LIFT: Land Investment for Transformation

Project description / objective

LIFT aims to improve the incomes of the rural poor, especially women and youth, and enhance economic growth through:

• second level land certification
• improved rural land administration
• improving farmers’ access to rural markets (land rental, access to finance and agriculture)

Market system focus

Rural land rental sector

To provide an efficient and equitable land rental market, anchored on the security provided by the new land certificate, allowing farmers (including the vulnerable) to actively engage in formal land rental transactions. This is based on the trust in and understanding of the procedures and regulations involved in land rental transactions. This allows the more productive farmers to access more land and increase its productivity.

Access to finance 

To improve smallholder farmers' access to financial services in rural areas as financial institutions - primarily microfinance institutions – accepting their land use right as a form of guarantee. Farmers are therefore also able to access a wider range of financial products, including agricultural micro-insurance and savings products. The new, better tailored financial products allow farmers to invest productively in their land and diversify their sources of income, reducing vulnerability and increasing resilience.

Environment and conservation agriculture

To improve smallholder farmers' access to a range of environmentally sustainable improved agricultural inputs through new and existing local private input retailers that also provide advisory services. Farmers become more productive and are able to produce higher quality products, increasing their incomes.

Programme interventions

Rural land rental sector

Objectives

• Improve coordination and information sharing in the land rental market
• Ensure formalisation and registration of land rental agreements
• Strengthen land rental policies, processes and procedures
• Change perception that renting out land is not safe and not accepted

Interventions

1. Introduce commercially viable rural land rental service providers (i.e. land brokers) that facilitate rental agreements for a fee.
2. Increase awareness of rural households on the importance of formalising land transactions to ensure tenure security and reduce risks. 
3. Improve policies and regulations for land rental and related markets through research, policy evidence and lessons learned. 
4. Enhance the capacity of stakeholders in the administrative and judicial formal dispute resolution system through updated training modules of judicial training institutions and undergraduate law studies.

Access to finance

Objectives

• Leverage the land certificate as a form of collateral to allow farmers to access individual-based loans
• Use the geo-spatial data of the new land certificate to develop new products that allow farmers to reduce the risk of accessing finance
• Explore new ways to generate financial resources that guarantee the sustainability of the Rural Land Administration System

Interventions

1. Develop a new agricultural individual loan product that uses the second level certificate as a form of collateral.
2. Develop a new micro insurance product to allow farmers to share risks and increase their willingness to invest in improved inputs.

Environment and conservation agriculture

Objectives

• Increase access of smallholder farmers to improved inputs and quality extension services
• Support input suppliers to develop and expand their distribution networks in rural areas
• Deepen farmer and extension officer understanding of the benefits of using improved inputs and integrated soil management practices 

Interventions

1. Develop and introduce environmentally sustainable input distribution models to increase access for smallholder farmers in remote locations.
2. Improve the awareness and usage of good agricultural practices by extension service providers and smallholder farmers. 

Notable results (systemic change, poverty impact)

Overview

LIFT improved the incomes of the rural poor, especially women and youth, as well as enhancing economic growth by:

• Producing 14m second level land rural certificates (SLLC) for rural households
• Enhancing Ethiopia’s rural land administration system and processes
• Improving farmers’ access to markets (land rental, access to finance and agriculture) so they can maximise the benefits of their improved tenure security. 

Rural land rental sector

Building on the new land certificate, LIFT developed a standard land rental contract (SLRC) and established public and private rural land rental service provision so that holders of the new land certificate could access a formalised and secure land rental market.

Key results at the end of the programme included:

• Over 26,500 land rental transactions had been formalised and registered. These transactions were facilitated by land rental service providers introduced by the programme using the standard land rental contract.
• Over 46,000 farmers benefited from the formalisation of their rental agreements through increased security, fewer disputes and more transparent transactions.
• 86 land rental service providers had been licensed and certified by government entities and could charge for their services. Training and certification continued to be undertaken by government entities after the end of the programme.
• Formalisation of land rental transactions was cascaded to 1,400 kebeles, covering 90 per cent of all kebeles across the 32 intervention woredas.
• Land rented with the standard land rental contract saw an average of a 74 per cent yield increase two years after the initial contract. Landlords also experienced a 30 per cent rise in rental income using land rental service providers and the standard rental contract. 
• The revised Amhara Rural Land Administration and Use Determination Proclamation (No. 252/2017) included the need to register all land rental transactions, regardless of their duration.

Access to finance

LIFT developed, in partnership with rural microfinance institutions, the first individual-based loan product that allowed rural farmers in Ethiopia to collateralise, for the first time ever, their land use right. LIFT also helped develop a new micro-insurance product to be bundled together with the new loan product. 

Key results at the end of the programme included:

• Over 20,000 loans awarded through 147 branches of eight microfinance institutions. This represented a total loan value of ETB 720.7 million (USD 16 M ). All loans were disbursed using the microfinance institutions’ own funds. 
• Microfinance institutions mobilised an additional ETB 58.1 million (USD 1.3 M) in savings through the individual loan product.
• Increased levels of financial inclusion as 86 per cent of borrowers had not accessed credit prior to the LIFT loan, neither formal nor informal. 
• Increased levels of investment into productive farming – 73 per cent of SLLC loan clients had increased investment in land or other off-farm economic activities.
• Conditions for successful expansion of the new product in place as amended Amhara Rural Land Administration and Use Determination Proclamation (No. 252/2017) includes the ability to use the right of use of land as collateral. This was also confirmed by National Bank of Ethiopia proclamation (Movable Property Security Right Proclamation No 1147/2019) which includes farmers’ land use right and their produce of land as acceptable forms of loan security.
• Multi-peril crop insurance product piloted successfully in different woredas and regions.

Environment and conservation agriculture

LIFT increased the availability of environmentally sustainable agricultural inputs in rural areas by incentivising private input suppliers to expand their distribution networks and sell directly to retailers at woreda-level. LIFT also worked with other market players to increase the understanding and application of good agricultural practices by agricultural experts, Development Agents (DAs) and smallholder farmers.

Key results at the end of the programme included: 

• 12 input suppliers developed new business models for the distribution of farmer-demanded agricultural inputs through 165 local input retailers. This ensured access of environmentally sustainable inputs in over 70 woredas. 
• 74 per cent of input retailer customer farmers reported having increased knowledge on the use of inputs due to the embedded services offered by input retailers.
• 87 per cent of customers stated that they were purchasing more of their inputs at the retailer store than before.
•  Approximately 75 per cent of input retailers estimated that their sales had increased by more than half because of the direct linkage with input suppliers.
• Over 25,000 smallholder farmers and around 200 extension officers were trained on good agronomic practices. 
• Customer farmers reported yield increases ranging from 45 - 87 per cent since almost half had not used the improved inputs before.

[final update, September 2021]

Related blogs

• Ignacio Fiestas on Is the MSD approach right to achieve policy change?
• Christina Mayr on Improving the economic benefits of landholders in Ethiopia
• Clara García Parra on From land tenure security to financial inclusion