Large-scale land deals in Ethiopia: Scale, trends, features and outcomes to date



Large-scale land deals in Ethiopia: Scale, trends, features and outcomes to date
James Keeley, Wondwosen Michago Seide,
Abdurehman Eid and Admasu Lokaley Kidewa

Executive summary

The Ethiopian Government has leased at least one million hectares (ha) of land for
agricultural investments over the period 01 January 2005 to 31 August 2012. This
includes around 380,000 ha from the federal land bank, managed by the Ministry of
Agriculture; 335,000 ha by regional governments; and 335,000 ha for state-run
sugar plantations. Foreign investors, particularly Indian investors, are important; yet
most land acquisition is by domestic investors and, in the case of industrial crops, by
the Ethiopian state.

The Ethiopian Government has strategically promoted land deals for plantation
agriculture, as part of their five year Growth and Transformation Plan. This plan
envisages that Ethiopia will be food secure and a middle-income country by 2025.
Land deals, possibly in contrast to some other countries, are not primarily driven by
overseas interests.

Constitutionally, land is a regional responsibility. The federal government has taken
administrative control of large areas of land to facilitate investment, however, and
actively courted international and domestic investors. The federal land bank may be a
unique system for making land available to investors. Land is owned by the state and
the people in Ethiopia, rather than individuals or communities, making it easier for the
government to designate land as part of a land bank.

Land has been given out rapidly by regional governments, with limited scrutiny of
investors and, until recently, no environmental impact assessment. In many regions,
record-keeping of land investment has been poor. This is gradually changing, as the
federal government and regional land bureaux seek to verify land allocations, check
on investments and cancel leases where necessary.

Monitoring and evaluation of land deals remains a major challenge, given the size of
many regions, the remoteness of investment locations and lack of staff and vehicles.
Only a small amount of allocated land has been developed. This is due to a lack of
roads, bridges, power and other infrastructure in investment areas; high costs of land
development; poor technical and financial capacity of investors; the security situation
in some regions; and deliberate abuse of land investment licenses or land lease
agreements. Land rental prices are low – as little as US$ 2 per ha, per annum in
some regions – and in some cases, land has been taken for speculative purposes or
to take advantage of tax and financial privileges.

Some land leases are very large: eight are over 25,000 ha and one is 100,000 ha.
Some government officials suggest that these sizes are unmanageable and that
10,000 ha would be a more realistic upper size limit. They also suggest that land
should be given out in blocks of 5,000 ha, with extensions only permitted where land
has been developed effectively.

Most land has been allocated in developing regional states (Benishangul-Gumuz
and Gambella), or lowland parts of SNNPR. These areas have not previously been
intensively cultivated and are either part of shifting cultivation, or agro-pastoralist
systems (Benishangul-Gumuz and Gambella), or are part of pastoralist rangeland
systems (SNNPR).

Land allocations in some lowland areas have the potential to significantly undermine
pastoralist systems, as access to important water resources is lost. This erodes the
viability of rangelands, where herders need to move across large areas to take
advantage of spatial and temporal variability in the availability of resources.
The degree to which land is vacant is overstated by some officials. There should be
clear acknowledgement and adequate compensation when targeted lands are part
of shifting cultivation or pastoralist systems. In many cases, where relations with
communities are difficult because of loss of land, they could be improved at the
margins if access to water points or off-season grazing were given attention by
investors. When investors are assessed, priority should be given to those with clear
plans for the delivery of services such as clinics, schools and training programmes for
local communities. Adherence to these commitments should be part of monitoring
processes. At present, however, the government is more focused on ensuring that
investors develop land as agreed than on monitoring wider investments in the

More studies are needed to establish the economic returns of large-scale land deals
for plantation agriculture, compared to other land use systems. It is possible that
pastoralism may generate better economic returns than large-scale commercial
farms in some dryland areas. It may be more difficult, however, for the state to take a
share of pastoralist revenue flows, compared to income from large farms.
Land deals promise to contribute to improved food security, through the generation
of foreign exchange; improved incomes as a result of on- and off-farm employment
created by investment projects; and food production that is marketed within Ethiopia.
If people directly lose their land without compensation or adequate resettlement,
including access to productive resources, however, they will likely be worse off and
more food insecure. Where there is a loss of access to resources that are important
parts of livelihood systems and coping mechanisms, such as forests, rangelands,
and water resources, there are clear risks of pockets of greater food insecurity at the
local level. These local-level impacts are not currently well documented for Ethiopia,
partly due to the political sensitivities of carrying out this kind of research in many key
land investment areas.

On paper, land deals in Ethiopia promise to create significant amounts of
employment. Lack of implementation means that job creation has not lived up to
expectations, however, although this may change if investments are fully
operationalised. For a limited number of investments, substantial numbers of jobs
have been created. In developing regions, these are often taken by workers from
outside the regions, rather than ethnic groups from within the region. This has contributed to conflict in some instances, and needs to be better addressed through quotas and training programmes. The cultural difference between a pastoralist lifestyle and wage labour employment on a plantation should not be underestimated,
however; the change in identity required may well be resisted by many pastoralists.
As with other aspects of land deals, creation of clear baseline information, in this
case on employment and livelihoods in targeted areas, would allow for monitoring of
performance over time.

Sharing of information about regulations, land allocations and investors could be
improved, particularly between federal and regional governments, and between the
government and the public. Senior regional officials and even technical experts were
in some cases unclear about the identity of major investors, and the size or location of
land allocated by the federal government. Within regions, a lack of clarity about land leasing
regulations and the roles of regional and federal government was evident.
The government has made federal land agreements available on the Ministry of
Agriculture website. More information could be made available, however, such as
maps showing the exact areas for land leases; business plans related to
investments; environmental impact assessments; and monitoring reports on the
progress of different investments.

Data collection processes by government need support. For example,
documentation of which crops are being grown, on job creation, and on
infrastructure expenditure and other aspects of investment.
There are reasons to be concerned about the environmental impacts of land deals, in
terms of the loss of forest resources, erosion of shallow soils, overuse of
agrochemicals and changes in water use and salinisation. Clear environmental
baselines need to be established, to allow for meaningful assessment over time.

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Large Scale LandGrab - 12575IIED.pdf (1.2 MB)