Soil Conservation in a Watershed:

The private, collective and public nature of soil quality in a watershed provides three different institutional alternatives for watershed management: individual, collective and government action. This study reviews the success and failure of these alternatives in different parts of the world. Individual action by a farmer is driven by the net present value of farm profit and the resale value of the agricultural land. However, individual action for soil conservation remains sub-optimal due to the presence of negative externality and the short-run income loss to the farmer. Many government and development agencies have designed several mechanisms such as collective and government actions to internalise the externality. However, not all these alternative initiatives have been successful in ensuring successful management of soil quality in a watershed.