Distributional impacts of soil erosion on agricultural productivity and welfare in Malawi.

We investigate the economic distributional effects of soil loss in Malawi, where erosion deprives rural households of the natural capital necessary to boost agricultural production and lifts food security. We employ a two-year dataset combining unique topsoil loss data with socio-economic, agro-ecological and climatic information both at household and plot level. We consider heterogenous impacts of soil loss in productivity, total consumption and caloric intake by estimating an unconditional quantile regression model. The role of different agricultural practices in mitigating the negative impacts of soil loss is also considered to assess cost-effective policy options and compensation mechanisms and to provide aggregated effects. We show that large heterogeneous impacts currently exist across the most exposed population groups and such impacts could translate in a production loss equivalent to 1 to 3% of Malawi’s GDP under different increasing soil erosion scenarios.