The political-economy of land acquisition and privatization of Birr and Ayehu Farms in Amhara Region, North-West Ethiopia

Commercial agricultural land acquisition has intensified globally since the 1990s with policy liberalization, shifting land from smallholder use to export-oriented farming. In Ethiopia, large-scale farms began under the imperial regime and expanded during the Derg through nationalization and state farms; after 1991, the EPRDF pivoted from smallholder intensification to commercial investment (PASDEP), accelerating dispossession. The paper intervenes in a contested debate: some argue dispossession undermines local wellbeing, while others claim it promotes development and food security. The authors argue that uncritical establishment and privatization of commercial farms harms local livelihoods and erodes state-society relations, as investors prioritize export over local needs. Focusing on Birr (Jabi Tehnan, West Gojjam) and Ayehu (Ayehu Guagusa, Awi) farms—sites of recurring grievance and turmoil—the study asks: (i) what are the politics of land acquisition, the privatization process, and their influence on local livelihoods, and (ii) how can the voices of dispossessed farmers be documented?

The paper situates Ethiopia’s land acquisition within broader global trends of neoliberal policy shifts fostering large-scale investments (Borras & Franco, 2012), with debates over whether such investments re-entrench feudal-like exploitation (Rahmato, 2011; Belachew, 2013) or enhance development and food security (Ababa, 2006; Shete, 2011). Ethiopian agrarian history includes imperial modernization, Derg socialist state farms, and EPRDF-era liberalization. Prior studies examined large-scale transfers (Rahmato, 2011), impacts on smallholders (Araya, 2013), and cases like flower farms in Bahir Dar Zuria (Alamineh & Eneyew, 2021) and Gura Ferda (Addisu, 2016). However, gaps remain regarding the micro-politics and lived experiences of dispossessed farmers in specific domestic acquisitions, especially Birr and Ayehu, whose land was appropriated before compensation laws. The political economy of domestic land acquisition and privatization in Ethiopia remains underexplored (Cotula, 2012; Keeley et al., 2014).

Design: Mixed-methods approach integrating quantitative household survey with qualitative interviews, focus group discussions (FGDs), and document review, enabling triangulation and thematic integration. Study sites: Jabi Tehnan (Birr farm) and Ayehu Guagusa (Ayehu farm) districts in Amhara National Regional State, purposively selected due to proximity and influence of farms. Sampling: From four adjacent kebeles and 16 villages (proportionally), 150 households were selected via simple random sampling. Data collection: Household survey (20 January–21 May 2019) measured landholdings, livelihood assets (cattle, sheep, goats, beehives), crop production, and perceptions of state-society relations. Twenty-four key informant interviews were conducted with knowledgeable local community members, officials, and scholars. Four FGDs were held with adjacent communities, with culturally sensitive facilitation; sessions were note-taken and audio recorded with oral informed consent. Secondary sources included historical archives, government reports, Ethio-Agri-CEFT documents, and scholarly literature. Analysis: Quantitative data were summarized using descriptive statistics and presented via tables and graphs. Qualitative data were coded and analyzed thematically. Integration: Quantitative and qualitative findings were jointly analyzed under identified themes to address the research questions.

