Sustainable land and watershed management (SLWM) practices were studied in the Blue Nile basin of Ethiopia. The research found that farmers who implemented and sustained SLWM for at least 7 years experienced higher agricultural production values in the medium term. The longer SLWM was sustained, the higher the marginal benefit of an additional year. However, the costs of initial investment and long-term maintenance of SLWM practices may outweigh the private benefits to individual farmers, depending on factors like wage rates and discount rates used. A combination of SLWM with other soil fertility and moisture management techniques may yield quicker returns on investment.

1. Impact of Sustainable Land and
Watershed Management (SLWM)
Practices in the Blue Nile
Emily Schmidt (IFPRI)
Fanaye Tadesse (IFPRI)
Addis Ababa University: May 18, 2012

2. Outline of presentation
• Overview of soil and water conservation in the
Blue Nile Basin, Ethiopia
• Research questions
• Sample and descriptive statistics
• Methodology
• Results
• Next steps

3. Ethiopia and the Blue Nile basin

5. Agriculture in the Blue Nile Basin
• Land degradation in Ethiopia continues to
challenge sustainable agricultural development
opportunities
• Rainfall is poorly distributed in both spatial and
temporal terms.
– Moisture stress between rainfall events (dry spells) is
responsible for most crop yield reductions
(Adejuwon, 2005).
– Soil erosion rates are highest when vegetation cover
ranges from 0 to 30% (before the rainy season starts).

6. Agriculture in the Blue Nile Basin (2)
• Land degradation in some arease is estimated to
decrease productivity by 0.5 to 1.1% (annual mean).
(Holden et al. 2009)
• Analysis of soil and water conservation on land
productivity in Ethiopia suggest mixed results
– Plots with stone terraces experience higher crop yields
(Pender and Gebremedhin, 2006)
– Experimental trials of bunds and terraces suggest costs
outweigh benefits (Shiferaw and Holden, 2001).

7. Study focus: Blue Nile (Abbay) Basin
• Evaluate SLWM adoption impact on value of
production per hectare
• Understand time horizon of impact (how long
does it take to experience a benefit)
• Assess cost-benefit of such investments

8. Preview of findings
• Farmers that implement and sustain SLWM
experience higher value of production in the
medium term
• Significant benefits are not experienced until
after 7 years of maintenance
• The longer one sustains SLWM, the higher the
marginal effect of sustaining an extra year of
activity.
• It is not clear that the benefits of investment in
SLWM at the private farm-plot level outweigh the
labor costs of maintenance

9. Sample Selection
• 2 regions, 9 woredas (districts): Random sampling
of 200 HHs per woreda
• Stratification: Random sample within woredas
that have recently started or planned SLM
program
– 3 sites (kebeles) per woreda (SLMP woredas)
• Past or Ongoing program
• Planned program (for 2011)
• No formal past program

10. Watershed Survey Sample Sites

11. Broad Overview of Survey Sample
9 woredas: 5 Amhara, 4 Oromiya
– Teff as leading crop (4 woredas in Amhara)
• Fogera
• Gozamin
• Toko Kutaye
• Misrak Este
– Maize
• Mene Sibu (Oromiya)
• Diga (Oromiya)
• Alefa (Amhara)
– Wheat / other
• Dega Damot (Amhara)
• Jeldu (Oromiya)
• Substantial diversity across woredas in terms of production
patterns, landholding, agricultural activity

12. Ongoing SLM activities
Households Using SLM on Private Land
Yes No Total
Alefa 50% 50% 100%
Fogera 54% 46% 100%
Misrak Estie 54% 46% 100%
Gozamin 21% 79% 100%
Dega Damot 82% 18% 100%
Mene Sibu 7% 93% 100%
Diga 32% 68% 100%
Jeldu 2% 98% 100%
Toko Kutaye 79% 21% 100%
Total 40% 60% 100%

13. Percent of total plots under SLWM on private land
(1944-2009 )
20
18
16
14
12
10
8
6
4
2
0

14. Perception of SLM activities
Most Successful Sustainable Land Management activities (%)
40
35
30
25
20
15
10
5
0
stone soil bund check dam trees drainage grass strips
terrace planted ditch

