LAND USE AND PERFORMANCE OF LARGE-SCALE AGRICULTURAL INVESTMENT IN SOUTH WEST ETHIOPIA REGIONAL STATE

Abstract

Recently Ethiopia’s open-door policy has encouraged investment aimed at improving agriculture, deriving economic development, and promoting technology transfer to local communities (MoA Policy, 2024). The South West Ethiopia favorable conditions, particularly agro-ecological and regional stability, attracted more investors. However, there is noticeable limited empirical studies on land use and performance of Large-scale Agricultural Investment in the region. This study seeks to address this gap in the literature by examining the investment patterns, employment contribution, and investment challenges in agriculture in South Western Ethiopia (SWETH). Capital investment trends, export earnings, employment prospects, and land use by regions are investigated using descriptive and inferential statistics. This study found that a significant variation in the investment pattern, with Bench Sheko and Konta being highly skewed and large-scale investments (LSAIs), while Sheka and West Omo depict relatively even trends. LSAIs dominate export-oriented tea and coffee markets, possessing huge regional market share. The finding of this study also show production system in the region is under the threat of climate risks due the reliance on rain-fed farming and the lack of well-established irrigation infrastructures. In additions, infrastructural constraints, poor access to finance, natural factors (floods and droughts) and lack of skill and managerial are key challenges facing Agricultural investors in the region. To address these challenges, this study recommends the extension of irrigation infrastructure and increased employment opportunities, enhanced access to markets, investments diversification, and development research and technology adoption. Finally, the study advocates for the adoption of gender-sensitive policies, improved financial access, and strengthen stakeholder’s collaboration to foster inclusive and sustainable agricultural investment.