Baku-Shambu region in west Ethiopia.

Credit: ILRI / Apollo Habtamu. Baku-Shambu region in west Ethiopia.

April 2012 - A national survey in Ethiopia found that three-quarters of rural households do not have enough land to feed their families, and nearly 40 percent consider the lack of available farmland to be the main barrier to raising agricultural productivity.  In this situation, a well-functioning land rental market could help smallholder farmers—who make 80 percent of Ethiopia’s population—to grow enough food and earn an adequate living.

About one-quarter of all rural families in Ethiopia are engaged in the land rental market, mostly through informal sharecropping arrangements with neighbors, relatives or in-laws.  Land rental often enables smallholders to access better land, or provides income to purchase farm inputs.  Farmers also often rent out land to help land-poor or landless family members, such as adult children who have not been allocated land by the State—despite its constitutional commitment to do so. 

Land leasing policies vary regionally, and nearly every region has rules that limit the leasing of land.  These limits are meant to protect smallholder farmers, but they also have negative impacts.  Women-headed households may lack the labor needed to farm their land, yet be unable to rent it out to earn income, and farmers may be tied to inadequate land.

The government, economists and international partners have debated a range of land rental policies. Some have argued that removing restrictions—such as limits on the amount of holdings that may be rented—would improve agricultural productivity by allocating land efficiently, and placing land in the hands of the most productive farmers. On the other hand, the government has argued that land rental market restrictions are needed to prevent unproductive land concentration and distress rentals that could increase the number of landless poor.

Even without wholesale policy changes, a number of interventions could improve outcomes for the rural poor.  For instance, female-headed households could be permitted to lease out a larger portion of their land.  Clarification of lease registration requirements could increase trust in the system, and expand smallholders’ options while also protecting their long-term land rights.



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