Drivers of household participation in land rent-out market: Evidence from Amigna District, Arsi Zone, Ethiopia

Abstract

This research is attempted to understand drivers of household decision to participate in landrent-out market. Using data from 88 farm households surveyed in 2009 the paper tested for factors that affect the degree and extent of households’ participation in the rural land rentalmarket. Result of the Tobit model revealed that landholding size, and age of the household heads are important variables which had positive and significant influence on participation and intensity of participation in land renting-out market. The result further explained that less oxen ownership and older households are more likely in renting-out their land. This implying that rental market helps to facilitates adjustments in farm size in order to meet emerging current needs of young households and enabling smooth replacement of older generations. The analyses figured-out that the liquidity of land renting-out market is hampered by insecurity of tenure in arranged rental land market. The twin effects of land tenure insecurity and poor infrastructure development cause farms to operate below optimal level. Therefore, it would thus be desirablefor the government to improve the regulatory framework for the land rental market to operate efficiently; and development interventions should give emphasis to strengthening infrastructural development so as to enhance well functioning dynamic land rental markets in the district. Key words: Land rent-out, tenure security, drivers to land markets