Impact of land rental on smallholders’ commercialization evidence from northern Ethiopia: A Panel Data Analysis
Menasbo Tesfay
The purpose of this study is to examine whether participation in the land rental market from the demand side affects participation and degree of participation in the output market of smallholder farmers. We use a correlated random effects probit and tobit models to analyze the effect of area rented in on participation and degree of participation in the output market as crop seller. We apply a control function approach to control for possible endogeneity associated with access to area rented in. Results show that for a change of area rented in by one ha, the likelihood of participation in the output market as a crop seller increased by about 8 % and degree of participation increased by about Birr 602-616 per household per year. Thus, promoting land rental market appeared to have a more robust impact on smallholder commercialization in a land-scarce economy.
Event: Land Governance in an Interconnected World_Annual World Bank Conference on Land and Poverty_2018
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