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Determinants of farmers' indigenous soil and water conservation investments in semi -arid India

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  • Pender, John L.
  • Kerr, John M.

Abstract

This paper investigates the determinants of farmers' indigenous soil and water conservation investments in the semi-arid tropics of India. A simple theoretical model is used to develop hypotheses about the determinants of investment under alternative factor market conditions, and these are tested using data on conservation investment from three villages. We find that conservation investment is significantly lower on leased land in two of the study villages and lower on plots that are subject to sales restrictions in one village, suggesting the potential for land market reforms to increase conservation investment. In one village, households with more adult males, more farm servants, and less land invest more in conservation, as predicted by the model of imperfect labor markets; and households with more debt and off-farm income invest more, consistent with the model of imperfect credit markets. Evidence that conservation investment is affected by factor market imperfections is weaker in the other villages, where investments are much larger, suggesting transaction costs as the source of the differences between villages. Other factors that have a significant effect on investment include the farmer's education and caste, characteristics of the plot (size, slope, irrigation status, and quality ranking) and the presence of existing land investments. The results suggest the importance of accounting for differences across communities and households in factor market and agroclimatic conditions in designing programs to promote investments in soil and water conservation. © 1998 Elsevier Science B.V. All rights reserved.

Suggested Citation

  • Pender, John L. & Kerr, John M., 1998. "Determinants of farmers' indigenous soil and water conservation investments in semi -arid India," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 19(1-2), September.
  • Handle: RePEc:ags:iaaeaj:174545
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    1. Clay, Daniel C. & Byiringiro, Fidele Usabuwera & Kangasniemi, Jaakko & Reardon, Thomas & Sibomana, Bosco & Uwamariya, Laurence & Tardif-Douglin, David, 1995. "Promoting Food Security in Rwanda Through Sustainable Agricultural Productivity: Meeting the Challenges of Population Pressure, Land Degradation, and Poverty," Food Security International Development Papers 54054, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Pender, John L. & Kerr, John M., 1996. "Determinants of farmers' indigenous soil and water conservation investments in India's semi-arid tropics:," EPTD discussion papers 17, International Food Policy Research Institute (IFPRI).
    3. Pender, John L., 1996. "Discount rates and credit markets: Theory and evidence from rural india," Journal of Development Economics, Elsevier, vol. 50(2), pages 257-296, August.
    4. Norris, Patricia E. & Batie, Sandra S., 1987. "Virginia Farmers' Soil Conservation Decisions: An Application Of Tobit Analysis," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 19(01), July.
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    9. Fafchamps, Marcel & Pender, John, 1997. "Precautionary Saving, Credit Constraints, and Irreversible Investment: Theory and Evidence from Semiarid India," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 180-194, April.
    10. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    11. Allen M. Featherstone & Barry K. Goodwin, 1993. "Factors Influencing a Farmer's Decision to Invest in Long-Term Conservation Improvements," Land Economics, University of Wisconsin Press, vol. 69(1), pages 67-81.
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