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Tanzania's soil wealth

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  • BREKKE, KJELL ARNE
  • IVERSEN, VEGARD
  • AUNE, JENS B.

Abstract

This paper adopts soil scientific models of soil productivity and degradation in Tanzania into an intertemporal optimisation framework. The farmers choose labour input, capital investment and fertiliser input to maximise soil wealth, i.e., the present value of soil rent. First we focus exclusively on soil mining, considering the nutrient stocks as determinants of land productivity. Next, we focus on soil erosion, and include rooting depth as determinant of land productivity. We compute the soil wealth under the assumption that the opportunity cost of labour is equal to current wages, or alternatively equal to zero. Our estimates suggest that the potential gains from change in agricultural management are considerable. Moreover, the shadow price on root depth and hence the returns to land conservation investments are highly sensitive to our labour market assumptions. We also find that the value of the eroded soil amounts to 12–17 per cent of the value of Hicksian income, and the savings required to maintain consumption amounts to 13–29 per cent of the contribution to GDP.

Suggested Citation

  • Brekke, Kjell Arne & Iversen, Vegard & Aune, Jens B., 1999. "Tanzania's soil wealth," Environment and Development Economics, Cambridge University Press, vol. 4(3), pages 333-356, July.
    • Handle: RePEc:cup:endeec:v:4:y:1999:i:03:p:333-356_00
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    Cited by:

    1. Bond, Craig A. & Farzin, Y. Hossein, 2004. "A Portfolio Of Nutrients: Soil And Sustainability," 2004 Annual meeting, August 1-4, Denver, CO 20035, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Yirga, Chillot & Hassan, Rashid M., 2010. "Social costs and incentives for optimal control of soil nutrient depletion in the central highlands of Ethiopia," Agricultural Systems, Elsevier, vol. 103(3), pages 153-160, March.
    3. Teddie Nakhumwa & Rashid Hassan, 2012. "Optimal Management of Soil Quality Stocks and Long-Term Consequences of Land Degradation for Smallholder Farmers in Malawi," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(3), pages 415-433, July.

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