The Future of Smallholder Farming in Eastern Africa - Uganda ...

linkages) and macro-level institutional and policy factors (extension services, credit facilities,
land tenure regime, and physical infrastructure endowments).
Social capital implies the social resources upon which people draw in the pursuit of
their livelihood objectives. By improving the efficiency of economic relations, social capital
can help increase peoples’ incomes (World Bank 1994) in addition to facilitating continued
agricultural yield increases (Uphoff and Wijayaratna 2000; Admassie, Mwarasombo, and
Mbogo 1998; Uphoff, Esman, and Krishna 1998). In its two dimensions, social capital will
facilitate access to information by reducing the cost through sharing in groups or networks
and, thus, the internalization of the soil erosion problem. Social capital may facilitate
reciprocal insurance arrangements, thereby decreasing household or individual risk, or it may
be used to facilitate access to credit or information (Fafchamps and Minten 1999; Gabre-
Madhin 2001), thus addressing market failure that is caused by asymmetric information
(Arrow 1999). Consequently, we postulate that a high level of social capital is reflected in a
corresponding high level of perception of the soil erosion problem, especially in areas where
this problem can be observed.
Furthermore, we expect that availability and access to extension services will increase
the level of awareness of soil erosion if a policy exists that is geared toward arresting the
problem in soil erosion-prone areas, in which case the perception of individual households
will be high, with the corresponding consequence of increased terracing investments.
Moreover, we expect households who frequently interact with extension staff to be more
cognizant of the problem.
It is known that investments in long-term soil conservation measures require tenure
security. Katz (2000) argues that social capital can overcome the disincentives for natural
resource management brought about by informal or poorly defined property rights—titling
reduces defensive land clearing and provides greater incentives for demographic stability,
particularly in agricultural frontier areas. It is therefore likely that secure tenure rights would
improve perceptions of soil erosion as a problem.
The link between access to credit and heightened perception is not clear, since there is
no theoretical basis. However, it has been shown that when institutional credit markets are
highly imperfect, inherited endowments (including land and the embedded soil erosion status)
become central in the ability to acquire productive assets (Pender and Walker 1989. An
increase in farming is expected to raise perceptions of the soil erosion problem and its
associated economic impacts (Shiferaw and Holden 1998; Ruthernberg 1980; Templeton and
Scherr 1997). Diversification out of agriculture is likely to reduce pressure on land or to
decrease the dependency of a household on farming as a primary income source. Therefore,
increased off-farm orientation is expected to lower perceptions of soil erosion as a problem.
Family size will impact on the land-man ratio—its effect, from the Boserupian perspective
(Boserup 1965), would be to increase the impetus to invest in land quality. Thus, one may
argue that the decrease in soil erosion following autonomous investments will reduce the
threat and its perception.
Once their perceptions have been internalized, the farmers are likely to move into the
second stage, which involves a response to the perceived problem. There are two possible
responses: either the farm household invests in terraces, or it does nothing about the problem.
The two outcomes are observable. We postulate that this outcome will be a function of
perception, institutional and policy factors, household characteristics, the stock of social
capital that a household possesses, farm characteristics, and area- or location-specific factors.
Recognition of the problem is essential for soil conservation investments (Templeton
and Scherr 1997; Tiffen, Mortimore, and Gichuki 1994); consequently, perception will be
strongly linked to the level of terrace investments. An increase in the consumer-worker ratio,
however, reduces the ability of households to meet their subsistence needs, especially where