Is Indian investment in Ethiopian farms a 'land grab?' (VIDEO)

When an Indian company invests hundreds of millions of dollars in Ethiopian commercial farming, is it boosting Ethiopia's food reserves and modernizing agricultural practices? Or is it grabbing land and displacing Ethiopia's poorest citizens?

The debate over Indian-owned Karuturi Global's investments in Ethiopia's Gambella region may sound extreme, but it is representative of the strong emotions one finds across the developing world about the subject of agricultural investment.

In Ethiopia – where critics are aghast at the government for inviting foreign capitalists to grow cash crops for export while millions still rely on handouts – the rancor is hindering much-needed constructive discussion on how to improve a sector of the economy that employs most of the population.

The worldwide trend is not in doubt. Globally, about 45 million hectares (111 million acres) of farmland were leased in 2009, compared with a previous average rate of 4 million hectares a year, the World Bank says. More than 70 percent of the deals were in Africa, most of them in Sudan, Mozambique, Liberia, Ethiopia, Nigeria and Madagascar.

The reasons are equally clear. It is estimated that global food production will have to increase 70 percent by 2050 to feed 9 billion mouths. One way to contribute to this is to cultivate under-utilized land – something which Africa has a relatively large stock of.

Ethiopia is a prime example of land availability, according to the government. The country has 74.3 million hectares of arable land, of which 12 million is cultivated. Another 3.5 million hectares has been earmarked for leasing and 350,000 hectares of large plots have been rented in the last two years, it says. The Oakland Institute, a research group, says the area leased is ten times the official figure.

1 | 2 | 3

Next