By Mohammad Amir Anwar, University of Johannesburg
The African country helping India feed 1.2 billion people
The global food price crises between 2008 and 2009 led countries that bore the brunt of the catastrophe to look elsewhere for agricultural land to mitigate the effects.
In 2008 prices of some foods, including wheat, soared by 130% in a single year and the United Nation’s Food and Agriculture Organisation’s food price index shot up 40%.
The result was a frenzied scramble that saw countries acquire an estimated 40 million hectares of land in foreign countries, most of it in Africa.
There is a strong sense that land deals in Ethiopia have benefited both the foreign investors and domestic private capitalists with close ties to the ruling party
A great deal of attention has been paid to the role of the US, the largest investor in land in the world, China and Middle Eastern countries. Much less attention has been given to the role of India. A global land monitoring initiative, Land Matrix, ranks India as one of the top 10 investors in land abroad. It is the biggest investor in land in Ethiopia, with Indian companies accounting for almost 70% the land acquired by foreigners after 2008.
Indian land deals in Ethiopia are the result of the strong convergence in the two countries’ domestic political-economic policies. Both advocate the privatisation of public assets and increasing reliance on free trade and open markets.
India’s investment in land has been driven by the need to obviate the effects of spiralling food prices by outsourcing food supply. Ethiopia’s decisions are driven by its development policy based on commercialisation of agriculture and reliance on foreign investments.
Rough estimates suggest Indian firms have acquired roughly 600 000 hectares of land in Ethiopia. This is more than ten times the size of land acquired by firms in India under the country’s special economic zones policy. India is followed closely by Saudi Arabian firms, with 500 000 hectares of land, in Ethiopia.