Economics of Soil and Water Conservation: The Case of Smallholder Farmers in North Eastern Highlands of Ethiopia

It is generally believed and supported by empirical evidence that both technology adoption and improving production efficiency increase production. The objective of the study was to examine the determinant of adoption of improved Soil and Water Conservation (SWC) technologies mainly stone bund and soil bund in two districts of North east highlands of Ethiopia. Multinomial Logit model was
employed to study farmers’ decision to adopt improved SWC technologies. The results of the study provided empirical evidence of the
positive impact of education, extension service, severity of soil erosion and economic efficiency in enhancing the adoption of improved SWC technologies to increase production. The result showed that adopters of improved SWC practice had better efficiency as compared to non-adopters. Physical characteristics like distance from farmers’ home to markets, roads, and plot played a critical role in the adoption of improved SWC technologies as proximity to information, sources of input supply and markets save time and reduce transportation costs. Given the critical role of proximity to such centers and better roads for promoting adoption and productivity gains, the effort of investment in improved roads infrastructure should be improved to achieve increased production. Production decision of farm household either to be more efficient or less efficient was also significant for likelihood of adoption of improved SWC technologies. Results of the analyses suggest that there is more research focus on improved SWC technology adoption decision and production decision of the farm household.