A Turkish company, Toren Agri Plc, signed on Monday a 23.7 million birr land lease agreement with the Ministry of Agriculture (MoA) of the Federal Democratic Republic of Ethiopia. The agreement was signed by Tefera Derbew, Minister of Agriculture and Mohammed Kedir representing Toren.
The Turkish leased the land at a price of 158 birr per hectare for a period of 25 years to produce cotton on a large scale. Toren expects to complete 30% of the project over a year according to its business plan.Toren will pay approximately 960, 000 birr for the irrigable land it leased in Gambella Regional state.
This agreement is the second contract that the MoA has signed this year for large scale cotton production. The Ministry has marked out 2.6 million hectares for the cultivation of cotton, which is on par with what one of the largest cotton producers, Pakistan has made available for the same use.
The Ministry has a standard lease price based on whether the land requires irrigation and how close it is to Addis Ababa as per a study conducted by the Ethiopian Development Research Institute.
To date, only 93,985 hectares of land is covered with cotton, of which 26,377 hectares are held by private investors and the rest by local farmers.
The demand for cotton in Ethiopia has increase by 33% over the last year. The MoA has leased 54,000 hectares of land to eight private investors in the last fiscal year.
Source: Addis Fortune