Why big farms flopped in Ethiopia

THE PLAN was to transform farming in southern Ethiopia. Twelve years ago Fri-El, an Italian conglomerate, signed a lease with the state government for 30,000 hectares of farmland in South Omo to make palm oil. But the palms needed more water than the copper-coloured Omo river could supply and production was so disappointing that in 2011 its lease was cut by a third in size. Even a switch to cotton production did not help. Many bolls are left unpicked owing to labour shortages. A ginnery lies idle for want of electricity.

A decade ago rising food prices spurred investors to get land across Africa. In Ethiopia, where the government offered tax breaks, low rents and vast tracts of allegedly empty farmland, more was leased than almost anywhere else. One study calculated that around 1m hectares were allocated between 2005 and 2012; others suggested two or even three times that. The idea was that poor, remote places like South Omo, near Ethiopia’s south-western border, would become paragons of development. Mechanised cotton estates would feed Ethiopia’s burgeoning textile factories. Nomads would ditch their cattle for jobs as labourers on commercial farms.

Instead South Omo has become a cautionary tale. No cotton farm in the local area is operating anywhere near capacity, reckons Benedikt Kamski, who studies such matters for...

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