Agricultural Economics Research Review

This paper has examined the trade-off between non-farm income and on-farm soil and water conservation (SWC) investment by smallholder farmers in the semi-arid tropics (SAT) of India. A dynamic bio-economic simulation model has been used to assess the impact of improved off-farm employment opportunities on household welfare, land degradation and labour allocation for SWC activities. The simulation results has revealed that improved non-farm employment opportunities increase the household welfare but reduce the households’ incentives to deploy labour for soil and water conservation measures, leading to higher levels of soil erosion and rapid land degradation. The study has suggested that there is the need of other complementary policy interventions to protect the natural resource base because improvement in non farm income opportunities does not produce a win-win solution in the watershed in the SAT region.