Household and plot level impact of sustainable land and watershed management (SLWM) practices in the Blue Nile

Land degradation and water shortages are major issues in developing countries, contributing to reduced economic output, lower growth potential and increased poverty. The immediate trade-off between short-term welfare and long-term agricultural development in the highland regions of Ethiopia represents a challenge to successful economic development in a predominantly agricultural-based economy. Although previous studies investigated country-level economic costs of sustainable land and watershed management (SLWM) in Ethiopia, few quantitative assessments of household level SLWM adoption and maintenance, linked to benefit payoff horizons and magnitude, exist in recent literature.
We employ nearest-neighbor matching techniques to measure the impact of adopting specific SLWM technologies on value of production. Results suggest that households that adopted terraces, bunds, or check dams within the first period of the study period (1992–2002) experience a 15.2 percent higher value of production in 2010, while late adopters (farmers that adopted SLWM between 2003–2009) have no significant increases in value of production.
We repeat this analysis at plot level using continuous treatment effects analysis in order to take into account differences in treatment (defined as years a plot has been under SLWM investment). Results suggest that maintenance of SLWM structures is crucial to reap significant benefits from investment. Plots with SLWM infrastructure that are maintained for at least 7 years have a positive increase in value of production at the end of the 7th year, while those that received investments more recently or lacked continuous maintenance do not experience a statistically significant increase in value of production. In addition, we find that the marginal benefit of sustaining SLWM increases over time at an increasing rate.
Finally, we briefly discuss the benefits and costs of implementing SLWM for individual farmers and calculate an approximate net present value of investing in such infrastructure. We find that although value of production increases given these investments, the benefit may not always outweigh the costs of implementation, and policy measures to incentivize construction and maintenance may be needed.