, an Indian agribusiness, is touted to be "the world's largest producer and exporter of cut roses with operations spread across Ethiopia, Kenya and India.
In 2008, Karuturi "leased" 300,000 hectares in the western Ethiopia region of Gambella
The "lease" was ballyhooed as the stepping stone to Karuturi's rise to become one of the world's largest food producers.
rose ultimately proved to be the titan arum (corpse flower) of Gambella
When the Guardian newspaper did its eye opening report in 2011, it claimed Gambella
is about the size of Wales (the land of the mythical King Arthur and his
kingdom of Camelot) in the west of England.
is going to OWN so much of Gambella
for the next 99 years, I figured, in the interest of factual accuracy and to make official the change of ownership of the land, Gambella
should be renamed "Karuturistan".
sealed its deal with the ruling Thugtatorship of the Tigrean Peoples Liberation Front (T-TPLF), which touted the Karuturi deal as an example of the wholesome foreign investment being made in Ethiopia.
By 2011, the late T-TPLF leader, Meles Zenawi, was bloviating about how he
had found the magic bullet to make Ethiopia food secure.
Meles' secret weapon against the Black Horseman of the Apocalypse spreading famine across the land for decades was Karuturi
Meles boldly bragged "within five years Ethiopia will no longer need food aid."
Shortly after Meles rose to his
"throne" in 1991, he
would consider his
government a success if Ethiopians were able to eat three meals a day.
The "Congressional Budget Justification Foreign Operations Appendix 2 for Fiscal Year 2015" reports, "Ethiopia is among the poorest countries in the world, with an annual per capita Gross Domestic Product (GDP) of $471 and it remains one of the top recipients of U.S. food and emergency assistance to respond to chronic food insecurity and under-nutrition.
So much for "not needing food aid"!
There are too many unanswered questions about the 300 thousand hectare "lease" (it was literally a gift) to Karuturi
Frankly, my initial puzzlement over the Karuturi
"lease" was whether the sly, cunning and cagey T-TPLF operators had hoodwinked Karuturi into "investing" in Gambella?
Or could it be simple greed that blinded Karuturi
into getting in the Gambella
Nonetheless, with regards to what is known and unknown about land "leases" in Ethiopia including Karuturi's
, Dessalegn Rahmato
, an Ethiopian scholar, raised a number of very important issues in his
2011 article "LAND TO INVESTORS: Large-Scale Land Transfers in Ethiopia.
However, the circumstantial evidence garnered from various analyses and studies paint an incredible picture of apparent naivite, wishful thinking, greed, gullibility and manipulation on the part of Karuturi
When Karturi got its "leasehold" in Gambella
in 2008, it was as though it had been served Manna (divine food) from Heaven on a golden plate.
Karmjeet Sekhon, Karuturi's head in Ethiopia explained, "We never saw the land.
Sekhon's euphoria confirms the fact that the T-TPLF
delivered the crown jewels of the most fertile land in Ethiopia to Karuturi
for "very cheap" and let Karuturi do whatever it wanted with the land.
What is the logical thing one would do with a big winning lotto ticket in hand?!
There is circumstantial evidence to suggest that Karuturi
undertook some due diligence work after it was "given the land without seeing it.
(For my readers who may not be familiar, "due diligence" is a process by which a purchaser, lessor or prospective investor would undertake reasonable inquiry into the commercial potential of a business venture as part of a comprehensive appraisal of assets, liabilities, etc,.)
By late 2009, Karuturi began infrastructure improvements on its "leasehold" (gift) in Gambella.
To guard against catastrophic floods from the Baro River (known to the indigenous Anuak as Upeno River) with its tributaries, the Alwero and Jikawo Rivers, Karuturi
built dykes (to block the natural flow of the water) and undertook other construction activities.
business strategy from the beginning was to skate on the thrifty side of things.
