Programme Index Listing

Location
Ethiopia
Main implementer
DAI
Other implementers
Nathan Associates (market systems component) / NIRAS
Donor
FCDO
Duration
2013 - 2021
Total budget
USD $99.4 million (market systems: $13.6 m)
Contact
LIFTinfo@liftethiopia.com
External links
LIFT on DevTracker
LIFT website

Project description / objective

LIFT aims to improve the incomes of the rural poor, especially women and youth, as well as enhance 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.

Market system focus

1. Rural land rental sector

An efficient and equitable land rental market, anchored on the security provided by the Second Level Land Certificate (SLLC). Farmers, including those from Vulnerable Groups (VGs), actively engage in formal land rental transactions based on 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 their productivity.

2. Access to finance

SLLC farmers have improved access to financial services in rural areas as financial institutions - primarily Microfinance Institutions (MFIs) - offer a selection of SLLC-linked financial products in their rural branches (credit, insurance, savings). This allows them to invest productively in their land and diversify their sources of income, reducing vulnerability and increasing resilience.

3. Environment and Conservation Agriculture

SLLC farmers have improved access to a range of environmentally sustainable improved agricultural inputs through local private input retailers that also provide advisory services. Farmers are able to produce higher quality products and sell them at a premium.

Programme interventions

1. 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. Introduction of commercially viable rural land rental service providers (i.e. land brokers)
  2. Increase awareness of rural households on the importance of formalising land transactions
  3. Generate evidence to improve policies and regulations for land rental and related markets
  4. Enhance the capacity of stakeholders in the administrative and judicial formal dispute resolution system

2. Access to finance

Objectives

  • Leverage the land certificate as a form of collateral to allow farmers to access individual-based loans
  • Use the SLLC geo-spatial data 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 SLLC as collateral
  2. Develop a new micro insurance product that reduces the risk of farmers when taking an SLLC loan
  3. Promote partnerships in finance to overcome risk and sector limitations

3. 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. Development and introduction of environmentally sustainable input distribution model
  2. Promote use of small irrigation systems and appropriate agricultural machinery
  3. Facilitate delivery of non-commercial Good Agricultural Practices (GAP) and information to farmers

Notable results (systemic change, poverty impact)

1. Rural land rental sector

Building on the SLLC, LIFT has developed a Standard Land Rental Contract (SLRC) and established public and private rural land rental service provision so that SLLC holders can access a formalised and secure land rental market.

Key results include:

  • As of October 2020, around 24,000 land rental transactions have been formalised and registered at the local land office, all using the standard land rental contract format developed by LIFT
  • Over 41,500 farmers have benefited from the formalisation through increased security, fewer disputes and more transparent transactions
  • Licensing and payment pilot for land rental service providers (LRSPs) (i.e. land brokers) has now been launched in all four regions with a total of 26 LRSPs having attained their licenses so far
  • The formalisation of land rental transactions has now been cascaded to a total of 536 kebeles (covering 90 per cent of all kebeles) across the 32 intervention woredas
  • Land rented with the SLRC 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 through the use of the SLRC and LRSPs
  • Change in the Amhara Rural Land Administration and Use Determination Proclamation (No. 252/2017) includes the need to register all land rental transactions, regardless of their duration

2. Access to finance

LIFT has developed the first individual, SLLC-linked loan product that allows rural farmers in Ethiopia to go beyond income smoothing and invest in productive agriculture. LIFT is partnering with MFIs who are adapting the new loan product and are proactively investing in its expansion.

Key results include:

  • Established active partnerships and signed Memorandums of Understanding (MOUs) with 8 MFIs
  • 139 branches from the 8 partner MFIs are actively disbursing the loan product
  • 19,033 loans issued, with approximately ETB 591 million ($15 m) that have been disbursed as of October 2020 (funded through MFIs own liquidity)
  • MFIs mobilised over ETB 50.8 million ($1.3 m) in savings through the individual loan product
  • Increased levels of investment into productive farming - 73 per cent of SLLC loan clients have increased investment in land or other off-farm economic activities
  • Increased diversification and spreading of risk as approximately 37 per cent of male and 32 per cent of female loan clients are investing in off-farm economic activities (including animal fattening, purchase of a horse-cart etc.)
  • Amended Amhara Rural Land Administration and Use Determination Proclamation (No. 252/2017), that now includes the ability to use the right of use of land as collateral
  • Ratified proclamation from the National Bank of Ethiopia on usable assets for collateral (Movable Property Security Right Proclamation No 1147/2019) in 2019, which includes farmers’ land use right and their produce of land as acceptable forms of loan security
  • Piloted a multi-peril crop insurance product in a couple of woredas in Amhara proving the concept for hybridised crop insurance products.

3. Environment and Conservation

The availability of environmentally sustainable agricultural inputs for Ethiopian farmers is low. To increase supply LIFT is working with private input suppliers to expand their distribution networks and sell directly to retailers at woreda-level. LIFT also builds the capacity of agricultural experts, Development Agents (DAs) and farmers to increase their knowledge of good agricultural practices.

Some results include:

  • 141 local input retailers are actively promoting and selling agricultural inputs in rural areas
  • Partnership agreed with ten suppliers/importers of inputs that have allowed them to develop and expand their distribution networks
  • 74 per cent of input retailer customer farmers report having increased knowledge on the use of inputs due to the training offered by retailers
  • 87 per cent of customers stating that they are now purchasing more of their inputs at the retailer store than before
  • Approximately 75 per cent of input retailers estimate that their sales have increased by more than half because of the direct linkage with input suppliers
  • 25,565 farmers have been trained on good agronomic practices
  • Customer farmers report yield increases ranging from 45 - 87 per cent since almost half had not used the improved inputs before

[updated January 2021]

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