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Tropical forest provides a crucial portion of sustenance in many rural communities, although it is increasingly under pressure from appropriations of various scales. This study investigated the impacts of medium-scale forestland grabbing on local livelihoods and forest conservation in the southwestern highlands of Ethiopia. Data were generated through interviews, discussions and document review. The results indicate that state transfer of part of the forestland since the late 1990s to investors for coffee production created in situ displacement- a situation where farmers remained in place but had fully or partially lost access to forest- that disrupted farmers’ livelihoods and caused conflicts between them and the investors. Court cases about the appropriated land and related imprisonment, inflicted financial and opportunity costs on farmers. Farmers considered the livelihood opportunities created by the companies insufficient to compensate for loss of forest access. Companies’ technology transfers to farmers and contributions to foreign currency earnings from coffee exports have not yet materialized. Forest conservation efforts have been negatively affected by deforestation caused by conversion to coffee plantations and by farmers’ efforts to secure rights to forestland by more intensive use. The medium-scale forestland grabbing has been detrimental to farmers’ livelihoods and forest conservation in a way that recalls criticism of large- and mega-scale land grabbing since 2007–2008. The overall failure to achieve the objectives of transferring forestland to investors highlights a critical need to shift institutional supports to smallholders’ informal forest access and management practices for better development and conservation outcomes.
