Let the farmer decide: examining smallholder autonomy in large-scale land acquisitions with an agent-based model

Large-scale land acquisitions (LSLAs) can facilitate agricultural intensification in low- and middle-income countries, but they frequently dispossess smallholders of their land and thereby generate tradeoffs between market-oriented production and smallholder livelihoods. Given the global prevalence of LSLAs, it is important to understand how they can be structured to reconcile these goals. This paper focuses on contract farming (CF) as a means to reorient LSLAs to more effectively support smallholder land rights and food security. We develop an agent-based model of mixed crop-livestock smallholder livelihoods and calibrate it using household survey data from four LSLAs in Ethiopia. We apply the model to examine smallholder food security and regional productivity under three conditions representing increasing smallholder autonomy over land management: LSLA with smallholder displacement, LSLA with forced CF, and opt-in CF. Our modeling results indicate that supporting smallholder land rights through CF can mitigate the tradeoffs generated by LSLA-induced displacement. LSLAs that implemented a CF scheme improved food security and generated comparable productivity increases to LSLAs with displacement. Further, allowing smallholders to decide whether to participate in a CF scheme (i.e. avoiding land acquisition) resulted in greater alignment between the two outcomes, particularly due to improved food security for poorer households. Our results suggest that to realize these benefits it is important to ensure contract compliance and thereby maintain smallholder trust in the contracting firm. Thus, LSLA governance that fosters smallholder agency, empowerment, and security of land rights could contribute to sustainable development.