Quantifying the direction and magnitude of spillovers for small holders is an essential part of the policy dialogue surrounding large-scale agricultural investment. We use intertemporal variation in smallholders’ proximity or intensity of exposure to large farms, while exploring the variation in large farm establishment over time and space, to analyze the presence and magnitude of spillovers between large and small farms.
Findings show that between 2004 and 2014 new formation of commercial farms did not contribute to job creation and provided at best modest benefits for neighbouring smallholders in terms of technology and access to inputs. This implies that in Ethiopia a more strategic approach may be required to maximize smallholder benefits from large farm formation. Our methodology has proven to be robust and can be applied to study spill over effects of large-scale commercial farming more generally. Avenues to do so are outlined.
This work is part of ‘The Role of Agriculture and Rural Development in Ending Poverty and Boosting Shared Prosperity’ project
Ali, Daniel, Klaus Deininger, and Anthony Harris, 2018, Does Large Farm Establishment Create Benefits for Neighboring Smallholders? Evidence from Ethiopia, World Bank Land Governance Policy Brief.
Does Large Farm Establishment Create Benefits for Neighboring Smallholders? Evidence from Ethiopia