Economics of Land Degradation and Improvement in Ethiopia

Abstract

Land degradation is an important problem in Ethiopia, with more than 85 % of the land degraded to various degrees. Recent estimates using satellite imagery show that land degradation hotspots over the last three decades cover about 23 % of the land area in the country. The assessment of nationally representative household survey shows that important drivers of sustainable land management in Ethiopia are biophysical, regional and socio-economic determinants. Specifically, access to agricultural extension services and markets and secure land tenure are important incentives to adoption of sustainable land management practices. Thus, policies and strategies relating to securing tenure rights, building the capacity of land users through access to extension services, and improving access to input, output and financial markets should be considered in order to incentivize sustainable land management. Important local level initiatives and institutions to manage grazing lands and forests through collective action should also be encouraged. We use the Total Economic Value approach (TEV) to estimate the cost of land degradation in Ethiopia. The annual cost of land degradation associated with land use and cover change in Ethiopia is estimated to be about $4.3 billion. Only about 51 % of this cost of land degradation represents the provisioning ecosystem services. The remaining 49 % represent the loss of supporting and regulatory and cultural ecosystem services. Use of land degrading practices in maize and wheat farms resulted in losses amounting to $162 million—representing 2 % equivalent of the GDP in 2007. The costs of action to rehabilitate lands degraded during the 2001–2009 period through land use and cover change were found to equal about $54 billion over a 30-year horizon, whereas if nothing is done, the resulting losses may equal almost $228 billion during the same period. Thus, the costs of action against land degradation are lower than the costs of inaction by about 4.4 times over the 30 year horizon; implying that a dollar spent to rehabilitate degraded lands returns about 4.4 dollars in Ethiopia.