Smart Subsidies for Catchment Conservation in Malawi

What is the challenge?

Many developing country regions suffer from growing land degradation. Malawi’s Shire Valley is no exception. The concern in this region has not only been land degradation and the resulting reduced agricultural productivity but also suboptimal performance of downstream hydropower infrastructure.

The adoption of sustainable agricultural practices, including adhering to the principles and practices of conservation agriculture (CA) to reduce land degradation in this area is still modest, and it is challenging to evaluate the impact of adoption through non-experimental approaches.

Agglomeration payments are a recent innovation in ecological economics in which, in addition to conventional encouragements, bonus payments based on the participation of neighbors can be employed to achieve desired spatial patterns, contiguity of land use, prevention of land degradation, enhancement of biodiversity and other ecological services.  Such payments may also offset some program costs by reducing moral hazard and encouraging sustained adoption. 

This study applies agglomeration payments as part of an encouragement design for land conservation practices in Malawi’s Shire Valley basin.  A particular concern in this region has been land degradation and economic damages to downstream hydropower infrastructure associated with poor land-use practices upstream.  In partnership with the Malawi Department of Land Resources and Conservation (DLRC) and the National Smallholder Farmers’ Association of Malawi (NASFAM), our research will evaluate the impacts of agglomeration payments on the adoption of agricultural conservation technologies being promoted currently by the Government of Malawi, and the positive externalities for the Shire Valley basin that may accrue from the resulting spatial contiguity of adopting farms.

Key research questions

  1. How do agglomeration payments shift interactions among farmers, as well as rates/patterns of adoption of sustainable agricultural practices, such as conservation agriculture?
  2. Can agglomeration payments lead to enhanced landscape-scale ecosystem service provision?
  3. Do agglomeration payments facilitate cost-effective ecosystem service provision, relative to conventional incentives?

In addressing these questions, we will test the following set of hypotheses:

H1: Agglomeration payments lead to higher levels of spatial contiguity among adopters than other encouragements
H2: Agglomeration payments lead to higher levels of diffusion and overall adoption rates than other encouragements
H3: Agglomeration payments increase contacts and interactions among neighbors, relative to other encouragements (potentially allowing additional unintended benefits to accrue to the community)
H4: Agglomeration payments lead to higher compliance (and lower cheating rates) than other encouragements
H5: Land-use patterns encouraged by Agglomeration payments lead to reduced sediment loading and improved runoff regulation when adopted at the landscape scale
H6: Agglomeration payments lead to more cost-effective sustainable land management improvements than conventional encouragements

Basic information about the activity

In partnership with the Malawi Department of Land Resources and Conservation (DLRC) and the National Smallholder Farmers’ Association of Malawi (NASFAM), our research evaluates the impacts of agglomeration payments on the adoption of agricultural conservation technologies being promoted currently by the Government of Malawi, and the positive externalities for the Shire Valley basin that may accrue from the resulting spatial contiguity of adopting farms.

Our two-pronged research strategy includes first a pilot study with a 4-treatment encouragement design to evaluate strategies for improving adoption of conservation agricultural technologies under DLRC-led programs in the Shire Valley. The treatments will compare the roles of extension services, conventional payments, and agglomeration payments in encouraging adoption of sustainable agricultural practices such as Conservation Agriculture. Second, we propose to develop an agent-based model (ABM) of the Shire Valley basin system to evaluate consequences of improved adoption of sustainable agricultural practices for the enhanced provision of ecosystem services such as improved water quality and runoff regulation, or increased natural predator and pollination services.

  • Department of Land Resources and Conservation (DLRC), Malawi
  • National Smallholder Farmers’ Association of Malawi (NASFAM)
  • Lilongwe University of Agriculture and Natural Resources (LUANR)
  • University of Leeds, UK
  • Weber State University, Utah, USA

Collaborator Weber State University secured a grant titled “Smart Subsidies to Promote Peer Monitoring of Conservation Agriculture Compliance in Malawi” supported by USAID BASIS AMA to assess in more detail, the cost-effectiveness of the voucher for agglomeration payments under alternative monitoring efforts.

Publications

  1. Ward, Patrick S.; Bell, Andrew R.; Parkhurst, Gregory M.; Droppelmann, Klaus; and Mapemba, Lawrence. 2016. Heterogeneous preferences and the effects of incentives in promoting conservation agriculture in Malawi. Agriculture, Ecosystems & Environment 222(2016): 67-79.
    Related Discussion Paper
  2. Bell, Andrew; Parkhurst, Gregory; Droppelmann, Klaus; and Benton​, Tim G. 2016. Scaling up pro-environmental agricultural practice using agglomeration payments: Proof of concept from an agent-based model. Ecological Economics 12(June 2016): 32-41.
  3. Bell, Andrew; Matthews, Nathanial; and Zhang, Wei. 2016. Opportunities for improved promotion of ecosystem services in agriculture under the Water-Energy-Food Nexus. Journal of Environmental Studies and Sciences 6(1): 183-191.
  4. Ward, Patrick S.; Bell, Andrew R.; Droppelmann, Klaus; and Benton, Tim. 2016. Understanding compliance in programs promoting conservation agriculture: Modeling a case study in Malawi. IFPRI Discussion Paper 1530. Washington, DC: International Food Policy Research Institute (IFPRI).

Acknowledgements

A grant from the ESPA program (NE/I001624/1) funds an evaluation of the agglomeration payment. The ESPA programme is funded by the Department for International Development (DFID), the Economic and Social Research Council (ESRC) and the Natural Environment Research Council (NERC), as part of the UK’s Living with Environmental Change (LWEC) programme.

SSCCM is comprised of two independent projects.

A grant from the ESPA program (NE/I001624/1) funds an evaluation of the agglomeration payment. The ESPA programme is funded by the Department for International Development (DFID), the Economic and Social Research Council (ESRC) and the Natural Environment Research Council (NERC), as part of the UK’s Living with Environmental Change (LWEC) programme.

A second grant from the BASIS AMA expands the evaluation to include conditions of incomplete monitoring. The BASIS AMA is funded by US Agency for International Development (USAID)

Contact

Claudia Ringler 
Deputy Division Director & Natural Resource Management Theme Lead
Environment and Production Technology Division