Factors Affecting Land Rent for Large-Scale Agricultural Investment in Gamo Lowlands, Ethiopia

Abstract The paper examines factors affecting land rent in agricultural investment in the Gamo district, Ethiopia. The study considered all the 57 registered investors engaged in large-scale agriculture in the Gamo district. A multiple regression model was used to identify the factors affecting land rental price. The study revealed that the irrigation access of the investment site, categories of agriculture, annual operating cost of the investment, cluster of investment site and distance of investment site fromcentrdistrict centre(Arbamincn) were significantly influencing the agricultural land rent. The study suggested that policy makers should focus on issues which impedthe e performanthe ce of the rental market to contribute to further efficlarge-scalee large scale agricultu,ral investment including accessving road acesss and enhancing irrigation access. The study further suggests that the district should focus on producing the fruit and vegetable category of agriculture to make efficient use the rental market and benefit from the comparative advantage. The study also has an implication in encouraging investors by awarding longer lease periods, which motivates investors to contribute significant initial capital and use the land efficiently by paying a reasonable rent .