Determinants of Land Contracts and Efficiency in Ethiopia: The Case of Libokemkem District of Amhara Region

Abstract

The land policy reform that took place in the 1990s in northern Ethiopia has resulted in various forms of land contracts and efficiency. As a policy measure, sale of land is officially prohibited while leasing and inheritance are allowed in one form or another. This paper attempts to assess the efficiency of the different forms of tenure arrangements emerging in Libokemkem district of the Amhara region, northern Ethiopia, and their implication for land tenure policies.
With the help of maximum likelihood estimates the effect of various factors on total operated fields was examined. The maximum likelihood result indicates that oxen ownership, family size, age, and total income determine the total cultivated land. It was also shown that choice of crops (tef and wheat) resulted in positive estimates indicating that crop types determine the land area operated. Choice of tenure arrangement on the other hand depends on livestock units, large family size and food shortages, and access to markets. This finding calls for a kind of intervention, which can support operation of informal land markets to be more efficient than the prevailing situation.