Price policy and returns to soil conservation in semi-arid Kenya

Abstract

This paper develops an approach that uses relatively easily-available data to examine empirically how policy-induced price changes affect the incentives of farmers in developing countries to adopt soil conservation measures. The model shows that there is no simple relationship between price distortions created by government policies and farmers' incentives to adopt conservation measures. Policy-induced price changes could lead to either more or less conservation, depending on site-specific conditions. Data from a semi-arid region in Kenya are used to illustrate the magnitude and direction of changes in price policy on returns to terracing and to show how results are affected by the nature of the conservation technology. In the study area, higher commodity prices increase incentives to adopt conservation measures on steep slopes, but lower them on shallower slopes. If terraces were to require more land to be taken out of production than assumed in the calculations, higher commodity prices would tend to discourage farmers from adopting them.