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Social costs and incentives for optimal control of soil nutrient depletion in the central highlands of Ethiopia

  • Yirga, Chillot
  • Hassan, Rashid M.
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    This study analysed trade-offs between short- and long-term objectives of soil use by smallholder teff farmers in Ethiopia. Compared to socially optimal solutions it was found that smallholder farmers discount the future at higher private rates leading to overexploitation of soil nutrients. Current soil conservation efforts, however, are well above static optimization levels suggesting smallholder farmers consider the long-term (dynamic) costs of soil degradation. There is evidence of high social gains from better utilization of soil resources through appropriate policy such as tenure security, to improve incentives for smallholder farmers to adjust input use towards socially desirable dynamic optimization levels.

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    Article provided by Elsevier in its journal Agricultural Systems.

    Volume (Year): 103 (2010)
    Issue (Month): 3 (March)
    Pages: 153-160

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    Handle: RePEc:eee:agisys:v:103:y:2010:i:3:p:153-160
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    1. Holden, Stein T. & Shiferaw, Bekele & Wik, Mette, 1998. "Poverty, market imperfections and time preferences: of relevance for environmental policy?," Environment and Development Economics, Cambridge University Press, vol. 3(01), pages 105-130, February.
    2. Babu, S. . C & Hallam, Arne & Rajasekaran, B., 1995. "Dynamic Modeling of Agroforestry and Soil Fertility Interactions: Implications for Multi-Disciplinary Research Policy," Staff General Research Papers 5008, Iowa State University, Department of Economics.
    3. Brekke, Kjell Arne & Iversen, Vegard & Aune, Jens B., 1999. "Tanzania's soil wealth," Environment and Development Economics, Cambridge University Press, vol. 4(03), pages 333-356, July.
    4. Renan U. Goetz, 1997. "Diversification in Agricultural Production: A Dynamic Model of Optimal Cropping to Manage Soil Erosion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 341-356.
    5. Shiferaw, Bekele & Holden, Stein T., 2001. "Farm-level benefits to investments for mitigating land degradation: empirical evidence from Ethiopia," Environment and Development Economics, Cambridge University Press, vol. 6(03), pages 335-358, July.
    6. Shiferaw, Bekele & Holden, Stein, 1999. "Soil Erosion and Smallholders' Conservation Decisions in the Highlands of Ethiopia," World Development, Elsevier, vol. 27(4), pages 739-752, April.
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