It calculated it could import cheap agricultural equipment from India, but soon determined the Indian equipment was inappropriate for large scale commercial farming.
In 2010, Karuturi
placed orders with John Deere
, the American multinational agricultural equipment manufacturer.
apparently had not planned carefully enough in its due diligence for its skilled labor needs.
It became clear to the company by late 2009 that getting skilled personnel to manage the Gambella
project in a remote area with few modern amenities would prove to be exceedingly difficult.
To complicate matters, the technical help it imported from India did not have much experience managing large commercial agricultural enterprises.
These planning blunders soon became evident in increased costs, schedule delays, cost overruns and loss of revenue.
There were also problems training the unskilled labor from the local area in modern agricultural techniques.
The problems were piling up for Karuturi
By October 2011, Karuturi
learned its first lesson best expressed in the verse of Alexander Pope: " For Fools rush in where Angels fear to tread./ Distrustful Sense with modest Caution speaks;…/".
faced the "thundering Tyde" of the Baro (Upeno) River and its tributaries which overflowed their banks and submerged Karuturi's
80km long system of protective dikes.
In a flash, Karuturi
saw its corn harvest of 50 thousand metric tons flushed down river without a paddle.
Karuturi CEO Sai Ramakrishna Karuturi announced his company took a $15 million "hit" from the floods.
was dumbfounded by the intensity of the calamity: "This kind of flooding we haven't seen before.
This is a crazy amount of water.
The Baro River or Karuturi?
come down from his
high horse and talked to the local people, he
would have found out that most of the land he
wanted to develop was in a flood plain.
That is why the local people use it mostly for grazing and hunting.
So much for Karuturi's due diligence.
The 2011 floods were a bad omen for Karuturi
By April 2013, Karuturi
was convicted of tax evasion in Kenya in the amount of USD$11 million.
Devlin Kuyek of GRAIN, a non-profit organization that supports small farmers observed, "Not only are they fiscal cheats, but Karuturi has been accused of human rights abuses, poor labour practices, threats to the environment and so on… Even the World Bank Group did not grant Karuturi the political risk insurance it requested for its Ethiopian operations."
was under investigation "for criminal activities" by local Gambella
The land development plan and Karuturi's
farming practices were having visibly devastating environmental and demographic impact on the local flora and fauna.
Thousands of displaced villagers were complaining bitterly about loss of crops and grazing lands.
According to studies by the International Land Coalition
paid "Ethiopian farm labourers at its Bako (its other plantation to the northeast of Gambella) farm ETB 10 per day (US$ 0.50) which compares with about ETB 20 per day (US$ 1.00) for labourers on commercial sesame farms in the country.
Night guards for the company are said to be paid ETB 300 per month (US$ 15) if they own a gun and ETB 200 (US$ 10) per month if they do not.
had also imported several hundred farm laborers from India to work which proved to be flashpoint.
denied all allegations of abuse and misconduct in its Gambella
It denied any connection between his
company's activities and the T-TPLF's
characterized the accusations as "hogwash" and "a completely jaundiced western vision".
By January 2015, Karuturi
had apparently gone belly up.
The T-TPLF Director of Agricultural Investment and Land Administration Agency, Abera Mulat, was quoted by The Reporter as saying,"Karuturi has gone bankrupt following internal management crisis.
is known for borrowing from CBE, Dashen and Zemen banks
The loan extended to the company exceeds 170 million birr (in monopoly money) and the CEO said that his
company is set to settle the debts by the end of this month."
Land Con Game
land "lease" (gift) to Karuturi
reminds me of the land scams of the 1960s and 70s in the U.S., particularly in the State Florida.
I am still not sure if Karuturi
was a (willing) victim of a Florida-type land scam.
It is unimaginable to me how any company would invest so many millions of dollars in an area known to all to be a floodplain.
complete an environmental (including impact) study?
Didn't it talk to the local elders and people?
Maybe it did and arrogantly forged ahead full speed, damn th