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

productivity through soil conservation investments in order to meet subsistence requirements.
Machakos appears to have other sources of income (off-farm) due to its proximity to Nairobi.
Density of membership in groups by households is positive and significant for the
combined data set, but looked at separately, the variable is positive but not significant for
both districts. This suggests that some characteristics require a large data set for their effects
to be realized. However, the sign is as expected. The significant result from the combined
data implies that as the density of memberships increase, the likelihood of deciding to terrace
and also the intensity of terracing will increase. This suggests that it is the networking that is
important. The higher the share of households who participate in groups, the more
networking takes place, which is likely to induce a household to decide to terrace or to do
more terracing. This suggests that preferences of a community or group play an important
role in shaping individual preferences, in particular, if there are social norms as to what
constitutes a “good farmer.” In other words, membership density appears to work through
peer pressure and information diffusion.
The variable reflects the capacity to share information and facilitate the
transformation of information into knowledge and action. As membership density increases, a
critical level is reached that results in households investing in terraces. If deviation from this
norm entails private costs to the farmer—for instance, in the form of social sanctions, guilt
feelings, low self-esteem, or loss of prestige—higher investment in soil conservation is
plausible. Furthermore, group membership connects a farmer to a variety of people and,
thereby, to a wide information base, which may lead to a higher terracing intensity. The
converse is true. Moreover, additional group membership from the same household reduces
significantly moral hazard and adverse selection problems, because monitoring one another’s
activities is not costly. We also note that soil conservation (terracing) has positive
externalities, which improve soil productivity in the specific area in which such measures are
employed but also via improved erosion control over a much wider area. That is, there are
spillover benefits to the community as a whole in terms of reduced erosion.
Membership diversity is found to be negative and significant. This is an interesting
result, since it implies that the assumption is wrong that an organization with different
characteristics—such as age, religion, political affiliation, and occupation—presents greater
opportunities for information –sharing. Maybe it is not so much that it is wrong as that
greater membership variability creates conflicts and makes it difficult for the group to mesh.
As Balland and Platteau (1996) have argued, collective action is successful with
homogeneous groups. Participation, the other element of social capital, is not significant. This
implies that the extent of participation in decisionmaking does not influence either the
decision to terrace or terracing intensity. Cognitive social capital has a negative and
significant effect on terracing intensity for the combined data set and separately for
Machakos. This element of social capital increases the perception of a soil erosion problem,
yet reduces both the likelihood of undertaking a decision to terrace and the terracing
intensity. This suggests that cognitive elements (relating to norms, values, attitudes, and
beliefs) are acting contrary to expectation. The results also suggest that different elements of
social capital do not act in the same direction. We find that group membership or membership
density is positive and significant in relation to soil conservation investments. This implies
that certain types of social capital suffer from negative productivity, while others enjoy
positive productivity (Dasgupta forthcoming).
Location is negative and significant. The results also show that Machakos has a
significantly higher level of soil conservation investments than Taita-Taveta. This reflects a
greater propensity for Machakos farmers to undertake investments to prevent soil erosion and
conserve moisture. This may have to do with learning and copying from neighbours. In
Machakos, some of this learning was in the form of an exogenous shock (Tiffen, Mortimore,