This PhD thesis relays to the development of smallholder agriculture in developing country, Ethiopia, in the context of a recent land reform to improve land tenure security and land rental markets. It further asks how participation as tenant affects farmers’ commercialization and it looks more general at the determinants of farmers’ adoption of improved agricultural technologies in a semi-arid economy.
The main goals of the thesis are two folds. First, in a risky agriculture, presence of high transaction cost, input and out market imperfections, examining how the recent land reform enables smallholder farmers to participate in the land rental and then in the output markets after improving land tenue security due to certification. Second, to assess the influence of farm level population density, weather shocks and accessibility of public service on adoption of improved agricultural technologies.
Using observational data and various econometrics methods, results revealed that state dependency and previously weather variability strongly and positivity affect current participation and intensity of participation of potential tenants in land rental market. This has been further improves output market integration and enables to create an entrepreneurial farmers. Adoption analysis indicates that labor-endowed families are engaged in the production of cash crops that demand multiple treatments and labor-intensive tasks and more likely to adopt improved wheat to feed the growing population. Improving the long term implication of land certification, landholders with the second stage certificates have significantly improved land tenure security compared to their counterparts.
The research questions addressed in thesis reflect to the current situation in developing countries where market imperfections, high transaction cost, weather shocks, and high population pressure to be the main challenges of agricultural growth. This insights to policy makers of developing countries to deploy all-encompassing economic reforms and programs for smallholder agriculture.
The study makes important contributions to scant literature on the link between the land rental–output market participation of potential tenants and explore the benefit packages of second stage land certification compared to the first stage land certification. In developing countries, where agriculture remains a risky activity, applying better agricultural practices could help farmers to smooth out production and consumption. This could still be an important policy focus, at least in areas with high population density, land scarcity or the potential for irrigation development. The study also enriches the existing literature on the subject matter by using rich and long panel data and various econometric methods to account for unobserved heterogeneity and endogeneity.
Menasbo Gebru Tesfay, School of Economics and Business (HH), will defend his PhD thesis "Land rental markets, technology adoption, and smallholders’ commercialization in a semi-arid economy" on 27. May.