The document discusses how markets, institutions, and policies influence smallholder investment in sustainable land management (SLM) in Africa. It argues that SLM adoption has been low due to a lack of profitable SLM options, high opportunity costs of labor, and weak property rights, markets, and institutions. Markets can promote SLM by facilitating access to new technologies and inputs, but are not sufficient on their own without well-defined property rights and coordinated policies to reduce tradeoffs from intensification and support diversification. Payment for ecosystem services and targeted subsidies may also incentivize SLM when costs are less than social benefits. Overall, the document emphasizes that improved market access, policies, and institutional arrangements are needed to encourage more small

7. Market Access in Agricultural Areas (Africa, Asia and Latin America)

8. Fertilizer for SLM

9. Adoption of Improved Varieties

10. Irrigation and Water Management

11. Agricultural Markets in Africa: Extended Supply Chains and Segmented Markets Rural wholesaler Transporter Urban wholesaler Processor Cleaners Rural assemblers Brokers Retailers Consumer Farmer Farmer Segmented Segmented

12. High Marketing Costs: Low Producer Price and High Consumer Price

13. Smallholder Market Participation Source: ICRISAT Data, 2005, Eastern Kenya (N=400)

25. Example: Effect of watershed management on commercialization of production in India

26. Effect of IWM on agic-commercialization N=240: F( 13, 226)=42.24 Prob > F = 0.0000, Adj R 2 = 0.688 0.166 -5.904 Constant 0.110 3.387 Inverse Mills Ratio 0.620 0.008 Value of other hh assets (Rs 1000) 0.719 -0.345 Value of motorized hh assets (Rs 1000) 0.038 0.245 Livestock wealth (Rs 1000) 0.200 -1.751 Family female workforce 0.010 -3.311 Family male workforce 0.000 0.361 Hhousehold education (yrs) 0.000 5.421 Owned rainfed land 0.000 11.245 Owned irrigable land (ha) 0.077 1.687 Variable costs (Rs 1000/ha) 0.062 3.551 Watershed village 0.524 2.757 Male household head (=1) 0.003 -7.264 Drought year (2002) Dependent variable: value of marketed surplus (Rs 1000) P-Value Est. coeff IV model Variables

29. Evidence on Role of Markets for SLM (Castano et al., Ag Econ 2005)

30. Evidence on Role of Markets for SLM (Castano et al., Ag Econ 2005) 0.06 0.28 0.53 Adj R 2 -0.16 (0.01) - Lacking coop link - - 0.13 (0.02) Vertical integration - 0.16 (0.01) -0.12 (0.02) Entrepreneurship - 0.1 (0.15) - Market proximity -0.09(0.2) 0.32 (0.00) -0.09 (0.13) Good access to marketing services Runoff control Soil protection Soil disturbance control

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