Academic journal article Eastern Africa Social Science Research Review

Determinants of Household Participation in Land Rental Markets in Amigna District, Arsi Zone of Oromiya Region, Ethiopia

Academic journal article Eastern Africa Social Science Research Review

Determinants of Household Participation in Land Rental Markets in Amigna District, Arsi Zone of Oromiya Region, Ethiopia

Article excerpt

Abstract: This study examines factors affecting household participation and intensity of the participation in land rental markets using data collected from 118 households. Results revealed that landholding and age of the household heads are important variables which had an inverse and significant influence on participation and the intensity of participation in land renting-in market, but positively affect renting-out market. On the supply side, having less oxen and being aged are more likely to affect renting-out. Credit market imperfection, tenure insecurity and poor infrastructure development remain important factors impeding the function of land rental markets. These suggest that interventions should emphasize facilitating land-related transactions through creating effective micro-finance institutions, public awareness and strengthening enforcement of formal rules in land rental markets.

Keywords: Land tenure, land renting, participation, land markets, contracts

(ProQuest: ... denotes formulae omitted.)

1. INTRODUCTION

Ethiopia is one of the largest countries in Africa both in terms of land area (1.1 million km2) and population (about 74 million); its economy is based mainly on agriculture which provides employment for 85 per cent of the labour force and accounts for a little over 50 per cent of the GDP and about 90 per cent of export revenue (CSA 2002; CSA 2007). Mulat (1999) noted that access to land is a growing concern for the majority of Ethiopian people who, in one way or the other, depend on agricultural production for their income and subsistence. Similarly, FAO (2002) pointed out that in areas where other income-generating opportunities are limited (for example, rural non-farm employment), access to land determines not only household level of living and livelihoods, but also food security. The extent to which individuals and families are able to be food secure largely depends on the opportunities they have to increase their access to assets such as land.

Preceding the 1975 land reform which vested land ownership in the state, the land tenure systems varied, but broadly fell into usufructuary tenures and private tenures (Rahmato 1984). Under the usufructuary tenures, land rights were claimed based on establishing ancestral links to the original holders of land which led over time to small and fragmented landholdings (Adal 2002). Such land was inheritable and tradable in the rental market, but could not be sold and mortgaged (Tesfaye 2004). However, under private tenure, which prevailed in southern Ethiopia, land was sold and exchanged but it was originally state property and the private holders had not absolute rights. Sharecropping and cash rental arrangements existed under usufruct tenures but more under the private tenures where serious land concentrations, exploitative tenancy, and insecurity of tenures were widespread (Tesfaye 1999; EEA/EEPRI 2002; Tesfaye 2004; Tesfaye and Adugna 2004).

Abrogating the 1955 constitution that had permitted the right to possess private property, the land reform of 1975, the subsequent constitutions of 1987, 1995, and the Federal Land Policy of 1997 bestowed the right of ownership of land and natural resources to the state (DRE 1987; FDRE 1995; FDRE 1997). Following the 1975 land reform proclamation (No. 30/1975), major redistribution of land was implemented to allocate land considering the number of household members but ignoring factors such as quality of land, size of family workforce, and ownership of farm assets, which have a substantial influence on the ability to use the land (Rahmato 1984; Adal 1997; Haile-Gabriel 2000).

Despite egalitarian landholding in the north, and homogenous social structure of most of the farm households that are engaged in agricultural activities in Ethiopia, there exists heterogeneity, which manifests itself by marked variation in agricultural resource endowments (Amare 1995; Gebreselassie 2005). There are farmers who hold equal size of land per household, but significantly vary in factor proportions such as land per adult labour, land per oxen, and land per working capital. …

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