| dc.description.abstract | Numerous countries in the third world have since the end of 2007 experienced a sudden rise in foreign investment, more particular, farmland investment. The magnitude of these leases has shocked the international society, as many fear a new “neo-colonialism” or exploitation of the poor host nations.
This thesis analyzes some of the economical effects of large-scale farmland acquisition in Ethiopia. By the use of three different models: Harris-Todaro, monopsony and demand composition equilibrium model, I study some of the economical effects of large-scale farmland acquisition in Ethiopia such as rural-urban migration, employment opportunities, consequences of worldwide food price increase and agricultural technology investment.
Critiques fear the companies’ lack of attention for the local small-scale farmers and the environment could be of serious consequence. Chapter 2 discusses these issues and challenges in general, whereas, the focus of chapter 3 is Ethiopia, with a brief disclosure on the nations’ agricultural sector followed by a description of the current large-scale farmland investment.
Supporters for large-scale land acquisition have emphasized the prominence of employment opportunity, as a direct result, while the opponents are worried about the environmental damages, the right of the small-scale farmers, and the indigenous in the area, as they don’t seem to be much involved in negotiations and decisions made. The employment opportunities are limited as it is illustrated in section 4.1, with the reference to a monopsonistic firm. Involvement of the government is necessary to obtain a socio-economical efficient outcome.
Further, rural-urban migration increases caused by deprivation of land, this is discussed wit the use of Harris-Todaro in section 4.2. Moreover various policies with the intention of, preventing an escalating informal sector in the urban areas, are also delivered in the same section.
And lastly, the effect of a worldwide food price increase, which has been the main driving force for large-scale land acquisition, and the outcome of domestic investment in agricultural technology, is explored in the two last sections of chapter 4. The combination of rise in agricultural investment and food price increases has been looked upon on as a trade reform within the country, an analysis of welfare of the farmers and the capitalist follows. | eng |