Impact of Land Rental Market Participation on Smallholder Farmers’ Commercialization: Panel Data Evidence from Northern Ethiopia

Abstract

AbstractThe purpose of this study is to assess the impact of participation in the land rental market on smallholder farmers’ commercialization using farm household panel data in Tigrai, Ethiopia. Regression results reveal that 1 hectare increase in area rented in by tenant households leads to a 60% increase in the likelihood of participation in the output market as a crop seller and increases the marketed output sold by tenant households by US$ 200/year. The results appear to indicate that land rental market in the land scarcity economy to some extent contributes positively in the facilitation of transformation toward smallholders’ commercialization.