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This study investigated the linkages between poverty, agricultural productivity and land degradation in Uganda. Results show that farmers in the study region of Uganda deplete about 1.2% of the nutrient stock stored in the topsoil per year, leading to a predicted 0.2% annual reduction in crop productivity. Replacing the depleted nutrients using the cheapest inorganic fertilizers would cost about 20% of farm income on average. Land investments such as soil and water conservation structures and agroforestry trees were found to increase agricultural productivity and reduce land degradation. We observed an inverse farm size crop productivity relationship. Larger families are more productive but use more erosive practices in crop production. Participation in agricultural extension, especially the new National Agricultural Advisory Services program, and access to credit and markets are associated with increased productivity but have insignificant impacts on land degradation. Education is associated with greater productivity, but also with more soil nutrient depletion. Access to roads is associated with less soil nutrient depletion. We find no significant differences in crop productivity associated with differences in land tenure systems, though land degradation is greater on mailo than freehold land. Our results show that promotion of agricultural modernization through technical assistance and credit programs, investments in infrastructure and education can improve agricultural productivity. However, they also show that many of these investments do not necessarily reduce land degradation, and some may contribute to it. Thus, investing in agricultural modernization should be complemented by greater efforts to address land degradation.