Origins and expansion: Birr (est. 1978) and Ayehu (est. 1982) began as Derg-era state-owned enterprises under socialist policy (proclamations 31/1975; 20/1975), with unilateral land dispossession of adjacent communities without consent or compensation. Post-privatization acceleration: Farms were privatized to Ethio-Agri-CEFT in 2000 under privatization proclamation 146/1998. Surveyed households (100%) affirmed: state ownership before privatization; expansion through eviction pre-privatization; government-led eviction at commencement; expansion beyond demarcated boundaries after privatization; and that land was not taken with community consent. Scale of enclosure: Birr expanded from 946 ha to approximately 11,000 ha (Beyene, 2011); Ayehu from 46 ha to about 6,688 ha (Kassahun, 2018), annexing pasture, forest, and farmland, with no compensation paid. Governance, legality, and transparency: Privatization was centrally decided with limited regional involvement and documentation, lacking clarity on land size and lease duration; Ethio-Agri-CEFT operated for years without a formal land-use contract and failed to pay land use tax, while importing tax-exempt inputs. Sale contract discrepancies: Farms were sold for $12,500,000; only $9,374,600 was paid, leaving $3,125,400 unpaid, suggesting embezzlement or misappropriation. Ownership clarified by a 2018 ANRS committee: Ethio-Agri-CEFT (shared by MIDROC and Sheikh Mohammed Hussein Al-Amoudi) owns the farms, fueling perceptions of neo-patrimonial capture. Security and coercion: The company organized informal security forces implicated in intimidation, kidnapping, and imprisonment of opponents, allegedly with tacit support across government hierarchies. Livelihood impacts: • Landholding decline: Mean farmland size fell from 3.69 ha to 0.55 ha over 15 years; current distribution: 26% <0.25 ha, 43.3% 0.26–0.5 ha, 12% 0.51–0.75 ha, 18.7% >0.75 ha; mean family size 7.95. • Livestock and beekeeping: Mean cattle owned fell from 12.65 to 1.906; beehives from 6.906 to 0.55; sheep/goats from 6.82 to 0.64. Households engaged in honey production dropped from 78.7% to 14%; 97.3% reported reduced milk cows; 88% no longer rear sheep/goats due to pasture loss. • Crop production: Mean annual crop output declined from 68.95 to 12.06 quintals over 15 years. Drivers cited include landlessness, unlawful annexation, land shortage, and land-use change. State-society relations: 100% of respondents agreed that farms harmed state-society relations, created local grievances, triggered conflicts with the investor, and caused community distrust and negative attitudes toward government. Political ramifications included protests, destruction of property, blockage of agricultural product transport, injuries, imprisonment, and deaths, especially around Birr farm.

The findings substantiate the study’s thesis that the establishment and privatization of commercial farms, conducted through top-down policies and opaque practices, undermined local livelihoods and corroded state-society relations. Land acquisition proceeded via state-enabled dispossession both under Derg and intensified post-privatization, reflecting a neo-patrimonial political economy where party-affiliated investors leveraged federal discretion and weak regional oversight. Quantitative evidence of drastic declines in farmland size, livestock assets, beekeeping, and crop production demonstrates livelihood incompatibility with large-scale commercial operations, exacerbated by chemical use, burning of crop residues, and enclosure of commons. Politically, coercive enforcement and the perception of crony ownership (MIDROC/EFFORT networks) fueled grievances, distrust, and unrest, aligning with broader literature on how exclusionary land governance and opaque privatizations provoke resistance. These results highlight the risks of market-led agricultural expansion absent transparent contracts, consent, compensation, and inclusive benefit-sharing, and they underscore the need for legal compliance by investors and empowered regional institutions to mediate land allocations.

EPRDF-era neoliberal reforms accelerated large-scale commercial farming, repurposing land from smallholders to export-oriented ventures under the rationale of development and food security. Birr and Ayehu farms, initiated as state enterprises and privatized to Ethio-Agri-CEFT via opaque processes, exemplify how neo-patrimonial privatization and weak governance produce livelihood dispossession, land-use change, and social polarization. The study documents extensive land annexation without consent or compensation, legal distortions (missing contracts, unpaid taxes, sale payment gaps), and coercive practices, resulting in severe reductions in farmland, livestock, beekeeping, and crop outputs, and in adversarial state-society relations marked by protests and violence. The authors conclude that Ethio-Agri-CEFT should be bound by ANRS laws and adopt inclusive, legally compliant practices to safeguard public interest and sustainability. More broadly, transparent privatization, clear land-use agreements, restitution/compensation mechanisms, and participatory governance are essential to prevent lopsided development and restore legitimacy.