Economics of soil and water conservation

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

Maize and Wheat; Strategic crops to fill Ethiopia's food basket

Poster prepared for a share fair, Addis Ababa, May 201

A critical analysis of the Ethiopian Commercial Code in light of OECD Principles of Corporate Governance

This dissertation critically analyzes whether the current Ethiopian share company law (part of the Commercial Code) envisaged such outcomes or not by using the six key minimum standards of OECD Principles of corporate governance as a template. It demonstrates how the legal and regulatory framework of the share company law provisions apparently has failed to create incentives for market players and also failed to promote transparent and efficient market. To smooth the progress of new investment and provide adequate investors’ protection, this dissertation recommends Ethiopia should revisit and update its share company law in light of the relevant OECD Principles by taking into account its own legal, economic and cultural circumstances

Poverty, Resource Scarcity and Incentives for Soil and Water Conservation: Analysis of Interactions with a Bio-economic Model

The paper examines the interlinkages between population pressure and poverty, possible impacts on household welfare and land management, and the consequent pathways of development in a low potential rural economy. A dynamic non-separable bio-economic model, calibrated using data from the Ethiopian highlands, is used to trace key relationships between population pressure, poverty and soil fertility management in smallholder agriculture characterized by high levels of soil degradation. Farm households maximize their discounted utility over the planning horizon. Land, labor and credit markets are imperfect. Hence, production, consumption and investment decisions are jointly determined in each period. The level of soil degradation is endogenous and has feedback effects on the stock and quality of the resource base. This may in turn influence land management choices. Under high population pressure, land becomes dearer relative to labor. This is likely to induce conservation investments, especially when conservation technologies do not take land out of production. When markets are imperfect, poverty in vital assets (e.g., oxen and labor) limits the ability or the willingness to invest in conservation and may lead to a less sustainable pathway. Boserup-type responses are more likely when (privately) profitable technologies exist and market imperfections do not limit farm-households' investment options.Resource /Energy Economics and Policy,

Optimal barrier subdivision for Kramers' escape rate

We examine the effect of subdividing the potential barrier along the reaction coordinate on Kramers' escape rate for a model potential. Using the known supersymmetric potential approach, we show the existence of an optimal number of subdivisions that maximises the rate.Comment: 8 pages, 3 figures, To appear in Pramana - J. Phys, Indi

Investments in Land Conservation in the Ethiopian Highlands: A Household Plot-Level Analysis of the Roles of Poverty, Tenure Security, and Market Inventives

Land degradation is a major problem undermining land productivity in the highlands of Ethiopia. This study explores the factors that affect farm households’ decisions at the plot level to invest in land conservation and how much to invest, focusing on the roles of poverty, land tenure security, and market access. Unlike most other studies, we used a double-hurdle model in the analysis with panel data collected in a household survey of 6,408 plots in the Amhara region of Ethiopia. The results suggest that the decisions to adopt land conservation investment and how much to invest appear to be explained by different processes. Poverty-related factors seem to have a mixed effect on both the adoption and intensity decisions. While a farmer’s adoption decision is influenced by whether or not the plot is owner-operated (a measure of risk for the immediate period), intensity of conservation is determined by expectation of the certainty of cultivating the land for the next five years (a measure of risk for the longer term), farmer’s belief of land ownership, and distance from plot to home.Ethiopia, land conservation, poverty, tenure security

The transformation of the Afar commons in Ethiopia: State coercion, diversification and property rights change among pastoralists

"The major economic activity for pastoralists is animal husbandry. The harsh environment in which herders raise their livestock requires constant mobility to regulate resource utilisation via a common property regime. In contrast to the mobile way of life characterizing pastoralism, agriculture as a sedentary activity is only marginally present in the lowlands of the Afar regional state in Ethiopia. Nevertheless, this study reveals a situation where the traditional land-use arrangements in Afar are being transformed due to the introduction of farming. In the past, the Imperial and the Socialist governments introduced large-scale agriculture in a coercive manner, thereby instigating massive resistance from the pastoralists. Currently, the recurrence of drought in the study areas has facilitated the subdivision of the communal land on a voluntary basis for the purpose of farming. Qualitative and quantitative analysis highlight the drivers, both coercive and non-coercive, of the transformation of traditional property rights of Afar pastoralists." authors' abstractPastoralism, livestock, Property rights, Rangeland management, Communal land, Environmental management,