Renting of Farm Land: The Skyrocketing Cost That is Posing a Challenge for Smallholder Farmers by Ibrahim 05 March

posted in: IFC Project - Ethiopia | 0

Basically, land is a huge asset and a potential source of income, especially for farmers living in Koma Kara Kebele. That’s because farmers who own large plots of land are highly advantaged since they could either engage in large-scale farming and/or could rent their land to another farmer with a huge amount of renting money. They could farm with other farmers too. That’s what is called HIRTAA (in which agricultural yields are eventually shared by two and the landowner only contributes his land while other costs are covered by the other farmer).

More specifically, some farmers own small plots of land and they rely on rented land for their agricultural activity. However, the renting price for Agricultural land is rising year after year. It has now reached about 30,000 ETB for one hectare (2.47 acres) of land. Farmers can rent half of the hectare with 15,000 ETB ETB. The rent price varies according to the location of the land, its proximity, the productivity of the land/soil itself, and other concomitant issues.

Furthermore, I was informed that some farmers have been renting about 2-4 hectares of farmland for themselves, annually. Moreover, Yekatit and Megabit months are ideal months for renting farming land. One respondent has confirmed that he has already secured 1 hectare of land with the above-mentioned amount of money and he indicated that the price of Farming Land is rising unexpectedly. What’s more important is that there are very few farmers who instantly rent farming and had been relying on this as a source of income.

In a nutshell, my respondents have confirmed that the rent price for farming land is rising and skyrocketing. There is a massive increase from 10,000 to 30,000 ETB for one hectare within the past 5-8 years alone. For smallholder farmers who own small farming lands, renting has been posing a challenge. Needless to say, whenever farmers rent land and whenever the agricultural yield eventually goes down, it brings a huge bankruptcy on the farmers.