Assessing the functioning of land rental markets in Ethiopia

A study was conducted to assess the functioning of land rental markets in Ethiopia, with a focus on enabling the nation to make the most productive use of available land resources, solving the problems of starvation and dependence of food aid. The study played an important role for nonagricultural development and focused on the significance of the country, which is characterized by a relatively equal allocation of land but high levels of production risk that results in sharecropping as the most prevalent contractual form. The study found that the level of Ethiopia's inefficiency associated with sharecropping is comparatively modest, and from a policy point of view, anything that will minimize uninsured risk exposure of producers will result in higher levels of efficiency. The introduction of technology, greater integration with marketing and processing, and better off-farm opportunities will also play a vital role in rural growth and development in the future.