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Production Function Analysis of Soil Properties and Soil Conservation Investments in Tropical Agriculture

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  • Ekbom, Anders
  • Sterner, Thomas
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    Abstract

    This paper integrates traditional economic variables, soil properties, and variables on soil conservation technologies in order to estimate agricultural output among small-scale farmers in Kenya’s central highlands. The study has methodological and empirical, as well as policy, implications. The key methodological finding is that integrating traditional economics and soil science is valuable in this area of research. Omitting measures of soil capital can cause omitted-variables bias because a farmer’s choice of inputs depends both on the quality and status of the soil plus other economic conditions, such as availability and cost of labor, fertilizers, manure, and other inputs. The study shows that models which include soil capital and soil conservation technologies yield a considerably lower output elasticity of farmyard manure, and that mean output elasticities of key soil nutrients, such as nitrogen and potassium, are positive and relatively large. Counter to expectations, the mean output elasticity of phosphorus is negative. Soil conservation technologies (green manure and terraces, for example) are positively associated with output and yield relatively large output elasticities. The central policy implication is that while fertilizers are generally beneficial, their application is a complex art, and more is not necessarily better. The limited local market supply of fertilizers, combined with the different output effects of nitrogen, potassium, and phosphorus highlight the importance of improving the performance of input markets and strengthening agricultural extension. Further, given the policy debate on the impact (and usefulness) of government subsidies on soil conservation, the results suggest that soil conservation investments contribute to an increase in farmers’ output. Consequently, government support for appropriate soil conservation investments arrests soil erosion, prevents downstream externalities, such as siltation of dams, rivers, and coastal zones, and helps farmers increase food production and food security.

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    Bibliographic Info

    Paper provided by Resources For the Future in its series Discussion Papers with number dp-08-20-efd.

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    Date of creation: 15 Jun 2008
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    Handle: RePEc:rff:dpaper:dp-08-20-efd

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    Related research

    Keywords: micro-analysis of farm firms; resource management;

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    1. Fulginiti, Lilyan E. & Perrin, Richard K., 1998. "Agricultural productivity in developing countries," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 19(1-2), September.
    2. Widawsky, David & Rozelle, Scott & Jin, Songqing & Huang, Jikun, 1998. "Pesticide productivity, host-plant resistance and productivity in China," Agricultural Economics, Blackwell, vol. 19(1-2), pages 203-217, September.
    3. Sherlund, Shane M. & Barrett, Christopher B. & Adesina, Akinwumi A., 2002. "Smallholder technical efficiency controlling for environmental production conditions," Journal of Development Economics, Elsevier, vol. 69(1), pages 85-101, October.
    4. Gerdin, Anders, 2002. "Productivity and economic growth in Kenyan agriculture, 1964-1996," Agricultural Economics, Blackwell, vol. 27(1), pages 7-13, May.
    5. Simmons, Peter & Weiserbs, Daniel, 1979. "Translog Flexible Functional Forms and Associated Demand Systems," American Economic Review, American Economic Association, vol. 69(5), pages 892-901, December.
    6. Byiringiro, Fidele & Reardon, Thomas, 1996. "Farm productivity in Rwanda: effects of farm size, erosion, and soil conservation investments," Agricultural Economics, Blackwell, vol. 15(2), pages 127-136, November.
    7. Jacoby, Hanan G., 1991. "Productivity of men and women and the sexual division of labor in peasant agriculture of the Peruvian Sierra," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 265-287, November.
    8. Mundlak, Yair & Larson, Don & Butzer, Ritz, 1997. "The determinants of agricultural production : a cross-country analysis," Policy Research Working Paper Series 1827, The World Bank.
    9. Obare, G. A. & Omamo, S. W. & Williams, J. C., 2003. "Smallholder production structure and rural roads in Africa: the case of Nakuru District, Kenya," Agricultural Economics, Blackwell, vol. 28(3), pages 245-254, May.
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