Contents lists available at ScienceDirect Land Use Policy journal homepage: www.elsevier.com/locate/landusepol Take out the farmer: An economic assessment of land expropriation for urban expansion in Bahir Dar, Northwest Ethiopia Wubante Fetene Admasu a,b, ⁎ , Steven Van Passel b,c , Amare Sewnet Minale d , Enyew Adgo Tsegaye e , Hossein Azadi b,f , Jan Nyssen f a Department of Land and Real Property Valuation, Bahir Dar University, Yibab campus, PO Box 5001, Bahir Dar, Ethiopia b Department of Engineering Management, University of Antwerp, Stadscampus, Prinsstraat 13, 2000, Antwerp, Belgium c Centre for Environmental Sciences, Hasselt University, Belgium d Department of Geography and Environmental Studies, Bahir Dar University, Wisdom Tower, PO Box 79, Bahir Dar, Ethiopia e Department of Natural Resource Management, Bahir Dar University, Wisdom Tower, PO Box 79, Bahir Dar, Ethiopia f Department of Geography, Ghent University, 9000, Gent, Belgium ARTICLE INFO Keywords: Land expropriations Urban expansion Compensation Previous land users Bahir Dar Ethiopia ABSTRACT In Ethiopia, the demand for land for urbanisation is primarily met by converting rural land through ex- propriation. However, land expropriations are adversely affecting the previous land users by reducing the amount of production and their sources of income. In Bahir Dar, one of the fastest-growing cities in Ethiopia, approximately 300 landholdings are expropriated each year, on average, for urban expansion. This paper as- sesses the land expropriations to examine whether they offer economically appropriate compensation for the previous land users. Land expropriations for urbanisation between 2007/2008 and 2016/2017 were analysed based on data on land expropriation and its compensation payment obtained from the Bahir Dar City Land Administration and Management Office. Data were analysed using an exponential growth model and a stochastic budgeting technique in which Monte Carlo simulations are performed. Between 2007/2008 and 2016/2017, more than 1500 ha of land were included in the city’s boundary through expropriation from 2900 landholders. The affected farmers received compensation that represents only 37 per cent of the value of current crop yields and its growth. The current compensation scheme ignores the impact of inflation on the prices of crops and assumes constant yields. It also excludes the value of crop residuals. We propose a workable discounted com- pensation framework that considers crop price and yield growths. This will make the compensation scheme more appropriate and make the affected farmers better off. 1. Introduction Globally, urbanisation is growing due to population growth and rural-urban migration (Angel et al., 2011; Jiang, 2015). An estimated 54.5 per cent of the world’s population resided in urban settings in 2016. By 2030, urban areas are projected to accommodate 60 per cent of the world population, and the urban population of developing countries will double (UN, 2016). These facts have strengthened the argument that, in the future, most urban growth will occur in smaller cities and towns (Cohen, 2004). In 2000, the urban land was estimated to cover 213 million hectares, which is 2.06 per cent of the earth’s surface. By 2040, these figures could increase to 621 million hectares, or 4.72 per cent of the earth’s surface, causing a reduction of almost 65 million tons of crop production in 40 years (van Vliet et al., 2017). Eastern Africa is the world’s least urbanised but fastest urbanising sub- region. It is projected that by the end of the current decade, the urban population of this area will have increased by 50 per cent and that the total number of urban dwellers in 2040 will be five times that of 2010 (UN-Habitat, 2014). Ethiopia’s level of urbanization is low but growing rapidly; nearly 20 per cent of the country’s total population currently reside in urban and peri-urban areas (CSA, 2016). Projections indicate that the number of urban population will reach 27–30 per cent of the total population by 2025 and 40 per cent by 2037 (MUDHo, 2015). The rising demand for urban land due to urbanization is primarily met by converting rural land at the periphery of the existing built-up area (Mohan, 2011; UN-Habitat, 2010). In China, for instance, 3.63 million ha of farm land is predicted to be converted in to urban land through expropriation when China’s urbanisation reaches 50 per cent (Tan and https://doi.org/10.1016/j.landusepol.2019.104038 Received 7 November 2018; Received in revised form 19 May 2019; Accepted 4 June 2019 ⁎ Corresponding author at: University of Antwerp, ENM-B124-Stadscampus, prinsstraat 13, 2000, Antwerp, Belgium. E-mail address: WubanteFetene.Admasu@uantwerpen.be (W.F. Admasu). Land Use Policy 87 (2019) 104038 0264-8377/ © 2019 Elsevier Ltd. All rights reserved. T