Agglomeration payments for catchment conservation and improved livelihoods in Malawi

The 'Groupon' is a popular retail technique whereby returns to consumers are enhanced if they can convince others to participate as well.

The same approach can be used for land management, where bonus payments based on the participation of neighbours can be employed to achieve contiguity of land use, prevention of land degradation, enhancement of biodiversity and other ecological services. Such payments - termed 'agglomeration payments' in the ecological economics literature - may also offset some program costs by reducing moral hazards and encouraging sustained adoption.

In partnership with the Malawi Department of Land Resources and Conservation (DLRC) and the National Smallholder Farmers' Association of Malawi (NASFAM), our research evaluated the impacts of agglomeration payments on the adoption of agricultural conservation technologies promoted by the Government of Malawi.

The treatments compared the roles of extension services, conventional payments and agglomeration payments in encouraging the adoption of sustainable agricultural practices such as conservation agriculture (CA). The project therefore sought to answer three fundamental questions:

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

Key academic findings of the project comprised:

1. The decision to adopt conservation agriculture is really two separate decisions – one to undertake intercropping, and a separate decision to do crop mulching and zero tillage.
2. The factors shaping each of these two decisions are different.
3. The adoption of mulching and zero tillage is shaped in large part by i) whether neighbours are currently adopting, and ii) whether an incentive is available.  This structure suggests the potential for incentives to encourage early adoption, with neighbourhood ‘tipping points’ bringing in additional participants at later stages (and possibly not requiring incentives)
4. At present conditions, the levels of adoption achieved via our intervention suggest a cost of avoided sediment loading (via land use encouragements) at around $6-8 per ton.

Featured image courtesy of Swathi Sridharan (ICRISAT)