Is further formalization necessary? Land policy, agricultural transformation, and small holder farmers in Ethiopia

1. ETHIOPIAN DEVELOPMENT
RESEARCH INSTITUTE
Is further formalization necessary? Land policy,
agricultural transformation, and small holder farmers
in Ethiopia
By: Hosaena Ghebru, Bethelhem Koru, and Alemayehu Seyoum Taffesse
IFPRI ESSP-II
Ethiopian Economics Association (EEA) and the Econometric Society
19th Annual Conference of the African Region Chapter of the Econometric Society
12th International Conference on the Ethiopian Economy
July 16-19, 2014
Addis Ababa
1

2. Background
• In Ethiopia all land is state owned and individual households are
given user rights but no right to sell.
• First stage certification:
– Largest and least costly titling programs.
– Relied on community aided plot demarcation (neighbors and other
community members served as witnesses to border demarcations);
– Included only the name of household heads on the certificates; and
• What did certification mean in the Ethiopian context?
– Rights to use, bequeath, inherit, rent out, invest;
– Responsibility for land conservation;
– Restricts migration and duration of rental contracts;
– Obligation to use the land;
– Restricts proportion of land rented out up to only half of holdings.
• Each region has its own Land Proclamation;

3. Continued…

4. Rationale for a Second Round Certificate
• No updating mechanism in First Stage Certification Program
• Probability of border related disputes
- Erosion corrodes natural boundaries (45% of the households have natural boundaries)
- Number of witnesses diminish - people move, pass away
• Population growth
-Increases demand for land and
-Further pressure on border demarcations
• Tenure insecurity
- Affects urbanization and labor mobility
• Thus the objective of the study is to asses factors that explains perceived
tenure insecurity of households and to determine the demand for new
formalization of land rights in the country.

5. 5
Data and Methods
Data
Focus on high productive potential areas of Ethiopia(AGP)
-93 woredas in Amhara, Oromiya, SNNP, and Tigray
-Survey period of baseline 2011
-Midline survey collected 2013
-Total of 7503 Households
We have both household and parcel level information on
different variables to analyse insecurity of land
Methods - Mean comparison test and Logistic model

6. 6
Descriptive Results: Household level
Variables Tigray Amhara Oromiya SNNP
Number of parcels 3 4 3 2
Farm size(ha) 1.3 1.3 1.6 0.8
Percentage of HH with farm size
<=1 ha 53.81 47.98 38.41 71.2
1-2.5 ha 31.39 37.56 39.09 17.49
>2.5 ha 13.79 8.89 17.43 3.31
Household size(number) 4.7 4.3 5 5
farm size per capita 0.33 0.35 0.34 0.17
% of HH with clear boundary
demarcation 75 90 91 94

7. 7
Descriptive Results : Parcel level
Variables Tigray Amhara Oromiya SNNP
Mode of land Acquisition
Allocated 79.02 60.19 51.15 13.08
Purchased 1.89 1.60 2.63 8.41
Inherited/Parent's gift 19.02 38.13 46.12 78.48
Mortgaged 0.06 0.07 0.10 0.03
Total 4757 6803 5781 3508
Purpose of land use
Owner operated 52.53 71.26 70.96 64.94
Rented out 1.91 1.51 1.55 0.45
Sharecropped out 5.73 10.08 4.73 1.05
Permanent 4.38 6.98 13.81 58.06
Fallowed 1.41 0.88 2.38 6.06
Average parcel size(Ha) 0.40 0.34 0.50 0.45
% of Household with Natural Boundaries 62 58 46 21

8. 8
Indicators of Land Tenure Insecurity
In order to asses tenure insecurity of farm households, we used four
main indicators (variables)
-Perceived risk of Private land dispute
-Perceived risk of land expropriation
-Likelihood of boarder dispute
-Demand for land demarcation

9. 9
Indicators of Land Tenure Insecurity vs Land Certificate
Variables
With
certificate
With out
certificate
Perceived risk of expropriation 0.81 0.75***
Perceived risk of Private Land dispute 0.41 0.4
Perceived risk of boarder dispute 0.64 0.62

