The Short-run Effects of the 1996/97 Land Redistribution on Farm Practices and Agricultural Productivity in Amhara Region of Ethiopia

Abstract

This study investigated the short-run effects of the 1996/97 land redistribution
in Amhara region on farm practices and agricultural productivity of farmers
in the affected areas. A difference-in-difference estimation technique was
employed using agro-ecologically similar control groups from the border
sharing administrative zones of Oromia region. We found a significant
negative effect of the land redistribution on crop yield and value of crop
yield. Analysis of household survey data suggested that the land redistribution
reduced agricultural productivity by distorting the allocation of agricultural
inputs. In other words, rural land markets are highly imperfect and the poor
beneficiaries of the land redistribution could not afford to purchase oxen and
other key farm inputs in the short-run due to imperfect credit markets. This
study suggests the need to improve targeting of existing pro-poor programs,
such as credit, agricultural extensions and rural capacity buildings, which
enhance rural factor markets, such as land rentals, to boost the agricultural
productivity effects of redistributive land reforms both in the short-run and
long run.