Last August, Ojulu sat smoking a cigarette outside his thatch-roofed hut in Pino village when a rising tide of water seeped through the reed fence. “The water came in the morning,” Ojulu said, “And stayed for a month.”

As Ojulu and his neighbours scrambled to higher ground the Baro river swirled through the village, gathering in force until it breached a series of dykes, built by Bangalore-based Karuturi Global, and swamped the company’s vast 100,000-hectare farm. “Karuturi blocked the natural route of the water [with the dyke], so the water came into our village,” Ojulu said. “Karuturi was the cause of the flood.”

Karuturi contested this account. The Ethiopian government says an investigation into the causes of the deluge is underway, but the flood threatens to sink a headline agricultural project that supporters see as the path to a modern, food-sufficient Ethiopia, but detractors characterise as an exploitative, neo-colonial land-grab.

In January 2008, Karuturi Global was trading at Rs. 39 on the NSE; the company had a flourishing floriculture business headquartered out of Kenya and hoped to use their land in Gambella to become one of the largest food producers in the world. This Friday, the stock closed at Rs. 3.15. The company is saddled with Rs. 753 crore of debt and re-scheduled a $55 million foreign currency bond at a time when global financial markets have tightened and European flower demand has contracted.

Karuturi’s defence

In recent years, the Ethiopian government has announced its intention to lease millions of hectares of land for export-oriented commercial plantations. Indian companies like Karuturi and Shapoorji Pallonji responded by committing to invest $4.4 billion in Ethiopia, with 40 percent earmarked for agriculture.

Karuturi’s farm is a rectangular strip of land along the floodplain of the Baro river near the South Sudan border. In 2011, a flash flood destroyed Karuturi’s first crop and caused Rs. 39 crores of damage and Rs. 70 crore in lost revenue, according to the company’s financial reports. The company responded by building dykes that allegedly diverted floodwaters into nearby villages, including Ojulu’s.

“Eighty per cent of land in our concession is a flood plain. There is little data available of past flooding and rainfall,” said Ram Karuturi, Karuturi Global’s Chairman, adding the company was developing a flood-management plan and was growing a large crop of flood-resistant jute this year. Mr. Karuturi said the company was concerned about the cascading effects of the dykes on neighbouring villages, but said an investigation by the Ministry of Water Resources proved the company was not responsible for the flood.

The persistent inundation has stymied Karuturi’s ambitious plans of clearing and developing the entire 100,000-hectare plot in two years, as stipulated by the contract signed with the government. In January 2012, the company claimed it would cultivate nearly 60,000 ha of land over two seasons, but ultimately planted corn on only 5000 ha of land, or 5 per cent of their lease area. The limited harvest translated into limited revenues, further hobbling the project.

Two months ago, 92 Ethiopian workers filed a complaint with the Department of Labour and Social Welfare. “Workers complained their salaries were delayed by up to 20 days and said the company did not provide identity cards, safety equipment, medical treatment or proper residence,” said Labour Inspector Beyane Assefa.

The department found workers living in cramped metal shacks without proper ventilation and is investigating allegations that employee pensions deducted from workers salaries by the company were not deposited with the relevant government department.

“I think we live in a prison,” said a Karuturi machine operator, who said that the Indian management was disrespectful to Ethiopian staff. After investing almost Rs. 1000 crore in the project, with Rs. 270 crore spent on farm equipment alone, workers said the company was so short of cash that they didn’t have diesel for their tractors. Instead of developing their own lands, workers said, the company was leasing out their equipment to other investors in Gambella.

Mr. Karuturi said Ethiopian operations had been temporarily short of working capital due to a management transition that was now complete. Any administrative lapses concerning worker safety would be immediately rectified, he said.

