Multiple equilibria, soil conservation investments, and the resilience of agricultural systems

This paper provides a new explanation for the persistent land degradation in
some parts of the world, despite the availability of seemingly effective soil conservation
technologies. We demonstrate that soil conservation technologies may induce agricultural
systems to exhibit equilibria characterized by both low and high levels of soil degradation.
These two equilibria are separated by a threshold level of soil degradation beyond which
a conservation investment will not yield a positive return. Once a parcel of land crosses
this productivity threshold, soil degradation becomes economically irreversible (it is not
profitable to invest in soil conservation) even though the degradation may be technically
reversible. A case study of terracing investments in Peru is used to demonstrate the
existence of multiple equilibria under conditions typical of many marginal agricultural
areas. These findings help explain why attempts to encourage permanent adoption of soil
conservation practices often fail, and how more successful policies could be designed.