Economics of Soil Conservation: The Upper Mahaweli Watershed of Sir Lanka

This paper estimates the benefits and costs of soil conservation in the Upper Mahaweli Watershed of Sir Lanka. The costs of soil erosion control include the implementation costs of control measures, while the benefits are reductions in the costs of soil erosion. In contrast to many studies in developed countries, the on‐site benefit of soil erosion control in Sri Lanka is estimated to be greater than the off‐site benefit While a social benefit‐cost analysis demonstrates that it is socially desirable to implement conservation measures, the private financial analyses indicate that it is feasible for individual farmers to adopt the conservation measures. Despite private economic feasibility, programs addressing farmers' reluctance to adopt soil conservation measures may be preferable to public intervention in soil conservation activities when the on‐site benefits are greater than the off‐site benefits.