Contract farming as an alternative to large‐scale land acquisition and promoting inclusive and responsible agricultural investment: Evidences from Ethiopia

The acquisition of large tracts of land for agricultural investment from developing countries, including Ethiopia, by commercial firms has been aggravated after global food crisis in 2007–2008. Given the current attention to large‐scale land acquisition or land grabbing phenomenon, contract farming has been identified as a participatory and inclusive farming model which does not require agricultural firms to purchase or lease land in order to operate agricultural investments. Contract farming enables local smallholder farmers to produce agricultural products on their own land and ensure the benefits of land‐based agricultural investments remain with them. Unfortunately, the understanding and practice of contract farming as an alternative to large‐scale land acquisition to protect the land rights of the local people is underexplored in Ethiopia. This study, therefore, is aimed to examine the practice and conceptual understanding of contract farming in the context of agricultural investment in Ethiopia. To achieve this objective, mixed research approach was employed. Intensive document reviews, questionnaire, key informant interview and FGD were used as data collection tools. The results show that the practice of contract farming in Ethiopia is very insignificant and commercial farming is almost entirely relied on land acquisition. Moreover, gaps in policy and legal framework to guide contract farming has made difficult to effectively implement contract framing at national level. Finally, this study advised to introduce contract framing as a viable alternative to land acquisition for agricultural investment that fosters local smallholder farmers' participation in agricultural production and contributes to sustainable development.