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Karturi to Outsource Ethiopian Land to Indian Farmers

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Indian company Karturi Global, known for its cut flower exports, has leased 300,000 hectares of farmland in Western Ethiopia and plans to outsource 17 percent of the land to Indian farmers and agribusinesses. This new revenue-sharing scheme will give 35 percent of the new profits to Indian farmers and agribusinesses. This land grab is part of a larger trend of foreign investors taking land away from local small farmers.




By Raghuvir Badrinath

Business Standard

October 12, 2011



Karuturi Global, the city-based publicly-held floriculture major and one of the world’s largest exporter of roses which is aggressively rolling out an agriculture business venture in Ethiopia, is looking at outsourcing 20,000 hectares of farm land in the African nation to Indian farmers on a revenue-sharing basis.

The company has leased 300,000 hectares in Gambela, in the western corner of Ethiopia. It has been looking to develop a bouquet of crops such as paddy, maize, cereals, palm oil, and sugarcane, among others, to cater to the huge demand in Africa and also look at the export market. According to senior officials of Karuturi, they have taken possession of 100,000 hectares, and after the completion of this, they will be able to take possession of another 200,000 hectares.

We have got a decent response. We intend to give land and the necessary infrastructure to farmers who have the expertise in specific crop cultivation and get into a revenue share (65:35) with them. We hope to have agreements reached for around 20,000 hectares in the near future as part of the first phase,” a senior company official told Business Standard.

The first phase will be over by the end of this financial year. As part of its expansion plans in this sector, Karuturi had earlier this year held discussions with farmers from Punjab interested in this venture.

For the second phase, Karuturi is understood to have initiated discussions with some farmers in South India and a few agri-commodity majors. It hopes to outsource as much as 50,000 hectares over a period of time.

Karuturi Global, which reported a topline of close to Rs 700 crore during last financial year, derives as much as 90 per cent of its revenues from the floriculture business. The company hopes to get 35 per cent of its revenues from the agriculture business in the next couple of years.

The company had recently taken a hit of around $15 million after flash floods in Ethiopia destroyed maize crop sown over 12,000 hectares. To prevent such setback, Karuturi has hired WAPCOS limited, a public sector enterprise, to provide consultancy services for undertaking flood control measures besides designing irrigation and drainage systems.

WaterWatch, a Dutch advisory firm, has also been in engaged in authenticating the irrigation, drainage and flood control work of Karuturi.


 

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