In order to help improve the Ethiopian agricultural development strategy, the government uses the method of a two-sector system one being the smallholder sector, the other being a continuous expansion investment sector. (Laver, 2012, p.108) Although multiple governing systems have come to power in Ethiopia, the current regime had taken over governing by the Tigrayan People’s Liberation Front (TPLF) with the intervention of military aid. The TPLF was an insurgency movement organized based on ethnicity along Maoist principles, which gave interest and priority to the labour and peasantry people in order to gain power and support. After gaining power at the national level, the TPLF formed a new government system called the Ethiopian Peoples’ Revolutionary Democratic Front (ERPDF). Although the EPRDF had claimed to be a government of democracy, there was insignificant hope for any other political party to oppose their governing system. (Laver, 2012)The TPLF government created the ‘Agricultural Development Led Industrialisation (ADLI) strategy since they believed that the majority of Ethiopian population solely depends on agriculture. The strategy claims to implement technologies which include irrigation, fertiliser and improved seeds which help improve yields, but do not remove people from the labour process of production, hence people believed that this method would insure food security and increase agricultural productivity. (MoFED, 2003) Besides such claims, the land was still state-owned similar to the previous Ethiopian governing system majority of the previous land policies were kept the same for the EPRDF government. The EPRDF government argued that allowing for the privately-owned pieces of land, would remove landholding elite and capitalist production as well as eliminate distress sales and the displacement of peasantry. (MoFED, 2003)
In the Ministry of Finance and Economic Development issues in 2002, under the heading Ethiopia : Sustainable development and poverty reduction program it mentions influenced by political interests. “First, for the EPRDF, which began as a peasant-based movement, the land policy, which claims to protect the peasantry from displacement, can be seen as a populist policy which appeals to the party’s political base. Second, by placing restrictions on land transactions, the land policy limits class differentiation within the peasantry and prevents the emergence of a class of large landholders who might translate economic power into political influence (Rahmato 2009). Third, by restricting land transfers, the land policy also limits the flow of migration, which the government believes to be the ‘source of economic, political and social instabilities’ ” (MoFED 2002, 56) Here it is clear that the EPRDF has taken into consideration various tactics and strategies in order to prevent the rise of any elite or powerful political movement. The government does this by limiting land transactions, through this land policies claim to limit class differentiation, prevent the emergence of large landholders and limit migration as it is seen as a social and economic imbalance.
Within Oromia Regional State, the Bako Tibe district which is located approximately 270 kilometers west of Addis Ababa, is a densely populated area with about 151 individuals per km
2 (ONRS, 2013). Regardless of the Bako Tibe district’s highly populated area, and sole dependence of residents on farmland, the government sold 11,700 hectares of land at an annual rate since 2008 (Shete et al, 2013). One of the main companies which were leasing out Oromia farming lands in large-scale quantities was the Karuturi Agro Products (PLC), in which they kept contracts that lasted generally for 45 years. (Shete et al, 2013). The Ethiopian government claimed that the Bako Plains were not inhabited nor in use by the Oromi residents, it was also identified as potential reservoir for a hydroelectric dam. Unlike government claims made, the Bako plains were indeed used by locals, in the article “Impacts of large-scale farming on local communities’ food security and income levels–Empirical evidence from Oromia Region, Ethiopia.” the authors Maru Shete and Marcel Rutten state
This area is generally used for production of teff (Eragrostis tef) and niger seed (Guizotia abyssinica) by the local people. The floodplain, which is mostly made up of vertisols, suffers from water logging and, it was being used for grazing animals. These areas were mainly used by the local population under a customary land–ownership system” (Shete & Rutten, 2013) The government’s decision to lease-out farmland to the Karuturi’s company is heavily based on the 1984 EEPCo survey, which disregards the land-use needs and frequency of local residents. Shete and Rutten state “Since the 1975 radical land reform, the de jure land tenure system throughout Ethiopia has been state ownership…Following the provisions of the Federal Democratic Republic of Ethiopia (FDRE)’s constitution that allow federated states in Ethiopia to develop their own land administration policy.” Here the authors describe the fact that locals have no say over the land ownership decisions, and that the policies can be manipulated as the government finds convenience.
The EPRDF government which claimed to develop improved land ownership regulations as compared to previous governments, often proclaims the establishment of a free-market system, and several adjustment measures. Shete and Rutten argue that the EPRDF government falsely claims to have adopted a fully free-market policy, however such claims are made to attract western donors. The transfer of land ownership and use from smallholder farmers to large companies such as Karuturi, creates significant negative impact on locals. (Berhanu and Poulton, 2014). The EPRDF did not completely follow the free-market policy is due to the fact that they have control over privatized businesses through endowment fund, controlled agricultural input supply and prohibited foreign investment in insurance and financial services (Shete and Rutten, 2013) With consideration to the fact that the nation’s economic success is majorly dependent on the agricultural sector
The Agricultural Development Led Industrialization (ADLI) system was endorsed in order to improve the productivity of smallholder family-operated farming methods by providing the locals with fertilizers, improved seeds and effective informational services. (MoFED, 2003) The authors Shete and Rutten (2013) state “Although the importance of attracting foreign capital into agriculture for lowland areas with irrigation potential was underscored by the ADLI well before the 2007/2008 renewed global interest in farmlands (MoFED, 2003, p. 52), the current wave of large-scale farmland transfer in Ethiopia is the outcome of a complex process of globalization and market liberalization. The country’s agricultural production has been dominated by smallholder farmers and, until recently, capitalist agriculture was almost non-existent” The authors explain that high emphasize the Ethiopian government has placed on large-scale farmland investment has created complex outcomes of globalization and market liberalization.