 sq km of virgin, fertile land – an area the size of Dorset, England-'' in Ethiopia. Truth be told, Karuturi did not ask for this bountiful giveaway, nor did it lay eyes on it when it was presented with a 50-year ''lease'' on a golden platter by the ruling regime in Ethiopia. Karuturi was offered the land together with generous tax breaks and other perks for £150 a week ($USD245). Karuturi Project Manager in Ethiopia, Karmjeet Sekhon, giggled euphorically as he told Guardian reporter John Vidal the amazing story of how his company became the beneficiary of one of the largest free land giveaways in post-colonial African history:

We never saw the land. They gave it to us and we took it. Seriously, we did. We did not even see the land. (Triumphantly cackling laughter.) They offered it. That's all. It's very good land. It's quite cheap. In fact it is very cheap. We have no land like this in India. There [India] you are lucky to get 1% of organic matter in the soil. Here it is more than 5%. We don't need fertiliser or herbicides. There is absolutely nothing that will not grow on it. To start with there will be 20,000 hectares of oil palm, 15,000 hectares of sugar cane and 40,000 hectares of rice, edible oils and maize and cotton. We are building reservoirs, dykes, roads, towns of 15,000 people. This is phase one. In three years time we will have 300,000 hectares cultivated and maybe 60,000 workers. We could feed a nation here.

The ruling regime in Ethiopia claims that it ''leased'' uninhabited wilderness to Karuturi. It denies forcing the local people out of their land and ''villagizing'' (herding them into official villages) the heck out of them. But the evidence is incontrovertible. The ''leased'' land is not only the ancestral home of the people of Gambella but also the basis of their entire livelihood and survival as a tiny minority in the Ethiopian family. For Gambellans who live as pastoralist and subsistence farmers, massive dispossession and auctioning off their land for pennies will inevitably destroy the very fabric of their society and way of life and threaten them with extinction.

Karuturistan, Ethiopia (formerly Gambella, Ethiopia)

It is said that in Ethiopia ''land is owned by the government.'' If the ''government'' is the largest land owner, Karuturi must be the largest plantation owner and second largest land owner in that impoverished country. Indeed, it would be most appropriate to rename Gambella ''Karuturistan'' in the interest of full disclosure and accurate description of what is happening on the ground. Karuturi says it has all kinds of plans for its vast land holdings. It will ''build taller dikes'' to enclose the plantations ''with no connection with outside water except through manually operated devices.'' Karuturi is ''aggressively rolling out an agriculture business venture in Ethiopia'' and plans to ''outsource 20,000 hectares of farm land in the African nation to Indian farmers on a revenue-sharing basis.'' A ''senior Kauturi official'' told India's leading business newspaper, the Business Standard, ''We have got a decent response. We intend to give land and the necessary infrastructure to farmers who have the expertise in specific crop cultivation and get into a revenue share (65%:35%) with them. We hope to have agreements reached for around 20,000 hectares in the near future as part of the first phase.'' Karuturi is actively negotiating with farmers from Punjab, India to launch its outsourcing venture.

Karuturi's business model is simple: ''Ask not what Karuturi can do for Ethiopia, but what Ethiopians can do for Karuturi.'' Karuturi is in Ethiopia for only one thing: Profit and more profits. Just as it has built ''dikes to enclose its plantations from flood water'', it also maintains a social, psychological and security enclosure to insulate itself from the local Gambella community . Karuturi maintains a virtual agricultural treasure island in Gambella. While foreign farmers are brought in as modern sharecroppers and given partnership interest, Gambella's farmers are offered or given nothing. Why not offer Gambella farmers (the real owners of the land) a 35 percent share just like the Punjabi farmers?

Karuturi says it intends to give part of its vast landholdings to Indian farmers with "expertise". The people of Gambella have their own time-tested agricultural expertise, but Karuturi does not want it and will not even make a symbolic gesture to help them acquire expertise by giving them training and education in new agricultural methods and techniques. Karuturi says it will export its corn and other commodities to ''South Sudan and other East African markets'' using ''two tug boats with the capacity to carry 600 tons each''. Yet millions of Ethiopians are starving and dependent on foreign food aid for their daily bread. Some 7.5 million Ethiopians are kept alive daily by international food handouts. Last week USAID chief Raj Shah announced in Ethiopia that the US will provide $110m for famine relief. Karuturi says its commodities exports will ''bring foreign exchange to the National Bank of Ethiopia.'' What will Karuturi bring to the people of Ethiopia? The people of Gambella? More poverty, exploitation, environmental degradation?

