Profitable Investment In Ethiopia

Profitable Investment In Ethiopia – Reports from Ethiopia, where a tycoon has planted a huge rice farm in soil polluted by years of conflict

As an orchestra of mosquitoes and crickets greeted the dusk, Bedlu Abera looked across the rice paddies that stretched across the Ethiopian plains toward the horizon. A flash of satisfaction crossed his face. “It’s satisfactory,” he said. “We’re making progress.”

Profitable Investment In Ethiopia

Mr. Bedlu oversaw Saudi Star Agricultural Development’s first major harvest. Every few minutes he answered a raspy question over the walkie-talkie. The work of their farmers was essential. The soil here is almost too fertile. It must be quickly cleared and replanted before the rains return.

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Deepening darkness obscured the orange flame far beyond the perimeter of the farm. The hunter fired to send prey fleeing from the undergrowth into his traps. Closer, next to the irrigation canal, a harvester was parked, resting after the day in the rice fields.

This remote location is the border in a land dispute that stretches from Myanmar to Saskatchewan. Investors are betting billions on an asset that is more plentiful and in demand than any other. The struggle taking place on the Ethiopian plains is a fleeting glimpse of others to come in a crowded and heated world.

Mr. Bedlu in the picture is 40 years old, stocky and pensive. He wore high-heeled boots and a wrinkled goatee. In 2014, he took over the management of agricultural operations for Saudi Star. He rose above the odds, but it was hard to trade the pleasant warmth of his home in the Dutch capital, Addis Ababa, for the humidity of the lowlands. His family has not yet joined him.

Saudi Star’s owner, Saudi-Ethiopian tycoon Mohammed al-Amoudi, spent more than $200 million to transform the forest into a farm the size of 20,000 football fields. This puts the Sheikh, as he is known, at the forefront of the global land rush.

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As people from better-off countries move to cities in ever-increasing numbers, the gap between how much they produce and how much they eat widens. The agricultural trade has long filled this gap. But the price shock of 2007, when staple crop prices doubled in a matter of months, showed that global food markets could collapse. Then the financial crisis created a demand for investments that are not tied to volatile stocks and bonds. Governments, multinational corporations and institutional funds began to pour millions, then billions into the land of other countries.

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From Southeast Asia to Latin America and sub-Saharan Africa, investors seek to make money not just by trading the fruits of the earth—rice and coffee, oil and gold—but by controlling the land itself.

Few countries have attracted as much attention from land seekers as Ethiopia. The famine-stricken nation now envisions massive commercial farms pumping food across the region. But for thousands of years the land has been the source of great progress and bloodshed. The Saudi Star piece of land is no different.

Back at the cabin that houses his office after sunset, Mr. Bedlu squeezed a few grains of rice from the farm into his palm. Saudi Star agronomists bred Indian and Pakistani seeds into 62 varieties, testing each for fertility, hardiness and taste. Mr. Bedlu was happy to talk about his three pets. Two of them, Midroc 1 and Midroc 7, are named after the al-Amoudi conglomerate, the latest addition to a business empire that stretches from Swedish oil refineries to Saudi defense contracts and has brought him what Forbes estimates is a fortune. 8.5 billion. The third, Gambella 1, was named after the poor landscape in which the Sheikh sowed his grain.

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Some versions are created for the domestic market. Others are blended to suit the tastes of rich Red Sea rice eaters. The price crisis exposed the vulnerability of countries that import what they eat, especially Saudi Arabia. It is said that Saudi Star was born after Mr. al-Amoudi presented a sack of Ethiopian rice to King Abdullah. Impressed by its quality, the monarch blessed the sheikh’s project of a large farm across the sea.

In 2009, Saudi Star leased 10,000 hectares in Gambella for 50 years. He later added another 4,000 acres when he bought the neighboring state farm. But the project had problems at first. The location is remote, most of the roads are dirt, and the locals are skeptical, even hostile.

Saudi Star was one of the most prominent projects of the investment campaign, in which the Ethiopian government leased 2.5 million hectares, an area slightly smaller than Belgium. The offer is again more than the same. The government’s goal was to introduce modern agricultural technology to generate exports that would solve a serious trade balance problem and, some say, consolidate the ruling elite’s control over the fertile plains.

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Bedlu, who studied plant science at a university in Egypt, blamed the farm’s teething problems on mistakes by inexperienced managers and consultants. He was part of the team that al-Amoudi installed in 2014. He brings experience in large-scale commercial agriculture and seeks to improve community relations. The team of 4,000 employees includes 1,300 locations: 300 with permanent contracts and 1,000 seasonal workers.

Temesgen Desew, a lanky 23-year-old from a nearby town, had already risen to the position of farm supervisor. He joked that he wanted Mr. Bedlu one day. When asked if his father, who grows corn on the family property, used a combine harvester, Temesgen’s eyes widened. “No, no,” he said. “Ox.”

Education in Gambella is basic for most, so local employees are trained from scratch. In a rice processing plant housed in a huge hangar rising from the undergrowth, a Pakistani technician boasted of the skills he passed on to his local subordinates. “It’s hard,” he admitted, his smile unwavering. “There are 86 languages in this country.”

Mr. Bedlu was learning the language of the Anuak, the main ethnic group in the region, one of the two largest in Gambella. Their livelihood is rooted in agriculture and some have found work at Saudi Star. But armed guards on the perimeter were reminiscent of what happened on April 28, 2012, when decades of planjak discontent erupted on the sheikh’s farm.

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A group of armed assailants, widely believed to be Anuak fighters, opened fire on the company’s property. At least five employees were killed before fleeing. Reprisals followed. According to Human Rights Watch, the army surrounded the villagers, beat the men and raped the women.

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The attack served as a lesson for the new masters of the land, whether in Gambella or Brazil, Madagascar or Scotland. They can come with the promise of jobs, technology and progress. But the country is like a lion roaming around Saudi Star Farm: it is hard to tame.

From the air, most of Ethiopia looks like a vast patchwork of small plots, each a slightly different shade of ocher or green.

This is a nation of small farmers: 85% of the workforce is in agriculture and 95% of all agricultural production comes from small farms, often the size of a few football fields.

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Of this, a total of 80% is consumed by the families who produce it; only 20 percent sold. These farmers rely on their bare hands, a few basic tools and erratic rainfall.

Only 5 percent of agricultural production comes from commercial farms. But they form an important platform in the government’s strategy to complete the journey from hunger to prosperity by mid-century.

Hundreds of thousands of Ethiopians starved to death due to intermittent famine. In November, the UN announced that another 8 million were at risk. However, a country once synonymous with scarcity has found its arrogance. Official figures in this country of 97 million people show more than a decade of double-digit growth, with strong exports of coffee, livestock and cut flowers.

Some analysts question the numbers, especially when accompanied by warnings of famine. But there is also physical evidence of progress: new paved roads, telecommunications infrastructure, dams – and Barack Obama, who last July became the first US president to visit Ethiopia. The country is a self-proclaimed “developing country”: a country like China, Singapore or Rwanda, where an authoritarian government sets a strict economic course.

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The ruling Ethiopian People’s Revolutionary Democratic Front took power when it overthrew communist rule in 1991. Under the rule of the Hhlanders, as those of central and northern Ethiopia are known, she founded

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