MoA enters into contract for large-scale cotton production

11 Oct '11

2 min read

Ethiopia's Ministry of Agriculture (MoA) has entered into a contract for large-scale production of cotton with a Turkish company, Toren Agri Plc.

The 23.7 million Br land lease contract was signed by Tefera Derbew, Minister of Agriculture and Toren's representative Mohammed Kedir.

Toren will be the first Turkish company to engage in cotton production in Ethiopia and will pay a lease price of 158 Br for a hectare for 25 years. Initially, the company will pay a sum of 960,000 Br to acquire the irrigable land located in Wondo-Goge wereda in Gambella regional State.

The area, situated at a distance of around 900 km from Addis Abeba, is located adjacent to Gillo River, and the company would be able to divert water from the river for over head irrigation system.

According to the deal, the Turkish company is expected to finish 30 percent of the project, including making land ready for sowing cotton, within a period of one year, failing which, the MoA can reclaim the land.

This is the second land lease contract signed by the MoA this fiscal year, after it had signed a deal for 3,000 hectares of land with MAMAY Plc, a fortnight ago.

The MoA increased its focus on cotton last year when domestic production fell short of meeting the demand from local textile and garment manufacturers. The demand for cotton has grown to 76,000 tons in 2011, which is a 33 percent increase over the previous year's demand of 57,000 tons.

In its effort to satisfy the growing domestic demand for cotton, MoA leased 54,000 hectares of land to eight private investors, last fiscal. The Ministry has set a standard lease price based on a research undertaken by the Ethiopian Development Research Institute (EDRI). It takes into account factors such as proximity to the capital Addis Abeba, and whether the land is rain-fed or irrigated.

The Ministry has identified 2.6 million hectares of land in the country as fit for cotton cultivation. But, at present, only 93,985 hectares of land is covered with cotton, of which about 26,000 hectares of land is held by private investors with the remaining being with local farmers.

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