Flood destroys Karuturi’s first corn crop in Ethiopia

EthiopianReview.com | October 7th, 2011

EDITOR’S NOTE: This is a good news for the tens of thousands of Ethiopians whose land has been confiscated and given to Karturi, an Indian Company, to grow crops for export. The Karturi farm has no benefit for most Ethiopians. The profit from the farms goes in to the pockets of Meles Zenawi and members of his ruling junta.

By William Davison

ADDIS ABABAB 6 (Bloomberg) — Karuturi Global Ltd., the Indian food processor that earns most of its revenue abroad, said it will replant its corn crop in Ethiopia after a flood destroyed its first planned harvest in the country.

The damage was caused by flooding on the Baro and Alwero rivers in the western Gambella region, Sai Ramakrishna Karuturi, managing director of the Bangalore-based company, said in interview on Oct. 4 in Addis Ababa. A potential harvest of 60,000 metric tons of corn was lost after 12,000 hectares (29,653 acres) of land was flooded, he said.

“The waters started rising last Wednesday and have not stopped until Sunday,” he said. “Most of our maize is lost. We have taken a bit of a hit there.” The company said in a statement on Oct. 3 the loss was estimated at $15 million.

Karuturi, the world’s largest rose grower, in 2009 leased 100,000 hectares from Ethiopia’s government to grow sugar cane, palm oil, cereals and vegetables. The company may receive an additional 200,000 hectares if the government is satisfied with the first phase of the project, according to the Agriculture Ministry.

The project is “ahead of expectations” and will be completed by December 2013, and the government is “extremely satisfied” with progress, Karuturi said.

Ethiopia plans to transfer 3.3 million hectares of land to investors during a 5-year growth plan announced last year. About 350,000 hectares has been leased since Sept. 2009, according to the Agriculture Ministry’s website. The Oakland Institute, a U.S.-based research group, said in a report earlier this year that 3.6 million hectares has been rented by investors since early 2008.

‘Crazy Amount’

The flooding that breached specially built barriers near Karuturi’s plantations couldn’t have been predicted, Karuturi said. “This kind of flooding we haven’t seen before,” he said.

“This is a crazy amount of water.”

A second crop of as much as 15,000 hectares of corn will be planted when the waters recede and will be harvested around March, Karuturi said. A 200-hectare sugar cane nursery started by the company is expected to expand to 10,000 hectares before being sold in 2013, while 500,000 plants of palm oil will be ready after two years, he said.

To minimize transport costs, produce from Karuturi’s Gambella operations will be exported to South Sudan and other East African markets, rather than farther afield, Karuturi said. Crops will be paid for in dollars, bringing foreign exchange to the National Bank of Ethiopia, he said.

Two tug boats with the capacity to carry 600 tons each and which will transport crops along the Baro River that flows into South Sudan are expected to be operational within 18 months, Karuturi said. The company is forming partnerships with foreign companies to build rice and sugar processors on the farm, he said.

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