Economics of Land Degradation in India

Abstract

Land degradation is increasingly becoming a major concern for Indian agriculture on which two-third of the population depend for their livelihood. Many policies and programs have been initiated in the last two decades to address this problem but the results are meager. Analysis of causes of land degradation and their extents is very important to design suitable policies to overcome the degradation problem. It is in this context, this paper identifies the major socio-economic variables that explain land degradation. It also finds economic and social costs of land degradation and the net benefits from taking up conservation activities and finally draws some lessons on what are the right policy instruments to promote sustainable land management practices. The Total Economic Value (TEV) concept has been used in deriving the costs and benefits. Our findings from state level analysis suggest that ‘input subsidies’ and ‘decreasing land-man ratio’ are two major determining factors that increase land degradation. Rationalizing input subsidies will go a long way in improving the management of land resources. At the household level, the number of crops grown and the operating area are significantly influencing land degradation. The analysis of the costs of action versus inaction against land degradation shows that costs of inaction are higher than the costs of action, indicating the benefits that will accrue if sufficient conservation practices are undertaken. Institutions and incentive mechanisms play important roles in changing the behavior of farmers to act in a resource conservative way.

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