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Development of Land Rental Markets and Agricultural Productivity Growth: The Case of Northern Ethiopia


  • Samuel Benin
  • Mohamed Ahmed
  • John Pender
  • Simeon Ehui


Short-term land leases have an important role to play for efficient land management and agricultural development, especially when land sales and mortgages are prohibited and markets for other factor inputs are imperfect or missing. This study utilises data from the highlands of northern Ethiopia to examine the evolution since 1991 of land rental markets, factors contributing to the changes and impact of the changes on land productivity growth. Use of fixed-rent lease and 50--50 sharecropping arrangements have increased substantially and are the dominant forms of land rental. The major factors contributing to the increase in use of land rental arrangements include change in the production environment, change in access to credit, commercialisation of cereal production, change in human capital and change in tenure security. The increase in use of land rental markets has had a positive impact on change in average cereal yields and the impacts associated with increases in use of fixed-rent leases or sharecropping arrangements are not statistically different. Together, the results suggest that land tenure arrangements are indeed dynamic and have evolved in a manner that has eliminated any Marshallian inefficiencies associated with share tenancy. Copyright 2005, Oxford University Press.

Suggested Citation

  • Samuel Benin & Mohamed Ahmed & John Pender & Simeon Ehui, 2005. "Development of Land Rental Markets and Agricultural Productivity Growth: The Case of Northern Ethiopia," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(1), pages 21-54, March.
  • Handle: RePEc:oup:jafrec:v:14:y:2005:i:1:p:21-54

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    Cited by:

    1. Ghebru, Hosaena & Girmachew , Fikirte, 2017. "Scrutinizing The Status Quo: Rural Transformation And Land Tenure Security In Nigeria," Feed the Future Innovation Lab for Food Security Policy Research Papers 264394, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    2. Jacky MATHONNAT & Jean-François BRUN & Martine AUDIBERT & Marie-Claire HENRY, 2006. "Malaria, Production and Income of the Producers of Coffee and Cocoa: an Analysis from Survey Data in Côte d’Ivoire. Malaria, coffee and cocoa production and income," Working Papers 200631, CERDI.
    3. Deininger, Klaus & Jin, Songqing, 2007. "Land rental markets in the process of rural structural transformation : productivity and equity impacts in China," Policy Research Working Paper Series 4454, The World Bank.
    4. Beyene, Abebe D. & Bezabih, Mintewab & Gebreegziabher, Zenebe, 2012. "Contract Duration under Incomplete Land Ownership Rights: Empirical Evidence from Rural Ethiopia," Discussion Papers dp-12-09-efd, Resources For the Future.
    5. Yahui Wang & Liangjie Xin & Xiubin Li & Jianzhong Yan, 2016. "Impact of Land Use Rights Transfer on Household Labor Productivity: A Study Applying Propensity Score Matching in Chongqing, China," Sustainability, MDPI, Open Access Journal, vol. 9(1), pages 1-18, December.
    6. Ragasa, Catherine & Chapoto, Antony & Kolavalli, Shashi, 2014. "Maize Productivity in Ghana:," GSSP working papers 5, International Food Policy Research Institute (IFPRI).
    7. Wisdom Akpalu & Mintewab Bezabih, 2014. "Tenure Insecurity, Climate Variability, and Renting-Out Decisions Among Female Smallholder Farmers in Ethiopia," WIDER Working Paper Series wp-2014-140, World Institute for Development Economic Research (UNU-WIDER).
    8. Jin, Songqing & Deininger, Klaus, 2009. "Land rental markets in the process of rural structural transformation: Productivity and equity impacts from China," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 629-646, December.
    9. Ndoye Niane, Aifa Fatimata & Burger, Kees & Bulte, Erwin H., 2010. "Horticultural Households Profit Optimization and the Efficiency of Labour Contract Choice," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 95776, African Association of Agricultural Economists (AAAE).
    10. Alia, Didier & Kusunose, Yoko & Theriault, Veronique, 2016. "Land rental, farm investment, productivity, and efficiency in Burkina Faso," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236169, Agricultural and Applied Economics Association.
    11. Akpalu, Wisdom & Bezabih, Mintewab, 2014. "Tenure insecurity, climate variability, and renting-out decisions among female small-holder farmers in Ethiopia," WIDER Working Paper Series 140, World Institute for Development Economic Research (UNU-WIDER).
    12. Robertson R.B. Khataza & Atakelty Hailu & Graeme J. Doole & Marit E. Kragt & Arega D. Alene, 2019. "Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 237-246, March.
    13. Zeng, Di & Alwang, Jeffrey & Norton, George & Jaleta, Moti & Shiferaw, Bekele & Yirga, Chilot, 2018. "Land ownership and technology adoption revisited: Improved maize varieties in Ethiopia," Land Use Policy, Elsevier, vol. 72(C), pages 270-279.
    14. Wisdom Akpalu & Mintewab Bezabih, 2015. "Tenure Insecurity, Climate Variability and Renting out Decisions among Female Small-Holder Farmers in Ethiopia," Sustainability, MDPI, Open Access Journal, vol. 7(6), pages 1-16, June.
    15. Gebru, Menasbo & Holden, Stein T. & Tilahun, Mesfin, 2017. "Can the land rental market facilitate smallholder commercialization? Evidence from northern Ethiopia," CLTS Working Papers 10/17, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 21 Oct 2019.

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