Impact of land acquisition for large-scale agricultural investments on income and asset possession of displaced households in Ethiopia

Abstract

Displacement due to Large-Scale Agricultural Investments (LSAIs) is on the rise globally and in Africa. However, the impact of such displacement on the income and asset holding status of the displaced smallholders is not well explored. This study, therefore, empirically analyzed such impact taking Ethiopia as a case. A household survey covering different aspects of rural income sources and assets was collected from 255 displaced farmers and 266 non-displaced farmers in Adamitulu and Dugda districts. Propensity score matching technique (PSM) was applied to assess the impacts. The study findings indicated a significant reduction of income and assets among the displaced households. The mean annual income of the displaced households has declined by 72% (97,000 Ethiopian Birr (ETB)) compared to that of the income of the non-displaced households. Moreover, the livestock and productive assets holding of the displaced smallholders declined by 2.4 tropical livestock units (TLU) and 5219.6 ETB (69%) respectively compared to the non-displaced households. This implies displacement due to the LSAIs has worsened the income and asset condition of the displaced households in Ethiopia. Therefore, policymakers should put in place specific interventions to protect the income and asset holding of displaced smallholders. Empirical analysis of the impacts of LSAIs on livestock and productive asset possession of the displaced households is a key contribution of this study, and not well researched before.