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Are land-poor youth accessing rented land? Evidence from Northern Ethiopia

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  • Holden, Stein T.

    (Centre for Land Tenure Studies, Norwegian University of Life Sciences)

  • Tilahun , Mesfin

    (Centre for Land Tenure Studies, Norwegian University of Life Sciences)

Abstract

Continued strong population growth in already densely populated rural areas in parts of Sub-Saharan Africa makes it harder for youth to choose agriculture as their main source of income. We investigate whether near landless youth still can access rented land as a complementary source of income. We utilize a unique data of rural youth that have been allocated rehabilitated communal land to form formalized business groups for joint business activity. They rely on complementary sources of income and land renting is one of these. Utilizing a sample of 3500 youth business group members from 360 youth business groups collected in 2016 and 2019 in five districts in Tigray region of Ethiopia, we find that 42% of the youth had access to rented land in 2016 and 47% in 2019. Average area rented was 0.66ha in 2016 and 0.74ha in 2019. Land renting is the most important source of income for 17 and 16% of the youth in 2016 and 2019 and the second most important source of income for 14 and 20% in 2016 and 2019, respectively. Access to rented land is constrained, however. Male youth who own oxen are much more likely to be able to rent in land. Utilizing a trust game to elicit trust and trustworthiness of the youth, we also found a positive association between trustworthiness and access to rented land. Trust reduces transaction costs and more trustworthy youth have better access to rented land. The importance of trust is also illustrated by the dominance of kinship contracts and contracts with close neighbors reducing the costs of monitoring tenants. The prohibition of land sales in Ethiopia limits the potential of the “agricultural ladder” to facilitate that youth can climb out of poverty through purchase of land. The youth group model may, however, help to overcome the barrier associated with very small and shrinking farm sizes and facilitate the development of larger and more professional land-based production units. Land renting is one of the rural livelihood diversification options that youth pursue and that help to sustain the youth business groups.

Suggested Citation

  • Holden, Stein T. & Tilahun , Mesfin, 2019. "Are land-poor youth accessing rented land? Evidence from Northern Ethiopia," CLTS Working Papers 7/19, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 10 Oct 2019.
    • Handle: RePEc:hhs:nlsclt:2019_007
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    References listed on IDEAS

