Amhara State Land Reform Unlocks Capital, But Stirs Fears of Rural Dispossession

May 4 , 2025. By AKSAH ITALO ( FORTUNE STAFF WRITER )

A far-reaching land reform bill in Amhara Regional State has entered the record books. The new law rewrites two decades of rural land rules and loosens some of the tightest restrictions on smallholder farmers.

The change allows farmers and pastoralists to do what had long been prohibited, where landholding certificates were not used as collateral, lease or sharecrop to outside investors under contracts, and transfer property to nonfamily heirs. Officials say the overhaul will pull long-neglected capital into agriculture, curb illicit land swaps at the urban outskirts and restore confidence in plots that feed the population.

“Farmers faced serious challenges accessing credit and using their land rights to secure services,” said Abebaw Abebe, a lawyer at the Ministry of Agriculture’s Land Administration Directorate. “This bill addresses those issues while giving women greater room to exercise their rights over land.”

Abebaw expects a jolt in productivity as holders invest in irrigation, seed and fertiliser once banks are willing to lend.

The 54-article bill replaces a 20-year-old regional law. Previous limits capped holdings at seven hectares in highland and temperate zones and 10hct in tropical areas. These caps no longer apply so long as cultivation fits regional master plans. The bill also hits violators with fines or prison terms that can run five years for illegal transfers or land invasions, revealing officials’ worries that liberalisation might invite speculators.

For the first time, farmers may bequeath or gift farmland to people outside the nuclear family or even outside agriculture. They can also sell assets fixed to the land, but only if at least 1,000Sqm remain intact after the sale, a nod to food security concerns. Creditors who seize collateralised certificates on default may lease or operate a plot for up to 10 years, a provision tied to a 2019 National Bank of Ethiopia's (NBE) rule that let movable assets secure loans, yet lingered on weak regional enforcement.

The bill opens another door for joint ventures with private investors. A farmer may contribute land, an investor cash and equipment, and both parties form a share company with terms running up to 30 years. Officials hope the structure attracts commercial farms without stripping owners of their title. Leasing outright is also greenlighted, ending a gray area that held back outside capital.

Polygamous households get explicit mention, where every spouse should be listed so that inheritance battles do not erupt.

“It aims to expand rights while protecting resources,” said Addisu Molla, legal head at the Land Bureau of the Amhara Regional State.

He called the reform “a step forward in empowering landholders” that should deter back-alley deals ringing fast-growing towns, where plots often change hands without paperwork.

However, the need for clarity is pressing. Ethiopia’s land registry is a patchwork. Roughly 50 million farm plots are agriculturally productive, with the government granting land-use right certificates for over 30 million of these plots. Data from the UN Food & Agriculture Organisation (FAO) disclosed that there were an estimated 12 million smallholder farming households last year, accounting for about 95pc of agricultural production. The average farm size is less than a hectare.

In Amhara Regional State, four million farmers are spread across 10 zones, with 18 million square meters of farmland, yet only 11 million are logged in the cadaster. The gap fuels disputes, clogs courts, and scares lenders.

A pilot that allowed certificates as collateral began in 2019 in Amhara, Oromia and Southern regional states. Since then, more than 50,000 farmers have borrowed nearly three billion Birr from the state-owned Commercial Bank of Ethiopia (CBE), and the Cooperative Bank of Oromia (Coop Bank). The sums are modest in a country of over 100 million but large in villages where farmers often borrow from neighbours at steep rates or sell livestock to buy seed.

Abebachew Gawe, 45, is one of these farmers cultivating two hectares in Fogera Woreda, Southern Gondar of the Amhara Regional State.

He grows rice, teff and rye, and he once secured a 50,000Br microfinance loan, which barely covered rising fertiliser costs.

“I had big dreams but couldn’t get enough financing,” he told Fortune.

Abebachew now wants to raise 1.5 million Br to process and resell crops. He hopes the new law will let him pledge his certificate and lease extra land to scale up.

“It could help me build a sustainable business,” he said.

Agriculture still drives Ethiopia. Roughly 95pc of cultivated land is tended by smallholders, who grow teff, maise and wheat yet struggle with credit, inputs and infrastructure. The sector accounts for about 32pc of GDP and 80pc of the country’s over four billion dollars in commodities exports. According to the World Bank, weak property rights across sub-Saharan Africa crimp yields and fuel conflicts, making low-cost registration urgent.

Habtamu Sitotaw, a land administration expert, welcomed the bill regional officials in the Amhara Regional State introduced, particularly after criticising a federal proclamation he found too vague. Allowing transfer to non-farming kin, he said, is “a step toward a more liberalised landholding system.” But he warned of pitfalls.

“Loosening restrictions may lead farmers to sell land and fall into poverty,” he said, noting that joint ventures often leave holders with tiny dividends while investors dictate use.

He urged a stronger judiciary and dedicated land benches for police deals.

“Without proper regulation, many farmers could end up destitute, landless or displaced,” he told Fortune.

Regional lawmakers tried to answer such fears with guardrails. Some of their restrictions include minimum sales rules, lease caps, mandatory written contracts, and criminal charges for forged certificates. Penalties for fraudulent transfers, tough by regional standards, stretch to years behind bars.

Behind the reform lies Ethiopia’s layered land tenure history. The 1995 Constitution vests all land in the state but grants use rights to citizens. Certificates issued from 2003 onward listed plot boundaries and names but barred outright sale or mortgage. Rural families could pass land only to children who farmed, leaving women and non-farming heirs vulnerable. Sharecropping thrived informally, often on handshake deals that collapsed in court.

The new statute in Amhara Regional State codifies sharecropping and sets standards for lease duration, rent, soil conservation, and dispute settlement. Contracts should meet regional land use plans, which map watersheds, pastures, and urban expansion. Officials say the rules will merge disparate bylaws, giving investors a single window.

PUBLISHED ON May 04,2025 [ VOL 26 , NO 1305]

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