Economics of Land Degradation and Improvement in Kenya

Abstract

Kenya is an agricultural nation, with over 12 million people residing in areas with degraded lands. Unfortunately, the food crop productivity growth in the country has failed to exceed the population growth. The growth of agricultural output in Kenya is constrained by many challenges including soil erosion, low productivity, agro-biodiversity loss, and soil nutrient depletion. Land exploitation devoid of proper compensating investments in soil and water conservation will lead to severe land degradation. This will translate to loss of rural livelihoods, diminished water supplies and threaten the wildlife habitat. This study explores the causes, extent and impacts of land degradation in Kenya, discusses the costs of action versus inaction in rehabilitating degraded lands, and proposes policy options for promoting sustainable land management (SLM). In order to appropriately support SLM, there is a need to account for the total economic value (TEV) of land degradation, i.e. including the value of both provisioning and indirect ecosystem services of land. Using such a TEV approach, findings show that the costs of land degradation due to land use and land cover changes (LUCC) in Kenya reach the equivalent of 1.3 billion USD annually between 2001 and 2009. Moreover, the costs of rangeland degradation calculated through losses in milk and meat production, as well as in livestock live weight decreases reach about 80 million USD annually. Furthermore, the costs of “soil nutrient mining” leading to lower yields for three crops, namely wheat, maize and rice in Kenya were estimated at about 270 million USD annually. The cost of taking action to rehabilitate lands degraded through LUCC is found to be lower than the cost of inaction by 4 times over a 30 year period, i.e. each dollar invested in land rehabilitation is likely to yield four dollars of returns. This may strongly justify the urgent need for taking action against land degradation. Addressing land degradation involves investments in SLM. Our econometric results show that improving access to information on SLM and to the markets (input, output, financial) may likely stimulate investments into SLM by agricultural households.