Economics of erosion‐control and seed‐fertilizer technologies for hillside farming in Honduras

With population growth still at very high rates and large‐scale commercial farmers and cattle ranchers owning much of the more fertile valley land, small‐scale farmers are concentrated on increasingly marginal, steeply sloping hillsides in Central America. The continuing soil erosion and land degradation in these low‐input staple crop production hillside farming systems lead many to be pessimistic about increasing the agricultural incomes of these farmers. However, this study shows that the appropriate combination of improved technologies and agricultural policy or alternative production diversification strategies can improve the incomes of small‐scale hillside farmers in southern Honduras by over 50%. The technology components considered are stone walls and ditches combined with living tree barriers to prevent erosion of the hillsides, and a package of improved sorghum seed, seed treatment, and modest doses of nitrogenous fertilizer. A whole‐farm mathematical programming framework is used to determine the potential farm‐level income effects of the soil‐conservation and seed‐fertilizer technologies. The main conclusion is that erosion‐control devices and yield‐increasing crop varieties and fertilizer are an effective technology introduction strategy for the erosion‐prone hillside landholdings found in many areas of Central America. If policy actions or diversification strategies for disposal of surplus grain are found which are effective in reducing the risk of low income from cereal price reductions in high‐production years, adoption of the improved technologies is shown to be profitable for small‐scale farmers. Another benefit not explicitly considered would be to slow the very rapid growth of urban poverty in these countries. Sensitivity analysis results indicated that neither risk aversion nor the increased availability of crop land or initial cash have any substantial effects on the predicted adoption level of the improved technologies, or on their income impacts for these farmers.