“Last year, Al Amoudi, whom most Ethiopians call the Sheikh, exported a million tons of rice, about seventy pounds for every Saudi citizen.” This is the remarkable claim of Frederick Kaufman in an article in Harper’s Magazine about the agro-investment of the Saudi billionaire in Ethiopia’s Gambela province.
Mr. Kaufman calls it “the great grain robbery” and alludes to the namesake event in 1972 when the Soviet Union appeared as a large buyer of US grains for its livestock program, bidding up prices to the ire of American consumers.
To put it into perspective: one pound of rice gives about five servings, so 70 pounds make 350 servings. Every Saudi eats a bowl of Ethiopian rice each day according to Mr. Kaufman!
Saudi Arabia imported 1.3 million tons of rice in the trade year 2013/14 according to the US Department of Agriculture and does not have domestic production. This would mean that Ethiopia accounted for the large majority of Saudi rice consumption. As rice constitutes 11 per cent of the calorie intake of Saudis according to the FAO it would also mean that Ethiopia has provided almost a tenth of Saudi Arabia’s dietary needs! An astonishing feat for a country that was the largest food aid recipients of the World Food Program (WFP) in 2012. If true, it would be alarming.
Alas, it does not show in the trade statistics. The PSD database of the US Department of Agriculture has no record of Ethiopian rice exports whatsoever. The COMTRADE based Trade Map database of the International Trade Center not really: In 2012 it reports Ethiopian rice sales of $4,000 to Saudi Arabia out of total exports of $5,000. That is virtually nothing.
Mr. Kaufman does not share the source for his 1 million ton claim. Unfortunately for him, almost three quarters of Saudi rice imports come from India and another 10 percent from Pakistan according to the Trade Map statistics. South Asia is where basmati rice is mainly grown, which the Saudis prefer over the sticky white rice that is grown in South-East Asia and the US. This preference is also why Al Amoudi has tried to introduce basmati cultivation in Ethiopia with the help of Pakistani experts and foremen.
Cereal yields in Ethiopia are around 2 tons per hectare according to the World Bank, on the higher end compared with most other African countries, but considerably below Thailand (3.1 tons) the US (5.9 tons) or Vietnam (5.5 tons). As Al Amoudi has just started his project and is introducing a new crop it is unlikely that he can produce very much above the national average. This would mean that the production of 1 million tons of rice in Ethiopia would require 500,000 hectares of land.
Al Amoudi has a lease for 10,000 hectares. Mr. Kaufman does not tell us from where Al Amoudi might have gotten the other 490,000 hectares. Not to mention that Al Amoudi has considerable production problems and it is unclear at this stage whether his project will succeed.
Mr. Kaufman also does not share with us how Al Amoudi managed to get 1 million tons of rice out of Gambela, a remote province with poor infrastructure and far away from any port. The Indian investor Karuturi who launched farming operations in Gambela as well and is now in serious economic trouble mulled exporting cereals with barges via South Sudan, a very unlikely scenario given the current civil war there. Mr. Kaufman himself describes dirt roads that start right after the airport in Gambela; he also speaks of “pilot rice paddies” without suggesting how one would be able to produce 1 million tons of rice with such limited operations.
In case it has not become clear by now: Mr. Kaufman’s central claim of 1 million tons of Ethiopian rice exports to Saudi Arabia is certifiably bogus. Harper’s does not seem to have a fact-checking department, which is rather surprising for a magazine of that size.
Mr. Kaufman says hat “the terms of the deal have never been released.” This is not exactly true as the lease agreement of September 2009 was posted on a website of the Ethiopian government before taken offline in 2012. For convenience I post it here.
For a 50-year lease of 10,000 ha of land Saudi Star pays 300,000 Ethiopian Birr annually. This is currently equivalent to just $15,321 and the contract does not even make stipulations for inflation adjustment. Al Amoudi has announced that he intends to lease an additional 290,000 ha from the Ethiopian government, but so far 10,000 hectares is what he’s got, to the best of my knowledge.
So with $1.53 per hectare the lease terms are even better than the $7 of Mr. Kaufman’s estimate and considerably lower than the $1,250 per year and hectare that he mentions for Zambia. Zambia is a more mature agricultural market with export outlets towards South Africa, so its land prices should be higher, but Mr. Kaufman is right to wonder how such lease terms come about and whether political backroom deals might have something to do with it.
He has apparently been in the country, if only for a few days, he has met with decision makers and he has visited Al Amoudi’s Saudi Star project. There have been indeed problems on the project as the killing of Pakistani foremen has shown and Ethiopia’s strategy of Agricultural Development Led Industrialization (ADLI) has been accompanied by grievances and state led resettlements as I point out in Oil for Food.
Mr. Kaufman had a unique chance to tell us something about such problems at the crossroads of subsistence lifestyles, development ambitions, foreign direct investment, political conflict and influence trading. Unfortunately he didn’t. He chose to make bogus claims and tell us a land grab story that is sexy and sells. After all Saudis are authoritarian, religious fanatics who do not let their women drive. Isn’t it perfectly logical to add a neo-colonial land grab to that list? And isn’t that what the reader wants to hear? Including unverified rumors about Mr. Al Amoudi’s alcohol intake, Al Qaeda financing and predatory attitudes of his men?
When reading the article one cannot escape the impression that this is neither a story about Al Amoudi, nor about disenfranchised Ethiopians, but about the author himself – an intrepid Indiana Jones who takes the reader by the hand on a journalistic hit and run mission to the dark heart of Africa. To beef up his credentials, Orientalisms are dropped and suggestive language is used without serving any obvious analytical purpose.
Based on a second hand account he refers to locals who live “in picturesque villages, undisturbed by modernity”, all the while Gambela is increasingly affected by a rather modern civil war in neighboring South Sudan. Corresponding refugee flows are shortly mentioned in a footnote. At no point one gets an idea about the local population and how it has been affected by the Saudi Star project. Mr. Kaufman has apparently not interacted with them. Meanwhile he suggests that the Saudi Star compound with its white barracks and satellite dishes seems to belong to a “Bond villain.” Our hero has to face down “fat black beetles” that attempt to crawl in his bed while spending the night there, remarkably on the invitation of the men of the very “Bond villain.” (It also would appear to me that the villains in Bond movies usually have more assuming residences than white barracks).
Al Amoudi was born in Ethiopia to an Ethiopian mother and a Saudi father and later migrated to Saudi Arabia where he made his money. To call him a “billionaire from Ethiopia” obscures more than it illuminates and it would have been interesting to learn more about Saudi-Ethiopian relations and what role Al Amoudi plays in them. Instead, we jump from Alexander the Great’s quest for the Nile sources to Ethiopia “the khat capital of the world”, only to end up again with Al Amoudi, who is termed a “whisky drinking marauder”, like all the folks of international organizations who hang out at the bar of the Sheraton in Addis, which he owns.
In short, another piece of sensationalist journalism and a disservice to a more sober and credible discussion about land grabs and associated development challenges.