The great rural land mirage

The following article is written by Mekonnen Solomon, a former Director of Horticultural Investment, Ministry of Agriculture in Ethiopia.

Since the contentious question of whether land should be transferred to private ownership or remain under state control hit the Ethiopian National Dialogue Commission’s agenda, it has ignited a wildfire of controversy. As I observe the landscape, society remains deeply concerned, caught in a relentless cycle of suspicion, hope, and fear as they debate this issue.

On one hand, advocates for state ownership continue to assert, just as they have for decades, that privatizing rural land risks relegating peasants to a state of serfdom reminiscent of the feudal era. They fear that a wealthy elite will aggressively buy and take over peasant land holdings, leaving rural populations destitute and unemployed, thereby violating the rights of various ethnic groups and social segments. Proponents of this view insist that farmers lack the necessary property knowledge, and if permitted to sell, they would blindly squander their land and revert to servitude.

However, many scholars now reject this view. They argue that the idea that farmers can’t handle private property is a condescending trap. It wrongly assumes that farmers are not smart enough to manage their own business or make good decisions for their families. In reality, these experts point out that when farmers are given legal freedom to control their own land, they have proven to be excellent managers of their own resources.

Conversely, free-market advocates argue that building a modern agricultural economy absolutely requires removing land from rigid state control, allowing it to be bought and sold like any other asset. They argue that it is highly insincere for the government to aggressively liberalize services, foreign exchange, banking, and insurance, while simultaneously keeping rural land, the most critical tool of agricultural production, locked away from market mechanisms.

Alternatively, some observers interpret this shift as a calculated political move. The Prosperity Party is keen to distance itself from the EPRDF’s rigid dogma, which famously vowed that land would remain under state control at all costs.

© Mekonnen Solomon

Meanwhile, others contend that Ethiopia’s agricultural economy landscape is complex. They argue that the nation’s urgent aspiration to join the World Trade Organization, along with significant pressure from international financial institutions such as the World Bank and the IMF, serves as a crucial motivator. This perspective highlights that the sluggish growth of the agricultural economy is often attributed to the lack of rural land as a tradable private asset, which hinders investment and development in the sector.

Yet, from my seasoned perspective, this “untouchable” agenda extends far beyond these macroeconomic and political clashes. Having spent many years involved in agricultural project and program work across the Amhara region, I have witnessed firsthand how issues related to land are deeply intertwined with the fundamental dignity of human beings.

The devastating reality is that for the past thirty years, following the fall of the Derg Regime, rural farmers have faced significant barriers to accessing reliable capital, which is essential for modernizing agriculture and the procurement of necessary farm inputs. Many experts highlight that the government’s stringent rural land policy has effectively restricted farmers from leveraging their most stable asset as collateral for vital loans. This policy, framed under the principle that “land is public property and cannot be sold or traded,” has hindered their ability to secure the financial support needed for growth and development.

After the fall of the Derg Regime, private financial institutions were finally given the opportunity to venture into rural areas. However, they quickly took a step back, refusing to extend loans, citing the blatant inability to use peasant land as collateral because of legal limitation and the lack of clarity regarding legal measures if a farmer was not able to pay back or defaulted. At the time, this was a shocking event that caused the government great anxiety.

To plug this financial gap, the government initiated “Rural Credit Associations,” which evolved into microfinance institutions, such as the Amhara Credit and Saving Cooperative.

These associations were capitalized through regional endowment funds derived from the annual budget allocated to districts (Woredas), essentially using public development funds as collateral for the lenders.

Inevitably, this fragile process collapsed into a severe crisis as many farmers became unable to repay their loans. The government’s draconian solution was to force rural development workers, agricultural staff, and local community leadership to coerce farmers into repaying their loans, even by seizing their movable assets or, failing that, by imprisoning them. It is a sophisticated and dark irony that this unusual and disturbing approach dragged not only development and agricultural workers but also courts, which were supposed to act independently, into actions they did not want to take.

The bitter truth surfaces here: in any part of the world, fixed property is a tool that liberates human labour from the crushing weight of interest or debt obligations. Imprisoning a person’s conscience and labour for failing to repay a loan is not only illegal but a disgraceful and undignified practice. International standards, including the International Covenant on Civil and Political Rights (ICCPR), generally prohibit imprisonment for failure to fulfill a loan contractual obligation. When a system does this, it violates the dignity of the human being.

As the situation escalated, government-backed lending institutions introduced the “Group Lending Model,” blindly copied from Bangladesh without carefully examining its social consequences. Global experience—specifically from studies in Bangladesh and elsewhere—clearly warns that such models, when imposed without land security, trigger catastrophic social outcomes. This model required farmers to form credit groups, with each member serving as a guarantor. If one member defaulted, the other guarantors were obligated to cover the debt.

The social implication was devastating: this burden often forced guarantors to seize the land of the defaulting farmer as compensation, leading to an involuntary and shadowy land transfer process. This exploitative cycle catalysed the marginalization of poor peasants; those who could no longer meet debt obligations were forced into poverty, becoming laborers for more affluent farmers or compelled to migrate to urban areas. While initial land distributions averaged 0.5 hectares per household, this systemic failure allowed holdings to expand to 5, 10, or 15 hectares for a few, often those celebrated as “model farmers” but who were, in reality, beneficiaries of the illegal consolidation of poor farmers’ land.

This system has profoundly damaged professional integrity, forcing agricultural experts to act as debt collectors and jailers rather than mentors. Very recently, the state has rolled out comprehensive land use and administrative proclamations and land use right certificate schemes. While this is a positive initiative, the land issue is not merely a dry economic matter; it is a fight to liberate farmers from the cruel, regressive practices inherited from an era of debt-bondage.

My burning question is: will the upcoming national dialogue take this systemic nightmare into account and hold a comprehensive discussion, or will it be tragically reduced to a narrow, paralyzing debate about ethnic rights?

For more information
Mekonnen Solomon
Email: [email protected]