1. Institutional economics of sustainable land: The case of smallholder the
eastern Africa highlands
Joseph Tanui
Dr Rolf Groeneveld
Dr Jeremiahs Mowo
Dr Jeroen Klomp
Prof Ekko

2. Overview
•This paper forms part of
a study on the “scaling
up of sustainable land
management in the
eastern Africa highlands”
•Specifically the study
contributes towards
understanding of “the
institutional economics
of sustainable land
management in
smallholder
communities”.

3. Scale perspectives
Systems International treaties, food security and climate change
perspectives
Vertical and horizontal integration of the biophysical and social
Landscapes
economic
Watershed Local governance, biodiversity , common property regimes
Farm Agricultural productivity, land tenure , income and expenditure
flows
Plot Crop productivity, nutrient cycling, soil (fertility, depth, slope)
Tree Tree tenure, Niche compatibility and multipurpose use

4. A work in progress
Institutional economics of sustainable land management research
has produced the following outputs (papers):
1. Rural household income diversification effects on sustainable land
management in smallholder farming systems: The case of the eastern
Africa highlands
2. Rural household energy poverty and natural resource degradation effects
under intense land pressure: the case of smallholder farming systems
from Vihiga district of western Kenya
3. Social networks and investments in sustainable land management
practices by smallholder farmers of the east African highlands: A spatial
analytical approach
4. Role of poverty in constraining investments in sustainable land
management: Modelling an institutional perspective through GAMS

5. Rural household energy poverty and natural resource
degradation effects under intense land pressure: the case
of smallholder farming systems from Vihiga district of
western Kenya

6. Understanding the poverty environment nexus
• Smallholders as duo economic agents facing simultaneously
the following major objectives (Shiferaw et al., 2009b):
– Improving productivity
– Sustaining the natural resource base
• Rural households and village incomes, land use and
investment strategies determine the links between
environment and poverty (Reardon and Vosti, 1995)
• Poverty is usually treated as a single concept, rarely asked is
how particular poverty types influence the poverty –
environment link
• The combination of rural poverty and natural resource
degradation has become a big problem world wide (Kaygusuz,
2011)

7. Poverty environment nexus
• Rural household energy costs are predominant in household
decision making (Hosier and Kipondya 1993);
– Biomass fuels are becoming scarce and conventional fuels
expensive
• Decreasing land asset base has increasingly made rural
household energy costs a predominant limiting factor
(Wamukunya,2004)
• Smallholder agricultural development is considered essential
for food security and poverty reduction(Janvry, 2010)
• Smallholder production depends heavily on environmental
production conditions that are largely exogenously
determined (Sherlund et al., 2002)

8. Poverty manifestation in East Africa
• Widespread failures in soil fertility replenishment and soil and
water conservation are characteristic of majority of smallholder
farmers in sub-Saharan Africa (Reardon, 2001; Sanchez, 2001; World bank,
2003);
• Increasing population and reduced farm productivity has over time
elicited a culture of agricultural expansionism with disastrous
effects;
• In most rural areas, communities predominantly depend on a
dwindling supply of wood and other biomass fuels for most of their
household and income generating activities(Kaygusuz, 2011).

9. Conceptual framework
• The study utilizes the notion of sustainable land management
as a framework for examining link between poverty and
environment
• It addresses a specific type of poverty attributed to specific
environmental changes for guiding food security, poverty and
environmental policies
• Describes various household energy uses amongst
households for indications of fuel transitions based on a
diminishing land resource base

10. Conceptual framework
From Figure (next slide):
• The deployment of assets into flows of welfare
constitute a household decision making
strategy
• Each strategy maps a stock of assets into
flows of welfare based on underlying
production, exchange mechanism, market and
non market resource allocation arrangement

12. Energy poverty definitions
• Fuel poverty has been named and defined broadly by at least
early 80s (Bradshaw and Hutton, 1983);
• Defined specifically to cover households whose fuel
expenditure on all energy services exceed 10% of their
income (Boardman,1991);
• Energy poverty defined as the lack of access of households in
developing countries to modern energy sources and their
consequent reliance on solid biomass fuels for cooking
(Temilade,2012);
• The definition of fuel poverty line as the average energy
consumption of all households whose overall per capita
consumption expenditure level falls within 10% of the official
expenditure poverty line (Foster,et. al.,2000).

13. Study methodology
A cross-section household survey involving a stratified random sampling
procedure is undertaken in Vihiga district.

14. Sampling framework
• Village lists of households were made up based on the 2009
national census lists
• From the list every 9th household member was interviewed
• Total number of households interviewed were 320
• Plot level soil sampling and analysis were undertaken in 490
farm plots
• A structured survey questionnaire was used to collect
biophysical and social economic data
• Community level and district level information was collected
through focus group meetings
• Desk top research was also undertaken

17. Developing a household energy poverty line

18. Econometric model specification

19. Econometric model specification

20. Percentage of farmers that practise specific off farm income source
Firewood
59.87%
Charcoal
Firewood
Fishing
Fodder
Charcoal Forest honey
Fodder
5.92% 7.24% Quarrying
Fishing, 0.66%
Sand Harvesting
Timber Timber
15.79%
Tree Nurseries
Tree Nurseries
Forest honey
3.95% 1.32%
Quarrying
Sand Harvesting
3.95%
1.32%