    as
    1. Holden, Stein T. & Deininger, Klaus & Ghebru, Hosaena, 2007. "Impact of Land Certification on Land Rental Market Participation in Tigray Region, Northern Ethiopia," MPRA Paper 5211, University Library of Munich, Germany.
    2. Holden , Stein T. & Tilahun , Mesfin, 2018. "Gender Differences in Risk Tolerance, Trust and Trustworthiness: Are They Related?," CLTS Working Papers 3/18, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.
    3. Stein T. Holden & Keijiro Otsuka & Klaus Deininger (ed.), 2013. "Land Tenure Reform in Asia and Africa," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-34381-9, October.
    4. Asaaga, Festus A. & Hirons, Mark A., 2019. "Windows of opportunity or windows of exclusion? Changing dynamics of tenurial relations in rural Ghana," Land Use Policy, Elsevier, vol. 87(C).
    5. Otsuka, Keijiro, 2007. "Efficiency and Equity Effects of Land Markets," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 51, pages 2671-2703, Elsevier.
    6. Holden, Stein T. & Tilahun, Mesfin, 2020. "Farm size and gender distribution of land: Evidence from Ethiopian land registry data," World Development, Elsevier, vol. 130(C).
    7. Ernst Fehr, 2009. "On The Economics and Biology of Trust," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 235-266, 04-05.
    8. Mintewab Bezabih & Stein Holden & Andrea Mannberg, 2016. "The Role of Land Certification in Reducing Gaps in Productivity between Male- and Female-Owned Farms in Rural Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 52(3), pages 360-376, March.
    9. Holden, Stein T. & Tilahun, Mesfin, 2018. "The importance of Ostrom’s Design Principles: Youth group performance in northern Ethiopia," World Development, Elsevier, vol. 104(C), pages 10-30.
    10. Desta B. Gebrehiwot & Stein T. Holden, 2020. "Variation in Output Shares and Endogenous Matching in Land Rental Contracts: Evidence from Ethiopia," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(1), pages 260-282, February.
    11. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
    12. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    13. Deininger, Klaus & Ali, Daniel Ayalew & Holden, Stein & Zevenbergen, Jaap, 2008. "Rural Land Certification in Ethiopia: Process, Initial Impact, and Implications for Other African Countries," World Development, Elsevier, vol. 36(10), pages 1786-1812, October.
    14. Menale Kassie & Stein Holden, 2007. "Sharecropping efficiency in Ethiopia: threats of eviction and kinship," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 179-188, September.
    15. Bezu, Sosina & Holden, Stein, 2014. "Are Rural Youth in Ethiopia Abandoning Agriculture?," World Development, Elsevier, vol. 64(C), pages 259-272.
    16. John C. Anyanwu, 2014. "Does Intra‐African Trade Reduce Youth Unemployment in Africa?," African Development Review, African Development Bank, vol. 26(2), pages 286-309, June.
    17. Klaus Deininger & Daniel Ayalew Ali & Tekie Alemu, 2011. "Impacts of Land Certification on Tenure Security, Investment, and Land Market Participation: Evidence from Ethiopia," Land Economics, University of Wisconsin Press, vol. 87(2), pages 312-334.
    18. Johnson, Noel D. & Mislin, Alexandra A., 2011. "Trust games: A meta-analysis," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 865-889.
    19. Seiichi Fukui, 1997. "The Meaning of Kinship in Sharecropping Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 394-406.
    20. Chamberlin, Jordan & Jayne, T.S. & Headey, D., 2014. "Scarcity amidst abundance? Reassessing the potential for cropland expansion in Africa," Food Policy, Elsevier, vol. 48(C), pages 51-65.
    21. Bliss, C. J. & Stern, N. H., 1982. "Palanpur: The Economy of an Indian Village," OUP Catalogue, Oxford University Press, number 9780198284192.
    22. Emmanuel Skoufias, 1995. "Household Resources, Transaction Costs, and Adjustment through Land Tenancy," Land Economics, University of Wisconsin Press, vol. 71(1), pages 42-56.
    23. Azadi, Hossein, 2020. "Monitoring land governance: Understanding roots and shoots," Land Use Policy, Elsevier, vol. 94(C).
    24. Otsuka, Keijiro & Chuma, Hiroyuki & Hayami, Yujiro, 1992. "Land and Labor Contracts in Agrarian Economies: Theories and Facts," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 1965-2018, December.
    25. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    26. Stein Holden & Klaus Deininger & Hosaena Ghebru, 2011. "Tenure Insecurity, Gender, Low-cost Land Certification and Land Rental Market Participation in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 47(1), pages 31-47.
    27. Menasbo Gebru & Stein T. Holden & Mesfin Tilahun, 2019. "Tenants’ land access in the rental market: evidence from northern Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 50(3), pages 291-302, May.
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    2. Takada, Jun & Shuto, Hisato, 2023. "Causal linkages between land reform and factor demand under tenure insecurity: Evidence from Amhara Region, Ethiopia," Land Use Policy, Elsevier, vol. 128(C).

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    More about this item

    Keywords

    Continued strong population growth in already densely populated rural areas in parts of Sub-Saharan Africa makes it harder for youth to choose agriculture as their main source of income. We investigate whether near landless youth still can access rented land as a complementary source of income. We utilize a unique data of rural youth that have been allocated rehabilitated communal land to form formalized business groups for joint business activity. They rely on complementary sources of income and land renting is one of these. Utilizing a sample of 3500 youth business group members from 360 youth business groups collected in 2016 and 2019 in five districts in Tigray region of Ethiopia; we find that 42% of the youth had access to rented land in 2016 and 47% in 2019. Average area rented was 0.66ha in 2016 and 0.74ha in 2019. Land renting is the most important source of income for 17 and 16% of the youth in 2016 and 2019 and the second most important source of income for 14 and 20% in 2016 and 2019; respectively. Access to rented land is constrained; however. Male youth who own oxen are much more likely to be able to rent in land. Utilizing a trust game to elicit trust and trustworthiness of the youth; we also found a positive association between trustworthiness and access to rented land. Trust reduces transaction costs and more trustworthy youth have better access to rented land. The importance of trust is also illustrated by the dominance of kinship contracts and contracts with close neighbors reducing the costs of monitoring tenants. The prohibition of land sales in Ethiopia limits the potential of the “agricultural ladder” to facilitate that youth can climb out of poverty through purchase of land. The youth group model may; however; help to overcome the barrier associated with very small and shrinking farm sizes and facilitate the development of larger and more professional land-based production units. Land renting is one of the rural livelihood diversification options that youth pursue and that help to sustain the youth business groups.;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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