Soil degradation is a major global environmental problem, having widespread and serious negative effects on water quality and biodiversity and promoting the emission of climate changing greenhouse gases. The chemical and physical deterioration of soils severely compromises agricultural productivity and the incomes of some of the poorest members of the global society. According to the International Food Policy Research Institute's calculations, soil degradation affects the productivity of of 40 percent of the world's agricultural land on average, with rates up to 75 percent for some regions. A primary cause of soil degradation is soil depletion associated with farming. Although farmers themselves may benefit from higher levels of soil quality, it has proven difficult to achieve the changes in farm management practices necessary to reach this goal. How farmers make decisions about the management of soil resources and the constraints they face is an issue that is still not well understood. At the same time, understanding this process is a critical requirement for improving policy-making for sustainable development. The issue is particularly important in the context of rural poverty, as improving the quality and productivity of soil resources is often a key component of rural poverty alleviation, and because poverty is a major determinant of the way in which people make decisions about resource use.
In the two papers presented in this volume the relationship between socio-economic conditions and soil degradation is explored using both qualitative and quantitative approaches. In the first paper by Lipper, the focus is on providing a better understanding of the incentives and constraints faced by poor farmers in making soil management decisions. The first part of the paper focuses on the relationship between soil degradation and agricultural productivity. The findings indicate that the farm level costs associated with soil depletion are quite heterogeneous across varying soil types and cropping patterns, as are the costs associated with reversing or decreasing the process of degradation. The second part of the paper describes the major findings in the economic literature on the impact of varying manifestations of poverty on soil resource management. One important way in which poverty influences the incentives of producers to invest in soil resources is by increasing the value to the farmer of a secure food or income source. Since poor farmers are exposed to higher levels of risk, measures which decrease production variability may have a greater value to them, thus creating incentives to invest in soil conservation. At the same time, poor producers have less capacity to insure in formal markets and the means they adopt to manage their risk may result in disincentives to soil resource investments, particularly those which are lumpy and not easily liquified. Other barriers to investment such as instability in property rights regimes and lack of access to financial services were found to be significantly higher amongst poor producers. However, the evidence on the relationship between soil resource endowments and socio-economic conditions was found to be inconclusive at present, with a need for further studies in order to determine whether this issue is a significant disincentive to soil resource investment among the poor. The paper concludes with a discussion of the research needs which are implied by the information gaps identified throughout the analysis.
The second paper in the volume by Osgood and Lipper addresses one of the research gaps identified in the first paper: the causal relationships between socio-economic conditions and soil degradation.
This paper discusses the methodological issues which arise in conducting such an analysis through an applied example in which econometric analysis of socio-economic and geographic information systems data is performed. In particular, issues of endogeneity in the analysis of dynamic systems, and the integration of data across varying scales are raised, and empirical examples for their treatment are presented.
William H. Meyers
Director
Agriculture and Economic
Development Analysis Division
