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Ethiopia Targets Land For Commercial Farms

Ethiopia plans to offer three million hectares of land over the next two years for investors to develop large-scale commercial farms, a government official said Nov. 5.

Countries in Asia and the Gulf – such as China, India and Saudi Arabia – have rushed to buy farmland abroad to grow crops for their own people after food price inflation last year highlighted the need for greater food security. Africa has become a prime target, despite concerns about the impact on the world’s poorest people, and locals nicknaming the practice “land-grabbing.”

“We will make three million hectares available for investment in the next two years,” Esayas Kebede, director of the government’s Agricultural Investment Agency told Reuters. “This is land around the country that is not currently used and could be used to produce coffee, cotton, sesame, sugar cane, tea, palm oil and flowers.”

The agency has already parcelled off two million hectares and is negotiating a further one million hectares from regional authorities in the huge country.

Analysts point to massive potential profits in farmland investments as global population grows and climate change chokes off supplies of arable land. Esayas said Ethiopia could offer investors a wide range of climatic conditions, unlimited water resources and quickly developing infrastructure. The government offers incentives to both foreign and Ethiopian investors, including tax holidays depending on export levels, duty-free import of capital goods and grace periods of up to five years on land rents.

INDIAN INVESTORS

The majority of investor inquiries are from India but there are also Chinese, European and Middle Eastern firms operating in Ethiopia, Esayas said.

Development organizations have expressed concerns about the erosion of local farmers’ rights by foreign investments in developing countries. Ethiopia is still desperately poor and this year appealed for food aid for 6.2 million people.

But Esayas said investment could be used to fight hunger and poverty.

“We have 74.5 million hectares of cultivable land of which only about 15 million is cultivated by small-scale farmers,” he said. “When we give land to investors they create jobs, they develop our technology and they bring foreign currency.”

French Competition Body Backs Dairy Contracts

PARIS/REUTERS

Supply contracts between dairy farmers and manufacturers would be the most effective response to price volatility affecting the dairy sector, France’s competition authority said Nov. 2.

The body’s recommendation was in line with the position of Agriculture Minister Bruno Le Maire who has been calling for such contracts in a sector where falling prices have sparked a wave of protests by European farmers this year.

The competition watchdog also came out in favour of two other proposals floated by Le Maire, the creation of a European dairy futures market and a change to rules governing the European dairy market to allow producers to organize themselves.

“Contracts over several years, defining volumes, prices – and the conditions for their medium-term evolution –, and quality aspects, should allow the visibility necessary for producers and also processors,” the authority said in a summary of an opinion requested by a French Senate committee.

To have adequate negotiating power, French producers would need to form co-operatives or marketing associations to conduct talks with industrial customers, backed by a change to European Union dairy rules, the watchdog suggested.

Contracts would also represent a successor to a previous system of price recommendations made by dairy sector body CNIEL and which was declared contrary to competition rules by another watchdog in 2008.

CNIEL, which represents both producers and processors, has since modified its price role to publish price indicators rather than recommendations, but the competition authority said this was also likely to fall foul of European rules.

The French government is planning to establish the principle of dairy supply contracts in legislation next year, and is also pushing for the EU to adopt further measures after short-term aid was approved at a European council last month.

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