22. Average incomes from off farm
50000
46,655
40000
33,902
30000
Average Incomes in KSH 23,267
20000
16,458
13,222
10000
6,250
3,200 3,183
1,000
0
Charcoal Firewood Fishing Fodder Forest honey Quarrying Sand Timber Tree
Harvesting Nurseries
Non farm income sources

23. • Iteration 0: log likelihood = -202.50971
• Iteration 1: log likelihood = -143.44867
• Iteration 2: log likelihood = -137.20523
• Iteration 3: log likelihood = -137.08014
• Iteration 4: log likelihood = -137.0801
• Iteration 5: log likelihood = -137.0801
•
• Probit regression Number of obs = 320
• LR chi2(21) = 130.86
• Prob > chi2 = 0.0000
• Log likelihood = -137.0801 Pseudo R2 = 0.3231
•
• ------------------------------------------------------------------------------
• energypove~1 | Coef. Std. Err. z P>|z| [95% Conf. Interval]
• -------------+----------------------------------------------------------------
• houtyp1 | -.4132279 .4990427 -0.83 0.408 -1.391334 .5648778
• houtyp3 | -.990162 .4531941 -2.18 0.029 -1.878406 -.1019178
• houtyp4 | -.0988006 .1616808 -0.61 0.541 -.4156891 .218088
• houtyp5 | -.0447391 .1726639 -0.26 0.796 -.3831542 .293676
• age_of_hou~d | .0095144 .0025852 3.68 0.000 .0044476 .0145812
• distanceto~t | -.0024877 .0157836 -0.16 0.875 -.0334229 .0284475
• Annualliab~y | 9.74e-06 .0000309 0.32 0.752 -.0000508 .0000702
• bankaccount | .161946 .2738648 0.59 0.554 -.3748192 .6987112
• transpmeans | -.0517002 .2126315 -0.24 0.808 -.4684502 .3650499
• ln_ConserM~e | -.0287324 .0629331 -0.46 0.648 -.152079 .0946142
• ln_Totalfe~t | .0117501 .0341482 0.34 0.731 -.0551793 .0786794
• ln_Labourc~t | -.0163353 .030041 -0.54 0.587 -.0752146 .042544
• ln_Totalot~t | .0007071 .0748632 0.01 0.992 -.146022 .1474362
• ln_butaneg~t | .0667856 .1163831 0.57 0.566 -.1613212 .2948923
• ln_paraffi~t | -.0303671 .041268 -0.74 0.462 -.111251 .0505168
• ln_charcoa~t | -.0016212 .031774 -0.05 0.959 -.0638971 .0606546
• ln_firewoo~t | -.980223 .1582336 -6.19 0.000 -1.290355 -.6700908
• ln_cropres~t | -.21957 .1082903 -2.03 0.043 -.431815 -.0073249
• ln_nrmincome | -.0231404 .018847 -1.23 0.220 -.0600798 .013799
• ln_offfarm~e | .1466268 .0202787 7.23 0.000 .1068812 .1863723
• ln_Totalfa~e | .057411 .0967658 0.59 0.553 -.1322465 .2470686
• _cons | 8.246764 1.550185 5.32 0.000 5.208457 11.28507
• ------------------------------------------------------------------------------
• Note: 0 failures and 1 success completely determined.
•

24. Probit regression
Variable Description Coefficient
Household Characteristics
houtyp1 Dummy Female headed household -0.4132279
houtyp3 Dummy Male headed Polygamous household -0.990162***
houtyp4 Dummy Male headed one wife household -0.0988006
houtyp5 Dummy Male headed widower household -0.0447391
age_of_hou~d Age of household head 0.0095144**
distanceto~t Distance of the farm to nearest market -0.0024877
bankaccount Dummy bank account ownership 0.161946
transpmeans Dummy Means of transport -0.0517002
Farm input costs
ln_ConserM~e Log of SLM maintenance costs -0.0287324
ln_Totalfe~t Log of fertilizer costs 0.0117501
ln_Labourc~t Log of labour costs -0.0163353
ln_Totalot~t Log of other farm inputs 0.0007071
Household energy costs
ln_butaneg~t Log of butane gas cost 0.0667856
ln_paraffi~t Log of paraffin cost -0.0303671
ln_charcoa~t Log of charcoal cost -0.0016212
ln_firewoo~t Log of firewood cost -0.980223***
ln_cropres~t Log of crop residue cost -0.21957**
ln_nrmincome Log of NRM based off-farm income -0.0231404
ln_offfarm~e Log of Nonfarm income 0.1466268
ln_Totalfa~e Log of value of crop produced 0.057411
Constant 8.246764
Asterisks (*, **, ***) indicate significance at 10%, 5%, and 1% respectively.

25. Discussions
• Polygamous household had a negative significant influence on
the index
• The older the household head, the more likelihood he had
enough biomass fuel at household level
• Firewood income streams was negatively correlated to the
poverty index
• Crop residue income streams were also negatively correlated
• Those dealing with nonfarm income activities were
significantly above the energy poverty line
• Though not very significant involvement in NRM based off-
farm was mainly from those below energy poverty line

26. Reference
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