Through Rose-Colored Lenses

Karuturi Ltd., is the world's largest producer of roses. Its slogan is said to be ''Let millions of roses bloom''. Roses are beautiful, but looking through rose-colored lenses one gets a rosy outlook on reality. Karuturi could easily mistake the vast tract of free land that was dropped on its lap, all of the tax breaks it receives, the duty free imports of machines and equipment it enjoys and all of the other preferential treatment it gets as proof of its arrival in Nirvana, not Ethiopia. Take the rosy lenses off and Karuturi shall behold an Ethiopia that ranks at the bottom of every international economic and political index: It is among the countries in the world with the lowest per capita incomes and highest inflation and unemployment rates. The ruling regime has been classified as one of the worst violators of human rights in the world. Karuturi looking through its rosy lenses may be unable to see the grinding poverty of the people of Gambella and the destruction of their way of life when they were forced to give up so much of their ancestral lands.

The most troubling aspect of Karuturi's ''investment'' in Ethiopia is not only that it has created an island of wealth and prosperity in a sea of poverty in Gambella, but that its large-scale commercial farming operations and practices are manifestly unsustainable and likely to have a severely negative impact on the land and the way of life of the people. Numerous experts continue to warn that large-scale commercial farming operations and practices by land-grabbing multinational companies that use forest burning to clear the land, channel rivers and introduce exotic crop species cause permanent and irreversible environmental damage and ecological imbalance. The capital-intensive technologies of the multinationals displace local farmers and render them irrelevant necessitating outsourcing and importation of foreign farmers with ''expertise''. ''When over one-hundred papers were presented at the International Conference on Global Land Grabbing in 2011, not one positive outcome could be found for local communities.''

In Gambella, the people complain that despite millions of dollars in investments by Karuturi, they have seen few jobs, schools, clinics or clean water facilities for their use. At the end of the day, the people of Gambella will be the ones suffering the long-term effects of deforestation (land clearance by burning), reduction of ecological diversity, loss of local species, and environmental contamination caused by herbicides and pesticides used in large-scale commercial farming. When fertile Gambella becomes a virtual desert, the multinationals will move to another oasis in Africa.

Karuturi needs to take off its rosy lenses and ask itself a few questions: How could it create jobs and business opportunities for local Ethiopians when it is outsourcing its landholdings to Indian farmers? How could it improve the agricultural expertise of those Ethiopians in the local area when it is bringing in foreign ''experts''? How could Ethiopia ever achieve food security and feed its explosively growing and food aid-dependent population when it is shipping out agricultural commodities on 600-ton tugboats under cover of darkness to feed the people of other nations? What will Karuturi do in the face of Ethiopia's spreading hunger, famine and uncontrolled population growth? Will it build larger dikes, walls, fences and levees to keep the people out of its corn filelds? Will the regime send its soldiers to protect Karuturi from the hungry and starving hordes of Ethiopians begging for a few ears of corn at Karuturi's gates?

There is a Better Way

Karuturi has the option of doing the right thing: Dump the current land acquisition and ownership deal and replace it with contract farming and deal directly with the farmers of Gambella (not Punjabi farmers). Karuturi (and other foreign investors) could provide the technology and capital, and the Ethiopians will be obligated to provide the land and labor. Karuturi could provide training to farmers in Gambella and enhance their ''expertise'' to make them more productive. Karuturi could supply grains and other agricultural commodities for the Ethiopian market profitably and over the long term maintain a sustainable and ecologically balanced agricultural venture. Is this too radical an idea or is it too old fashioned?

Rainbow Sign After the Flood?

It has been argued that regimes that seek out or fall prey to the big multinational land grabbers are dictatorships that exist on international charity and handouts and are thoroughly mired in corruption and debt. There is much talk these days about a ''second generation colonialism'' spearheaded by profit-hungry land grabbing multinationals. Some even talk about a ''green gold rush'' for fertile African land sold at fire sale prices by African dictators eager to line their pockets. These shameless moneygrubbing dictators will even agree to a deal that will export grain out of their countries as their population starves and they are panhandling the world for food handouts.

Truth be told, no one except a few of the top leaders of the ruling regime know the real deal in the land giveaway to Karuturi. Very little useful information is evident in the ''agreement'' made public with Karuturi. That ''agreement'' offers nothing more than the usual boilerplate full of meaningless legal mumbo jumbo routinely used for such ''leases'' by multinational land grabbers everywhere. For instance, the ''agreement'' alludes to environmental safety but provides no specific environmental standards to be followed. It talks about jobs, infrastructures and the rest but provides no specifics or details on the timetable for implementation or the scope of Karuturi's obligations.

Over a century and a half ago, far, far away from Karuturistan, a prophesy was told in the lyrics of a song of African slaves toiling on vast cotton and tobacco plantations in America. "God gave Noah the rainbow sign: No more water. The fire next time!" God has given the people of Ethiopia the rainbow sign: Unite and come together as one rainbow nation. For those who divide and misrule and sell and buy pieces of Ethiopia, the sign says: No more water!

* This article was originally published in:
http://open.salon.com/blog/almariam/2011/10/16/
karuturistan_ethiopia_the_fire_next_time