# **1. Introduction**

A popular view of Africa, in contrast to, say Asia, is that land on the continent is plentiful, so that everybody can access it. Yet, while this may hold true at a continental level, there are enormous differences across countries with some, most notably Rwanda with 384 inhabitants/km<sup>2</sup> overall and 526/km<sup>2</sup> of agricultural land, approaching or even surpassing levels of population density that are normally thought of to be more common in Asia. In fact, while there is land available for expansion in Africa, most of it is concentrated in few countries (Deininger and Byerlee 2012), often with poor access to infrastructure and low levels of profitability (Chamberlin _et al._ 2014). Together with technology-induced limits on farmers’ ability to expand cultivated area and increased demand for African land from outsiders (Arezki _et al._ 2013; Schoneveld 2014), this implies that in many African countries, farm households have to adjust to higher levels of land scarcity, either through investment and intensification of production or by greater reliance on off-farm income, possibly alongside greater land rental market participation (Headey and Jayne 2014). While studies highlight broad trends and response options, a description of such trends from a micro-perspective and the policy issues underpinning them has thus far been missing.

To fill this gap, this paper draws on unique household-level data from six countries (Ethiopia, Malawi, Niger, Nigeria, Tanzania, and Uganda). We aim to explore three issues, namely (i) the distribution of land ownership and associated inequality as well as landlessness; (ii) the extent of land rental market activity (including potential gender bias in such activity); and (iii) the factors associated with land market participation interpreted in light of the structural transformation of Africa’s economies. While they may miss out some large holdings, our data, collected under the LMS-ISA project, are representative of each country’s smallholder sector, have land area measured using GPS as compared to farmers’ estimates to reduce measurement error, include information on plot managers’ and often owners’ gender, and are geo-referenced to allow links to infrastructure.

If land is scarce and part of the population will be better off moving out of agriculture, markets will have an important role in helping to bring land to its most productive use. This has often been taken to imply that land markets will be less important if land is relatively abundant, equally distributed, and the economy’s level of diversification remains low. Instead, markets will gradually assume greater importance with specialization and the emergence of a sizeable non-agricultural sector in the course of economic development. In such an evolutionary scenario, land rental is likely to predominate to enable households or individuals to take up employment outside the agricultural sector. Land transfers through sales will become important only as the economy develops and entrepreneurs need to raise capital by selling land directly or by using it as collateral in credit markets and mortgagebased financing.

From a policy perspective, empirical evidence on market functioning based on household- or farm-level data is important in two respects. First, with evidence of factor market imperfections (Dillon and Barrett 2014), it is of 2