Do land transfers to international investors contribute to employment generation and local food security?

Abstract

Purpose – Like many countries in the developing world, Ethiopia has leased out a huge amount of land to foreign investors. However, empirical evidence on the contribution of international investments to employment generation and food security is limited. The purpose of this paper is to examine the contribution of large-scale farms to local-level food security in Bako Tibe District, Oromia Region. Design/methodology/approach – Primary data were collected from 200 randomly selected households from two purposefully selected villages in the district. Secondary data were collected from government offices and the literature. Propensity score matching was used to match households based on observable characteristics. Using the World Food Programme (WFP) approach, the food consumption score (FCS) of households was calculated. Finally, the Average Treatment effect for the Treated was determined. Findings – Findings indicate that foreign land deals increase the odds of households falling into food insecurity and that the employment opportunities are both temporal and marginal. Furthermore, these land deals result in a decline of households’ FCS and thus have a negative effect on households’ food security. Research limitations/implications – The result is based on a case study which is not generalizable to the whole of Ethiopia. Practical implications – The result implies that future endeavours should resort to substantial changes in the principles of investment as well as the design and enforcement of contracts on land transfers so that international investors can commit to objectives beyond private profit. Originality/value – It examines the effect of large-scale land transfers commonly termed as land grabbing on local food security. The paper makes an important contribution to the current policy debates regarding land grabbing in Ethiopia as research about the contribution of land deals to the food security is limited.