15. Methodology
Impact Analysis : matching based on observables
– Nearest Neighbor Matching: measure ATT of
adopting SLM on value of production and livestock
holdings
– Adopters: 1/3 of private land within the last 15 years
(24% of sample)
ATT = E (∆│X,D = 1) = E(A1 – A0│X,D = 1) = E(A1│X,D = 1) – E(A0│X,D = 1)
– Analyze for two time periods
– 1992 – 2002 (1985 – 1994 EC)
– 2003 – 2009 (1995 – 2002 EC)

16. Covariates for Nearest neighbor matching and
continuous effects estimation
• Land Characteristics
• Land size
• Experienced past flood or erosion
• Experienced past drought
• Slope (flat, steep, mixed)
• Fertilizer use (proxy for willingness to invest – unobservables)
• Soil quality (fertile, semi, non)
• Agro-ecological zone
• Rainfall (30 year average)
• Rainfall variation
• Household Characteristics
• Obtained credit
• Received agricultural extension assistance
• Person-months on non-farm activity
• Distance from a city
• Other HH characteristics (age, sex, education, etc.)
• Other village characteristics

17. Nearest Neighbor Matching – split sample
Outcome Variable ATT Observations
1992-2002 (1985 – 1995 E.C.)
Value of Agricultural Production 0.152 ** 1373
(0.071)
Livestock value (in Birr) -0.429 1318
(.100)
2003-2009 (1996 – 2002 E.C.)
Value of Agricultural Production -0.015 1397
(0.062)
Livestock Value (in Birr) -0.158 1327
(0.095)
• Households that adopted SLWM on their private land in the first 10
years of analysis have 15.2% (2,329 birr avg.) greater value of
production in 2010 than non-adopters.
• If this is the case, what is the dose effect of SLWM, in other
words, what is the marginal benefit of an extra year of SLWM?

18. Continuous treatment effect
• Follow the work of Hirano and Imbens (2004)
• Potential outcome Yi (t ) - plot level value of production per
hectare given a certain treatment level
• Get the average dose – response function defined as
 (t )  E[Yi (t )]
• And the treatment effect function (marginal effect)
 (t )   (t  1)   (t )

19. Treatment Effect function
Treatment level Level of
0.2 treatment Marginal
(years) effect
0.15 7 0.02
0.1 8 0.04
9 0.05
0.05
10 0.06
0 11 0.08
Treatment range with 12 0.09
-0.05 statistically significant
impact
13 0.10
-0.1 14 0.12
-0.15 15 0.13
1 3 5 7 9 11 13 15 17 16 0.15
17 0.16

20. Next steps: Benefit-cost of private investment
Initial investment cost 5000 5000 2000 2000 0 0
Shadow wage rate
factor 1 0.5 1 0.5 1 0.5
Discount Rate: .05
NPV of Benefits 11,478 11,478 11,478 11,478 11,478 11,478
NPV of Costs 24,794 12,397 17,918 8,959 13,334 6,667
NPV Benefits /
NPV Costs 0.46 0.93 0.64 1.28 0.86 1.72
First Year of NB > 0 NA NA NA 2008 NA 2006
First Year of MB > MC 2002 2000 2002 2000 2002 2000
• Wage rate of non-farm labor is very sensitive
• Initial investment cost determines profitability

21. Conclusions
• Households that construct and sustain SLWM
for at least 7 years experience higher value of
production in the medium term
– Unlike technologies such as fertilizer or improved seeds,
benefits may accrue over longer time horizons.
• A mixture of strategies may reap quicker
benefits
– Physical SWC measures may need to be integrated with soil
fertility management and moisture management

22. Conclusions (2)
• The longer one sustains SWC, the higher the
marginal benefit of sustaining an extra year of
activity.
– Initially SWC structures slow ongoing degradation
– Nutrient build-up may take more time to show significant
impact on value of production.
• Benefits may plateau at a certain treatment
level.
– As nutrient repletion and erosion control is successful, we
would expect to see diminishing returns as the necessary
biophysical components are replaced.

23. Thank you for your attention.