Land Market in Ethiopia: Towards Reform Potentials, Challenges and Opportunities

Since military Derg regime, state used to own land in Ethiopia. The present government, the Federal Democratic Republic of Ethiopia, eliminated the possibility of flexible application of land policy by inserting it in its Constitution and requiring its amendment by the agreement of all State Councils and two-third majority vote in a nationwide referendum. In the same Constitution the government promised to provide farmland to those who need to engage in agricultural activity free of charge, but now it turns into a mere wish. Farmers are given use right with bundles of restrictions. One of a restriction is land rental markets that narrowed the land access opportunities of farmers. Even the landholder’s land size was highly diminishing from time to time that make majority of farmers to hold a plot size below the minimum legal limit and many rural youths landless. As a result, the landless classes are trying to get land through informal market forces that are beyond the legal fences. The roles of these markets are: - providing land accessible to those who are more productive, but who own no or little land; allowing the exchange of land as the off-farm economy develops; and facilitating the use of land as collateral to access credit market.

Hence, this study examines the current land markets in Ethiopia towards reform potentials, challenges, and opportunities. Since the nature and the source of the problem is the policy and the law itself, this study is intended to explore and analyze the current rural land market policy and laws of Ethiopia and suggest the feasible land market policy based on the existing land market potentials, challenges and opportunities. To attain the intended objectives of the study the writer employed a doctrinal legal research method by which primary national land policy and lawsas well as international soft laws/declarations were analyzed. In addition, different books, academic legal journals, conference presentations, and related secondary source of materials on rural land rental markets are deeply referred.

The study reveals that although land shortage is the prevailing problem in Ethiopia, there are landholders who lack labor, capital and time to cultivate their lands on one side and landless rural community who need to engage in agricultural activities on the other side. But, because of legal restrictions, they are engaging in informal land markets. However, the government has a key role in facilitating and functioning of efficiency-enhancingl and markets.

Accordingly, the writer recommends a policy option that can elevate or remove the current legal restrictions on land rental markets like maximum time limit, land size, traditional technology, residency, collateralization, etc. and harmonize it with the existing practices of the society by making land rental market policy flexible in Ethiopia.