In August 2008, a middle-aged Punjabi gentleman named Harpdeep Singh Chadha arrived in Ethiopia to set up his family-owned business’s most recent endeavour: a 100,000 hectare sugarcane project that would dovetail into the Rs. 10,000 crore Chadha Group’s interests in sugar and liquor.
At the time, Mr. Chadha told local journalists that his company would start operations by flying in 4,500 farmers from Punjab to plant sugarcane across 10,000 hectares in West Shoa in the Oromia Region. Fifteen months on, he hoped to build a sugar mill, a paper plant and a school and clinic for his workers.
The Chadhas left Ethiopia in 2009, without seeing through a single sugarcane harvest. Last month, Mr. Chadha perished in a hail of gunfire during a shootout that also claimed the life of his brother, Gurdeep “Ponty” Chadha.
Officials and local businessmen in Ethiopia remember the Chadha project as a controversial one that played a not insignificant role in shaping Ethiopia’s evolving policy of leasing out vast tracts of land for commercial agriculture. The Chadha Group, now renamed the Wave Group, did not respond to an emailed questionnaire.
When the Chadhas arrived in Ethiopia, the government had embarked on an ambitious plan of agriculture led industrial growth by attracting foreign direct investment in commercial agriculture.
“Ninety per cent of our value added export products come from agriculture,” said Wondirad Mandefro, Ethiopian State Minister for Agriculture in a press conference last week, “The main focus of FDI is towards high value commodities towards industrial production which requires size and quality. We have identified four major value chains — cotton, sugar, palm and rubber.”
A number of Indian firms like Emami Biotech, Shapoorji Pallonji and Karuturi acquired large tracts of land. The Karuturi deal proved particularly controversial as the company was initially awarded 3,00,000 hectares on a 99-year lease; the deal was subsequently renegotiated.
“They were very gung-ho about setting up a project in Ethiopia. They had gone around, looked at some land and made an announcement that they were investing in a sugar plant and sugarcane cultivation,” said an Indian official familiar with the details, “but then they said they had some problems.”
As the first tract of land allotted to the Chadhas proved to be inaccessible, fresh land was reassigned and the Chadhas began work. A local businessman recollected being called for a low-key inauguration ceremony, but noted that the Chadhas did not join the Indian Business Forum that facilitates the entry of Indian businesses in Ethiopia. Indian companies are the second largest private investors in Ethiopia with an approved investment of almost $ 5 billion.
“Subsequently, it was found that the [new] land belonged to a nearby public [government owned] sugar factory and they were dispossessed of that land,” the official said. By the end of 2009, the Chadhas had had enough and walked away from the project. Ethiopian officials refused to comment on the specifics of the deal, except to note that there were some “problems.”
Land acquisition policy
In 2011, a report published by the Oakland Institute speculated that the scale of the Karuturi land deal had convinced the federal government to streamline land acquisition policy and clearly demarcate the powers of federal and regional authorities to apportion land. Officials said the Chadha fiasco, in which government land was handed over to a private company, may have also played a role in convincing the federal government to play a more active role in land acquisition.
Yet the Chadhas’ declared aim of bringing 4,500 farm labourers from India proved even more controversial. More than 80 per cent of Ethiopians live in the countryside and depend on agriculture for a living. Indian officials advised the company that bringing in foreign labour would be unwise. “It is not our purpose to move in labour, but simply to bring in management from India to invest in labour intensive areas,” explained an Indian embassy official.
For a time, the Indian business papers and Punjabi websites frequently carried reports of farmers from Punjab seeking land across Africa, including Ethiopia. The Ethiopians eventually nipped the move in the bud.
“We have a clear labour policy in Ethiopia and it all depends on the local labour force, unless the company actually needs labour that is highly qualified and is not available locally,” said Minister Wondirad. He refused to comment on any specific company, but said all reports of Indian labourers coming to Ethiopia were false. “The news that you have mentioned is one incident, which is wrong news,” he said.
This article has been corrected for a factual error.