This is a chapter in a book entitled "The Emergence of Land Markets in Africa Impacts on Poverty, Equity, and Efficiency" edited by Stein Holden, Keijiro Otsuka and Frank Place, 2009.
Despite various policy barriers related to access and transfers of land in Ethiopia, farmers have a long history of renting land through sharecropping and fixed rent contracts. Sharecropping is a type of land lease contract where the tenant and landlord share the final output as compensation for the labor supplied by the tenant and the land supplied by the landlord. This chapter empirically studies the land rental contracts in Southern Ethiopia for variation in cost-sharing arrangements and factors explaining them. It evaluates whether resource-pooling or relative bargaining power explains this variation.
The findings indicate that diversity of land rental contracts largely reflects rational adjustments in the environment of rural economies characterized by market imperfections in land, labor, credit and insurance markets, variation in household resource endowments, and land quality.
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