The company has also fallen foul of the local administration over Karuturi’s federal contract. In 2008, the company was originally granted 300,000 hectare by the regional government. Two years later, the federal government —citing a change in land policy — revised the contract to 100,000 ha for 50 years. Karuturi pays 20 Birr (Rs. 60) per hectare per year as land tax, the same rate as a subsistence farmer, while newer investors pay 111 Birr per hectare. A dispute over the land demarcation and federal tax holiday, officials claim, means the company has not paid any land tax at all for two years.

“We are in deficit… The big tax source in this woreda (administrative centre) is land tax,” said Oman Olay, a local administrator, explaining that the tax dispute with Karuturi has severely affected their budget, adding “the big problem is shortage of salaries, even capital to maintain schools is a big challenge.”

Mr. Oman said that Karuturi had promised to send local children to Nairobi to further their studies, to build a school, and to donate 500 quintals of grain to the community flooded by their dykes, but did not fulfill their promises. The company has, however, provided a generator and fuel to the local school.

Mr. Karuturi said the company paid its tax every year during the contractually agreed period. The local administration had asked for its tax early this year to tide over a deficit, a request the company could not meet. The federal government, by contrast, has supported Karuturi in its tax dispute.

“Karuturi is one of the pioneers of investment in Gambella, or even the nation. If they have any challenge, our ministries are there to resolve whatever problems they may have,” said Shiferaw Teklemariam, Ethiopia’s Minister of Federal Affairs.

'Villagisation' and the rights question

The Ethiopian government’s unstinting support for Karuturi has both helped and hindered the project. Rights groups like Human Rights Watch (HRW) and the Oakland Institute have attacked Karuturi as the most visible symbol of a violent government campaign to move 45,000 rural households into consolidated communes and to lease these lands to commercial farmers like Karuturi.

The Ethiopian government has denied any link between commercial agriculture and the “Commune Centre Development Plan”, or ‘villagisation’. Government officials say the region has amongst the lowest population densities in the country, and the commercial farms are on empty land. No villages have been displaced to make way for Mr. Karuturi’s farm and the company is not involved in any land grab.

Shiferaw Teklemariam, Ethiopia’s Minister of Federal Affairs said villagisation would provide schools, clinics and drinking water to Gambella’s population of shifting agriculturalists and pastoralists by relocating them into fixed settlements.

Approximately 35,000 households have been villagised thus far. A visit to sites around Gambella revealed villages struggling with makeshift infrastructure. Most settlements had at least one tube well and some sort of school or clinic, but were unable to farm as the land provided by the government was thickly forested and hence uncultivable. Villagers note that the ‘empty land’ given to investors is vital for a community that relies on forests and grasslands for grazing animals, hunting and foraging.

There was no overt violence in the process, villagers said, but local officials sometimes intimidated them. Some said they moved because they heard reports of violence elsewhere.

“Nobody fears the government, what the government says is to the advantage of all,” said an old woman obliquely, as if explaining the nature of power in a patriarchal society, “Since the government is like a father, you can accept whatever he says.”

The villagisation process seems less a corporate conspiracy, and more a state-building project. “Most states…are younger than the societies they purport to administer,” notes anthropologist James Scott in Seeing like a state. “States therefore confront patterns of settlement, social-relations and production… that have evolved largely independent of state plans.”

The state’s tendency is to recast these myriad patterns of life into a static legible population that can be educated, immunized and deployed into the formal economy in the guise of development.

Yet, Gambella’s geography and proximity to Sudanese borders and the migratory arcs of itinerant pastoralists restrict the ambitions of both state and capital. On an overcast day this month, the scrublands not far from the river shook with the sudden appearance of a band of Bororo Fulani cattle herders from Sudan fleeing both Murle cattle raiders from South Sudan and federal soldiers from Ethiopia.

“We travel in search of pasture for our cattle,” said Ali Barka Hassan, “When the flood comes in Gambella, we return to our lands in Sudan.” Ultimately everyone must set their clock by the river — the farmer, the herder, the soldier, and commercial investors like Karuturi.

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