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Price and Subsidy Policy on Soil Conservation: Application to Smallholder Tea Growers

Author

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  • Ananda, Jayanath

    (La Trobe University, Victoria 3689)

  • Herath, Gamini

    (La Trobe University, Victoria 3689)

Abstract

The role of commodity prices and subsidies on the adoption of soil conservation has been widely debated yet is poorly understood. One reason for this is the complex nature of the relationship between soil loss and yield damage. This paper examines the effects of price and subsidy policy on adoption of soil conservation measures in tea lands in Sri Lanka. The soil conservation technologies considered are lateral drains, stone terraces and Sloping Agricultural Land Technique (SALT). The study uses a nonlinear yield damage function to estimate tea yield loss due to soil erosion. The yield function is then used in conjunction with a simple analytical model to examine the effects of changes in price and subsidies on the incentives to adopt various soil conservation technologies. When there is a yield increment with soil conservation, increases in both prices and subsidies are found to make soil conservation economically attractive.

Suggested Citation

  • Ananda, Jayanath & Herath, Gamini, 2001. "Price and Subsidy Policy on Soil Conservation: Application to Smallholder Tea Growers," Economic Analysis and Policy, Elsevier, vol. 31(2), pages 99-110, September.
    • Handle: RePEc:eee:ecanpo:v:31:y:2001:i:2:p:99-110
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    Cited by:

    1. World Bank, 2010. "Sri Lanka - Valuation of Environmental Services in Sri Lanka : A Case Study of Soil and Watershed Benefits in the Southern Province," World Bank Publications - Reports 12488, The World Bank Group.

    More about this item

    Keywords

    Conservation; Land; Prices; Soils; Subsidies;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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