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Minister of Trade and Industry (MoTI) Girma Birru
last week concluded a three-day visit to export
farms in the Oromia Regional State, where he was
told by horticulturalists – who grow flowers and
berries – that the industry needs more land to
expand.
In a trip that concluded on Monday December 17,
2007, Girma toured five farms, including Luna
Fruits, Almeta Impex, Ethio Vege and Ilantot and the
Wine and Strawberry Farm, which are located between
Modjo and Koka in Oromia.
Most of the developers engaged in horticulture farms
in these localities have faced difficulties
expanding as local farmers request greater
compensation for their land, while some flower farms
simply cannot find any land in close proximity to
their existing plots.
Almeta, which has a 90hc flower farm and also
produces table grapes and strawberries, was one of
the companies that requested a plot of land in
another area.
“Although we know the scarcity of plots in the area,
since the company is expanding its market, it has
requested land for expansion purposes somewhere else
where abundant land is available,” said a source at
Almeta who declined to be identified.
Ilantot Plc, an Israeli-owned horticulturalist, is
instead facing the possibility of paying higher
compensation to the farmers in the area for its
expansion.
Ilantot has developed 20hc of land with an
investment of 11.2 million Br to produce
strawberries for export market. Encouraged by the
good return from the market, Ilantot requested an
extra 20hc of land on December 21, 2005. However,
due to the rising cost of compensating the farmers,
it has been unable to carry out its plan.
When farmers are displaced, the government resettles
them elsewhere and provides new land, but the flower
farms are expected to pay an extra compensation
equivalent to one year of harvest. Ilantot
originally intended to pay farmers in the area 250
Br per quintal of teff that they can produce
on their land. However, with the price of teff,
the company is now expected to pay compensation
ranging from 450 Br to 500 Br per quintal, too high
a price for Ilantot, sources disclosed.
Tempted by the growing international market, the
Ethiopian government has handed out over 400,000hc
of land for the development of fruits and vegetable.
It has also privatized one state-owned enterprise:
Zeway. Sher Company now grows flower on part of the
formerly state-owned farm, whereas Castel Group has
taken part of the farm to develop wine.
During his visit of the flower farms, Girma was
pushed by the investors to consider making land
available in areas where the Awash River spills over
during the rainy season.
It would be possible to develop 1,000hc of land for
horticulture farms in this area if dams can be
constructed to control the seasonal flooding, and
official from the Ministry of Trade and Industry
told Fortune.
Indeed, it is highly likely that the government will
consider the request to convert develop the area,
the official added. Meanwhile, the government
insists that investors pay the required compensation
for the farmers.
Speaking to Fortune, Tsegaye Abebe, chairman
of the Ethiopian Floriculture- Horticulture
Producers and Exporters Association (EHPEA),
expressed optimism that once a dam is built along
the basin of Awash River, the concerns of developers
would be in large part addressed.
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