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Agricultural GDP in Ethiopia grew at an average 7.3 percent per year between 2001/02 and 2012/13. Most of this dynamism occurred in the highlands, where high population density and land scarcity begs the question of how future agricultural output can be maintained to sustain the previous decade’s momentum. This paper uses a spatial regression approach to calculate the maximum crop area potential of each kebele in Ethiopia. We find that although the highlands have a greater potential for cropped area, there is little room to expand. A substantial share of the highlands has limited economic potential to expand the land base devoted to agriculture. In fact, many areas may be reaching an environmental threshold that will require the local agricultural land area to contract to maintain the agricultural productivity outcomes realized in previous years.
