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Poverty, Resource Scarcity and Incentives for Soil and Water Conservation: Analysis of Interactions with a Bio-economic Model

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  • Shiferaw, Bekele A.

Abstract

The paper examines the interlinkages between population pressure and poverty, possible impacts on household welfare and land management, and the consequent pathways of development in a low potential rural economy. A dynamic non-separable bio-economic model, calibrated using data from the Ethiopian highlands, is used to trace key relationships between population pressure, poverty and soil fertility management in smallholder agriculture characterized by high levels of soil degradation. Farm households maximize their discounted utility over the planning horizon. Land, labor and credit markets are imperfect. Hence, production, consumption and investment decisions are jointly determined in each period. The level of soil degradation is endogenous and has feedback effects on the stock and quality of the resource base. This may in turn influence land management choices. Under high population pressure, land becomes dearer relative to labor. This is likely to induce conservation investments, especially when conservation technologies do not take land out of production. When markets are imperfect, poverty in vital assets (e.g., oxen and labor) limits the ability or the willingness to invest in conservation and may lead to a less sustainable pathway. Boserup-type responses are more likely when (privately) profitable technologies exist and market imperfections do not limit farm-households' investment options.

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  • Shiferaw, Bekele A., 2003. "Poverty, Resource Scarcity and Incentives for Soil and Water Conservation: Analysis of Interactions with a Bio-economic Model," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25819, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae03:25819
    DOI: 10.22004/ag.econ.25819
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    5. Templeton, Scott R. & Scherr, Sara J., 1999. "Effects of Demographic and Related Microeconomic Change on Land Quality in Hills and Mountains of Developing Countries," World Development, Elsevier, vol. 27(6), pages 903-918, June.
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