Credit: Dietmar Temps.
May 2013 - When Karuturi Global, one of the largest foreign holders of land in Ethiopia, sought to invest in palm oil and food crop production, it promised jobs and new infrastructure to the local communities. However, these promises are reported to have gone largely unfulfilled. The company pays a low rental rate to the government for the lands used, and many of the peasant farmers that occupied the land were not compensated for the land they lost.
As the global land rush has developed, Ethiopia has been popular among investors. In an effort to spur economic development, the government offers large parcels at low lease rates along with other incentives. In the meantime, the rural population is poor and at the mercy of drought, war, and inefficient agricultural production and marketing. About 30 percent of rural families have not been able to certify their land, and therefore lack secure land rights, and risk displacement without compensation.
Land in Ethiopia is the common property of the people and, if suitable land is available, the State may allocate small plots of land to farmers. The State can expropriate private property for public use, such as for a “better development project,” with payment of adequate compensation.
The government states that it allocates only unoccupied and underutilized land to investors, and that those living on allocated land are compensated. However, the government is not required to consult with a land user prior to taking it. Community commons and uncertified individually held land have proven especially vulnerable to uncompensated allocation to investors.
In mid-2012, the Ethiopian government temporarily suspended consideration of new land allocations. It did so because of concerns that many project developers were too slow in undertaking land development activities and apparently not due to any concerns of negative impacts on local communities.
Internationally recognized sets of principles, including the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security, offer sound guidelines for the promotion of agricultural investments that benefit investors, governments, and local communities. Putting these guidelines in effect would help ensure that large-scale investments in Ethiopia do not come at the expense of small-scale farmers.