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In Ethiopia, expropriation and compensation measures have become a great concern due to horizontal urban expansion and development induced projects. Especially in peri-urban areas, the livelihood of farmers is affected by expropriation without fair and comparable compensation. This paper investigates the impacts of expropriation and compensation activities on livelihood of peri-urban smallholders taking Debre Markos Town as a case study area. Mixed research methods were employed. Quantitative data were gathered using a structured questionnaire and by interviewing about 100 smallholders. Qualitative data were collected in focus group discussions and by analyzing legal documents. The analysis showed a high trend of expropriation without fair and appropriate compensation as result of ignoring legal procedures of expropriation and compensation. Expropriated farmers also complained that they did not get any support from the government to use compensation money properly for further investments. Due to incomparable compensation and lack of advice, peri-urban farmers faced multi-faceted problems, such as food insecurity and social and family disintegration. The government has to enable families of expropriated households to earn suitable livelihood, which could be achieved by fair compensation and appropriate guidance.
