Cost–Benefit Analysis of Soil Degradation and Restoration - Principles of Sustainable Soil Management in Agroecosystems - page 243

Both the private and social perspectives or accounting stances are important as illus-
trated in the DR case application. The private level analysis demonstrates the on-site
profitability of alternative soil conserving or sediment reducing practices to hillside
farmers and shows those on steeper slopes as net losers. The social level analysis
includes both on-site and hydropower-related off-site impacts and includes corrective
or shadow prices for both labor and overvalued local currency. This analysis shows
social benefits of soil conserving practices to be substantially higher than the private
costs in the Valdesia Watershed and reservoir in the DR, which has important impli-
cations for transfer payments to farmers for soil conserving practices.
The tools generally used to determine soil loss rates and sediment transport in
LDCs are, by and large, rudimentary. Thus, it is hardly surprising that available
estimates of the external costs of erosion (e.g., the costs of lost hydroelectricity, of
reductions in irrigation water, of flood control, etc.) are imperfect. Similarly, in order
to understand better how the hillside farmer makes the decision of whether or not
to utilize land in a soil conserving fashion, better information about his institutional
environment and about production functions for both traditional and less erosive
agricultural activities is needed. Finally, better demographic information about the
populations that inhabit environmentally sensitive areas would improve our under-
standing of how renewable resource management problems evolve over time.
With more research on the on-site and off-site impacts of reductions in soil loss,
it will be possible to perform economic analysis that is more comprehensive than
the analysis described in this case. The case application estimates of the external
benefits of soil conservation are probably conservative (only one type of benefit—the
extension in dam lifetime—was quantified), and the per hectare returns associated
with traditional agriculture have probably been overstated. Thus, the results of the
Valdesia case argue for more research that allows for the design of better strate-
gies for dealing with pressing soil erosion and sedimentation problems in developing
countries throughout the world.
10.4.3 S oMe o hio e VidenCe of S oil e roSion
o ff - S ite e ConoMiC i MpaCtS (C aSe 3)
10.4.3.1 Methods and Results of Studies
Resource economists at The Ohio State University have evaluated the downstream
economic impacts of soil erosion in Ohio on several receptors including natural
lakes and man-made water reservoirs. For example, Macgregor (1988) used the Ohio
Department of Natural Resources State Park Lakes data on lake characteristics, visi-
tations, and dredging to estimate the boater value losses and dredging costs due to
sedimentation in 46 state park lakes. Macgregor et al. (1991) report that sediment
deposition was significantly and negatively related to boater visitor days, and this
coefficient was multiplied by a mean value ($23.92) for a motorized boating recre-
ational day to get boater value loss. These findings indicate an average boater value
loss in the 46 lakes of $0.54 per metric ton of sediment, but the values ranged from
$0.009 to $13.18 per metric ton of sediment. This emphasizes the need for targeting
of soil conservation funds based on off-site economic impacts. The average cost was
$1.42 to dredge 1 metric ton of sediment in 11 state park lakes where dredging was