| Abstract: | Soil degradation is a mounting problem on many smallholder lands in developing countries. Economic analysis has been an important tool in addressing this problem, beginning with assessments of the financial attractiveness of investing in soil conservation works. Data compiled from 67 studies of the financial attractiveness of conservation technologies suggest that many can provide positive net returns at the farm level (64·2 per cent). While such studies have made a valuable contribution, economists have been exploring additional applications of economics to the problem, such as the development of new perspectives under the guise of ecological economics. As a result, this paper argues it is an opportune time to assess progress in the field of economic analysis of soil degradation and to consider the policy ramifications of this research. Key issues are grouped into farm‐level considerations, national policy linkages and global issues. A number of policy implications emerge. Clearly, devising effective incentives at the farm or community (collective action) level must be a priority. As part of this effort, even more attention should be paid to the influence of macroeconomic and sectoral policies on soil productivity. Since soil degradation is also a problem with global ramifications, there is a clear rationale for intervention at the international level via mechanisms such as international transfers. Copyright © 2004 John Wiley & Sons, Ltd. |
