Returns to Farm‐Level Soil Conservation on Tropical Steep Slopes: The Case of the Eritrean Highlands

Bereket Araya and John Asafu‐Adjaye
Authors registered in the RePEc Author Service: John Asafu-Adjaye

Journal of Agricultural Economics, 1999, vol. 50, issue 3, 589-605

Abstract: This study conducts an economic analysis of investment in simple soil conservation technologies in the highlands of Eritrea. The data used in the analysis were obtained from a farm survey and supplemented with data from secondary sources. Risk analysis techniques are used to take account of the uncertainties regarding the relationship between soil erosion and crop yield. The financial analysis reveals negative net present values (NPVs) and internal rates of return (IRRs) below 12 per cent for various slope categories. On the other hand, the economic analysis returns positive NPVs and IRRs of over 20 per cent. The results clearly indicate that investment in soil conservation technology may not be a viable short‐term proposition from the farmer's point of view and yet the net social benefits are positive. There is a strong case for government to provide incentives for soil conservation in view of the economic benefits.

Date: 1999
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