Using National Statistics to Increase Transparency of Large Land Acquisition: Evidence from Ethiopia

Publisher: World Development, vol. 93
May 01, 2017
Authors
Daniel Ayalew Ali, Klaus Deininger, and Anthony Harris

Key Findings:

  • Data is key to regulate, monitor, and attract responsible investors on land.
  • Commercial farms’ yields are higher than smallholders’ in Ethiopia.
  • Commercial farms create few permanent jobs.
  • The majority of commercial farms in Ethiopia are owned by local investors.
Almost a decade after the rise in land demand triggered by the 2007/08 commodity price boom, most potential target countries still lack access to relevant information on a routine basis. This has reduced their ability to effectively regulate, monitor, and attract responsible investors rather than speculators in their effort to increase agricultural productivity and have benefits accrue to the host communities. The example of Ethiopia shows how building on existing data collection efforts allows to address this challenge and help formulate policies that guide the path forward. Using the 2013/14 nationally representative smallholder and commercial farm surveys, we find that (i) for most crops commercial farms’ yields are higher than smallholders’, with a peak in the 10–20-ha bracket; (ii) commercial farms create few permanent jobs (with just one permanent job per 20 ha) and use only 55% of the land transferred to them; and (iii) after a peak in 2008, formation of new commercial farms is down to the pre-2007 levels. These findings imply that having reliable data on commercial farms, collected on regular intervals, could generate feedback loops for policy formulation and also provide vital information to assess and take regulatory actions aimed at improving the performance and attracting higher levels of investment to the sector.