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The dynamics of soil degradation and incentives for optimal management in the Central Highlands of Ethiopia

In Ethiopia, as in the rest of sub-Saharan Africa, soil degradation (decline in soil quality due to topsoil loss and net nutrient extraction) has become the most important natural resource problem imposing on-site costs to individual farmers in terms of reduced yield and off-site costs to society as a result of externalities. Excessive soil loss rates reaching over 100 tons/ha on croplands are not uncommon. Much worse, the amount of nutrients extracted from the soil through cropping is estimated to be several folds the nutrient inputs added to the soil in the form of organic and inorganic nutrients. Consequently, per capita food production, income and savings have been falling. Nonetheless, despite the seriousness of soil degradation problems and its negative consequences on food security and income to individual households and the nation at large, the magnitude of the threat that soil degradation poses on current as well as future income and how best to address the problem is not well known. The few available estimates based on static models that do not account for the inter-temporal use of the soil capital indicate the importance of the soil degradation problem but could not provide the full costs that continued soil degradation will have on the country’s economic development. Furthermore, the attention provided to the analysis of soil conservation adoption and soil nutrient management practices to date is minimal. This thesis, therefore, using an inter-temporal optimisation framework analysed the tradeoffs of soil University of Pretoria etd – Tizale, C Y (2007)