The Economic Cost of Environmental Degradation: A Case Study of Agricultural Land Degradation in Ghana

Abstract

Land is a key environment and natural resource assets in Agriculture. It is also the case that the viability of arable land has a direct relationship with productivity. Land degradation caused by soil erosion is a major threat to the sustainability of agriculture. Soil erosion is one of the main forms of land degradation in Ghana, a problem that has been studied and researched by numerous scholars both local and abroad. Since 2006, the agricultural sector’s contribution to Gross Domestic Product has declined, possibly because of the negative effects of land degradation i.e. soil erosion challenges among others. The paper assesses the cost of land or soil degradation in the Agricultural Sector and its effect on the economy of Ghana with focus on the on-site effects of soil erosion on agricultural productivity. The study draws on the productivity loss and nutrient replacement cost approaches in estimating the cost of soil degradation in the agricultural sector. The results show the Northern region as the most prone to soil degradation, and that the real cost of agricultural soil degradation as a percentage of real Gross Domestic Product is approximately 2.5% on average, for a 4 year period from 2006 to 2012, which is equivalent to approximately GH¢ 964.92 million in monetary terms. The Sustainable Land Management (SLM) practices would be key in efforts to mitigate land degradation; enhancing agricultural biodiversity, and reducing poverty. SLM should thus be implemented particularly in the northern part of the country.