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Economics of soil and water conservation

  • Bekele, Wagayehu
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    The Ethiopian highlands, inhabited by the vast majority of the Ethiopian human and livestock populations, are under continuous threat from soil erosion. Land degradation induced by soil erosion is considered to be among the major factors responsible for the recurrent malnutrition and famine problems in Ethiopia. Conservation efforts during recent decades have succeeded neither in triggering voluntary adoption of conservation practices nor in mitigating soil erosion problems. The purpose of this thesis is, therefore, to understand the socio-economic aspects underlying soil and water conservation decisions in the context of subsistence farmers in the Eastern Highlands of Ethiopia. In articles I, III, and IV, the farmers’ decision problem is modeled as a utility maximization problem, and econometric models are used to link the statistical model of observed data and the economic model. Stochastic dominance criteria are used, in article I, to determine whether adoption of a conservation practice results in higher expected grain yield and income and/or reduced variability. Limited dependent variable econometric models are used in articles III and IV in order to determine factors that influence farmers’ decisions on soil and water conservation, and their preference for types of development intervention. In article II, the decision problem is modeled as an intertemporal net benefit maximization problem, and a dynamic programming optimization model is applied to determine the optimal path of investment in soil and water conservation. Findings in article I suggest that conservation results in higher expected grain yield and income, but does not support the hypothesis that conservation unambiguously results in less variability than no-conservation. In article II, it is shown that the optimal path of investment in soil and water conservation depends on the discount rate and grain prices. The results also suggest that erosive agricultural practices yield higher return in the short-term, whereas conservation yields a higher and sustainable return in the long-term. The need to design incentive mechanisms that encourage farmers to have a longer planning horizon are among important suggestions proposed in articles I and II. Results, in article III, suggest that specific physical conditions of plots and socioeconomic characteristics of farm households influence the soil and water conservation decision behavior of farmers. Article IV suggests that the perceived priority of farmers with regard to agricultural problems and socio-economic characteristics, determines their preference for the type of development intervention. The results also suggest that there exists a complementarity between different interventions and hence a need to address them simultaneously to ensure a higher return from interventions. An important lesson to be drawn from articles III and IV is that differences in farming conditions and complementarities between policy programs need to be noted in any intervention program.

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    Paper provided by Swedish University of Agricultural Sciences, Department of Economics in its series Department of Economics publications with number 362.

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    Date of creation: Sep 2003
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    Handle: RePEc:sua:ekonwp:362
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    1. Lapar, Ma. Lucila A. & Pandey, Sushil, 1999. "Adoption of soil conservation: the case of the Philippine uplands," Agricultural Economics, Blackwell, vol. 21(3), pages 241-256, December.
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    6. Pender, John L. & Kerr, John M., 1998. "Determinants of farmers' indigenous soil and water conservation investments in semi-arid India," Agricultural Economics, Blackwell, vol. 19(1-2), pages 113-125, September.
    7. Shively, Gerald E., 1999. "Risks and returns from soil conservation: evidence from low-income farms in the Philippines," Agricultural Economics, Blackwell, vol. 21(1), pages 53-67, August.
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    9. Pender, John L. & Benin, Samuel, 2001. "Impacts Of Land Resdistribution On Land Management And Productivity In The Ethiopian Highlands," 2001 Annual meeting, August 5-8, Chicago, IL 20701, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Li, Guo & Rozelle, Scott & Brandt, Loren, 1998. "Tenure, land rights, and farmer investment incentives in China," Agricultural Economics, Blackwell, vol. 19(1-2), pages 63-71, September.
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    13. 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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    15. Shively, Gerald E., 1999. "Risks and returns from soil conservation: evidence from low-income farms in the Philippines," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 21(1), August.
    16. Pattanayak, Subhrendu & Evan Mercer, D., 1998. "Valuing soil conservation benefits of agroforestry: contour hedgerows in the Eastern Visayas, Philippines," Agricultural Economics, Blackwell, vol. 18(1), pages 31-46, January.
    17. Barrett, Scott, 1991. "Optimal soil conservation and the reform of agricultural pricing policies," Journal of Development Economics, Elsevier, vol. 36(2), pages 167-187, October.
    18. Christine A. Ervin & David E. Ervin, 1982. "Factors Affecting the Use of Soil Conservation Practices: Hypotheses, Evidence, and Policy Implications," Land Economics, University of Wisconsin Press, vol. 58(3), pages 277-292.
    19. David J. Walker & Douglas L. You, 1986. "The Effect of Technical Progress on Erosion Damage and Economic Incentives for Soil Conservation," Land Economics, University of Wisconsin Press, vol. 62(1), pages 83-93.
    20. Brasselle, Anne-Sophie & Gaspart, Frederic & Platteau, Jean-Philippe, 2002. "Land tenure security and investment incentives: puzzling evidence from Burkina Faso," Journal of Development Economics, Elsevier, vol. 67(2), pages 373-418, April.
    21. Dayuan Hu & Richard Ready & Angelos Pagoulatos, 1997. "Dynamic Optimal Management of Wind-Erosive Rangelands," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 327-340.
    22. Lapar, Ma. Lucila A. & Pandey, Sushil, 1999. "Adoption of soil conservation: the case of the Philippine uplands," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 21(3), December.
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