The Effects of Ethiopia’s Investment Policy and Incentives on Smallholding Farmers

Nowadays developing countries are highly attracting foreign investors especially who have food and biofuel energy demands. Surprisingly, the hostage country like Ethiopia, and coming in investors have similar interests. Ethiopia opened the door for investors laying primary objectives: to gain foreign currency, technology exchange, creating job opportunity, and food security. The country designed the investment policy toward drawing in investors with red carpet incentives in the investment policies and legal documents and transferred an earmark 7 million hectares of smallholding farmers’ land. However, the objectives laid above left only being paper value without bringing into effect the promises. Nevertheless, the government inclined its focus only on earning foreign currency encouraging the investor to export or supply their product to the exporter. The article explores the issue at hand with the policy implementation theories, concepts, approaches, government documents and other references through thoroughly reviewed literature the effects the smallholding farmers facing under the investment policy and incentives. The article revealed that the challenges the smallholders facing under investment plan is worse than their past status quo. The policy and incentives favor the investors than smallholders and local people; dispossessing and displacing them from their land, lacks them food security, unemployment, low wage and sociocultural problems which resulted in reaction against the investors, crop fields, companies with fierce protests and resistances.