10. 10
Mean comparison test: Household characteristics vs Tenure
insecurity indicators
Variables
Perceived risk of land
dispute
Perceived risk of
expropriation
by demand for land
demarcation
Yes No Yes No Yes No
Monogamy 0.69 0.696 0.69 0.693 0.696 0.683
Single 0.036 0.024** 0.03 0.026** 0.028 0.027
widow 0.163 0.179 0.176 0.156 0.166 0.191
Divorce 0.052 0.033 0.04 0.039 0.041 0.026
Farming 0.878 0.865 0.87 0.859 0.867 0.883
Domestic work 0.076 0.093 0.082 0.108 0.089 0.08
Non farm 0.032 0.022 0.031 0.021 0.03 0.017***
N 2566 3725 5864 1508 3195 1753

11. Mean comparison :Land characteristics and farming types
vs Tenure insecurity
Variables
Perceived risk of
land dispute
Perceived risk of
expropriation
Most-likely
dispute is border
Yes No Yes No Yes No
Area proportion of gedel
parcel
0.01 0.02 0.02 0.01* 0.01 0.02**
Area proportion of
rented out land
0.01 0.01 0.01 0.008* 0.01 0.01
Area proportion of
sharecropped land
0.07 0.06 0.07 0.04** 0.07 0.05**
Area proportion of
fallow land
0.02 0.02 0.02 0.02 0.023 0.02**
Area proportion of
permanent perennial
0.15 0.19 0.17 0.12** 0.12 0.20**
N 2566 3725 5864 1508 3766 3608

12. 12
Logitic Model: Demand for land Demarcation
Demand for land Demarcation
Perceived risk of private land dispute(1=yes) 0.065***
(0.015)
Maximum years of parcel acquisition -0.001**
(0.005)
Number of parcel -0.05***
(0.019)
Farm size 0.008
(0.005)
Boundary marked(1=yes) 0.039**
(0.02)
Boarder dispute(1=yes) 0.053***
(0.015)
Purchased land 0.143***
(0.04)
sex(1=male) -.027*
(0.016)

13. Regression Result
 Household are more likely to demand for land demarcation if they
have
– purchased land
– held the land for longer period of time
– higher perceived risk of land dispute
– Reported boarder dispute as a major source of dispute
 Households are less likely to demand further land demarcation
if the head of the household is male

14. Regional Comparisons of Tenure Insecurity
Variables
Perceived risk of
expropriation
Most-likely dispute
is border Perceived risk of
land dispute
Yes No Yes No Yes No
Tigray 0.029 0.032** 0.031 0.028* 0.004 0.002***
Amhara 0.281 0.22 0.297 0.242 0.344 0.195***
Oromiya 0.441 0.458 0.47 0.419 0.393 0.573***
SNNP 0.249 0.291 0.202 0.311*** 0.258 0.229
N 5864 1508 3766 3608 3195 1753

15. In an in-depth study based on a big survey in Tigray
• Demand for the first stage certification
Household closer to the district town (+), implies tenure
insecurity is higher in peri-urban area
Potential land lose/dispute from government(-)
Female farmers
Large farm size per capita (+)
Large number of plots (+)
Members engaged in nonfarm activities (+)
Lease at least half of their land (+)
• Demand for the second stage certification
Potential border disputes (+)
Large farm size holdings (+)
Land is acquired through government allocation (-)
Higher if dispute is from neighbors (+)

16. Conclusion and Policy implication
• Generally tenure insecurity are still high, parcels with Perceived Risk of Private Land Dispute is
high (45%) while parcels with Perceived risk of expropriation is relatively low(16%) in Ethiopia.
• Perceived Risk of Private Land Dispute is not the same among regions; it is relatively high in
Amhara and Tigray and relatively low in Oromiya.
• Demand for land demarcation is positively associated with non-farm employment and
purchased land and negatively associated with longer years of acquisition
• The existence of boarder dispute increase the likelihood of demanding for further land
demarcation
• Women are more likely to demand further land demarcation.
• Perceived Risk of Private Land Dispute is highly associated with the other tenure security
indicators and boarder dispute experience. This implies policy intervention in one aspect could
also solve problems in other aspects.
• High proportion of parcels with clear boundary demarcation implies future boundary
demarcation process is not going to be a huge task. But, Risk of private land dispute can not be
solved simply by creating clear boundary demarcation