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Yara Wins Ethiopian Fertilizer Contract

Three months after awarding a prize to President Meles Zenawi for his commitment to agriculture, Yara International won major fertilizer contracts in Ethiopia.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
Three months after awarding a prize to President Meles Zenawi for his commitment to agriculture, Yara International won major fertilizer contracts in Ethiopia.

(First published in Norwegian 02 Jan 2006)

By Erik Hagen

The Norwegian fertilizer company Yara International, which last autumn honoured Ethiopia’s dictatorial prime minister with an award in Oslo’s Concert Hall, won several major fertilizer contracts in December, after bidding rounds.

The fertilizer is to have been sold to two government-controlled cooperatives that wield political power over farmers. Human rights organizations have for years criticized the Ethiopian government for placing oppositional farmers in debt by forcing them to buy fertilizer on credit.

Yara informed Norwatch that the new deliveries constitute a total of 50,000 tonnes nitrogen-based urea and 50,000 tonnes phosphate-based DAP fertilizer. According to the Ethiopian press, the DAP fertilizer is worth about NOK 95 million (€12 mill). The first deliveries will be made already in January 2006.

Not surprising
Yara’s communications director, Arne Cartridge, did not consider it strange that Yara won the bidding round in Ethiopia just three months after the ceremony in Oslo.

“As the world’s largest fertilizer supplier and the only big international participant already present in Africa, it is perhaps not so surprising that we occasionally have contracts on the books,” Cartridge told Norwatch.  

Cartridge stressed that Yara has delivered fertilizer to Ethiopia for years and that it is the local Yara agent in the country who secures the contracts.

“The Yara prize was awarded at an awkward time and became part of a political play in Ethiopia, by both parts involved. There is a risk that some will make more out of it than is really involved,” he said.

Already at the beginning of December it was clear that Yara had made by far the best offer in the last bidding round.

According to The Ethiopian Herald, the main buyers are two agricultural cooperatives, Hetosa and Ambo, in the Ethiopian state Oromia. According to the same newspaper the cooperatives include a total of 44,000 farmers.

Problematic partners
These two cooperatives are, however, not known as democratic farmer associations. On the contrary, they are supposed to function as government-organized suppliers for the farmers. The cooperatives’ leaders are appointed by the political party Oromo People’s Democratic Organization (OPDO). OPDO is one of the four big parties in Ethiopia’s central government and is a greatly despised party in Oromia.

“In all rural areas in Ethiopia and Oromia people complain about the distribution of fertilizer,” Chris Albin-Lackey, the Ethiopia expert at Human Rights Watch, informed Norwatch. “Local civil servants use the fertilizer as a tool to silence the opposition,” he said.

This is done either by denying the farmers who need it access to the fertilizer or by arresting the farmers who are unable to pay for the fertilizer that has been forced upon them. And it is always the oppositional farmers who are affected. The Oromia region, which will now receive Yara’s fertilizer, is one of the areas where the agricultural cooperatives have achieved great control over the population by means of fertilizer distribution.

“Do you believe that the fertilizer producers have a responsibility to influence Ethiopian authorities to distribute the fertilizer in a more responsible manner?” Norwatch asked.

“Yes, absolutely. In many ways the companies’ lack of engagement in Ethiopia reflects the attitude of the international community to the country. Everyone choose to ignore the serious human rights breaches that their government is responsible for,” said Albin-Lackey.

Ambiguous numbers
When Yara International chose the Ethiopian prime minister as the first recipient of the newly established prize, the company aroused great anger both in human rights organizations and among the political opposition in Ethiopia. Zenawi received the prize for having initiated a comprehensive commitment to the country’s agriculture. According to the Yara Foundation, this has led to a strong growth in agriculture during the past few years. But, as Norwatch has documented, no such growth has occurred in Ethiopian agriculture. Yara utilized positive results from a government research centre in Ethiopia, controlled by Zenawi’s government. Results that Norwatch has obtained from the Food and Agricultural Organization (FAO), among others, show that agriculture has had a slower growth than the population growth.

See also coverage in Norwegian daily Aftenposten.