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Farm-level benefits to investments for mitigating land degradation: empirical evidence from Ethiopia

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  • Shiferaw, Bekele
  • Holden, Stein T.

Abstract

Resource conservation programs have often been launched without careful evaluation of farmers intertemporal tradeoffs in undertaking conservation investments. Such investments often have long pay back periods and reduce short-term household incomes. The critical question is whether long-term benefits would be sufficient to compensate farmers immediate costs. Lack of empirical data on crop responses to soil erosion has hindered policy-relevant research. This study uses empirical data from the Ethiopian highlands to estimate the damage from soil erosion and evaluate the profitability of proposed conservation investments. A farm-level model is developed to study economic incentives to implement proposed conservation methods. Results show that incentives to invest in conservation practices are very low except for low cost methods like grass strips. The yield penalty due to area loss and high investment costs contribute to this. Policies focusing on minimizing the area loss effect and subsidizing the initial investment costs are shown to improve farmers incentives to conserve the soil. A preferred policy option in the short-term is supporting low cost technologies that provide short-term benefits to poor farmers.

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Bibliographic Info

Article provided by Cambridge University Press in its journal Environment and Development Economics.

Volume (Year): 6 (2001)
Issue (Month): 03 (July)
Pages: 335-358

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Handle: RePEc:cup:endeec:v:6:y:2001:i:03:p:335-358_00

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Cited by:
  1. Hagos, Hosaena Ghebru, 2012. "Tenure (in)security and agricultural investment of smallholder farmers in Mozambique:," MSSP working papers 5, International Food Policy Research Institute (IFPRI).
  2. Holden, Stein & Barrett, Christopher B. & Hagos, Fitsum, 2006. "Food-for-work for poverty reduction and the promotion of sustainable land use: can it work?," Environment and Development Economics, Cambridge University Press, vol. 11(01), pages 15-38, February.
  3. Reynolds, Travis W. & Farley, Joshua & Huber, Candice, 2010. "Investing in human and natural capital: An alternative paradigm for sustainable development in Awassa, Ethiopia," Ecological Economics, Elsevier, vol. 69(11), pages 2140-2150, September.
  4. Pande, V.C. & Kurothe, R.S. & Singh, H.B. & Tiwari, S.P., 2011. "Incentives for Soil and Water Conservation on Farm in Ravines of Gujarat: Policy Implications for Future Adoption," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 24(1).
  5. Holden, Stein & Shiferaw, Bekele, 2004. "Land degradation, drought and food security in a less-favoured area in the Ethiopian highlands: a bio-economic model with market imperfections," Agricultural Economics, Blackwell, vol. 30(1), pages 31-49, January.
  6. Deininger, Klaus & Jin, Songqing, 2006. "Tenure security and land-related investment: Evidence from Ethiopia," European Economic Review, Elsevier, vol. 50(5), pages 1245-1277, July.
  7. Birungi, Patrick & Hassan, Rashid M., 2007. "Impact of Alternative Land Management Options on Soil Fertility and Erosion in Uganda," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(3), September.
  8. Oladeji, J.O., 2007. "Effect Of Land Degradation On Income Generating Activities Of Farmers In," Journal of Rural Economics and Development, University of Ibadan, Department of Agricultural Economics, vol. 16.
  9. World Bank, 2007. "The Cost of Land Degradation in Ethiopia : A Review of Past Studies," World Bank Other Operational Studies 7939, The World Bank.
  10. Ekbom, Anders & Brown, Gardner M. & Sterner, Thomas, 2009. "Muddy Waters: Soil Erosion and Downstream Externalities," Working Papers in Economics 341, University of Gothenburg, Department of Economics.
  11. Yirga, Chillot & Hassan, Rashid M., 2010. "Social costs and incentives for optimal control of soil nutrient depletion in the central highlands of Ethiopia," Agricultural Systems, Elsevier, vol. 103(3), pages 153-160, March.
  12. Ekbom, Anders, 2009. "Determinants of Soil Capital," Working Papers in Economics 339, University of Gothenburg, Department of Economics.
  13. Holden, Stein T. & Ghebru, Hosaena, 2011. "Household Welfare Effects of Low-cost Land Certification in Ethiopia," CLTS Working Papers 3/11, Centre for Land Tenure Studies, Norwegian University of Life Sciences.
  14. Jayasuriya, Rohan T., 2003. "Economic assessment of technological change and land degradation in agriculture: application to the Sri Lanka tea sector," Agricultural Systems, Elsevier, vol. 78(3), pages 405-423, December.
  15. S. Nedumaran & Beleke Shiferaw & M. Bantilan & K. Palanisami & Suhas Wani, 2014. "Bioeconomic modeling of farm household decisions for ex-ante impact assessment of integrated watershed development programs in semi-arid India," Environment, Development and Sustainability, Springer, vol. 16(2), pages 257-286, April.
  16. World Bank, 2007. "Determinants of the Adoption of Sustainable Land Management Practices and Their Impacts in the Ethiopian Highlands," World Bank Other Operational Studies 7938, The World Bank.
  17. Amsalu, Aklilu & de Graaff, Jan, 2007. "Determinants of adoption and continued use of stone terraces for soil and water conservation in an Ethiopian highland watershed," Ecological Economics, Elsevier, vol. 61(2-3), pages 294-302, March.
  18. Holden, Stein & Shiferaw, Bekele & Pender, John, 2004. "Non-farm income, household welfare, and sustainable land management in a less-favoured area in the Ethiopian highlands," Food Policy, Elsevier, vol. 29(4), pages 369-392, August.

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