ECONOMICS OF SOIL EROSION: CASE STUDY OF UKRAINE

Abstract

This study uses the following methods: expert assessmentsandmonographic(forthe assessment ofeconomic losses due to crop productivity loss from spreading soil erosion);graphical(for building three-dimensionalgraphs);econometric modeling(to develop a mathematical model of the dependence of the gross crop production and income from sales per 100hectaresfrom the share of eroded arable land in its total area and production costs in crop industry per 100hectares);abstract-and-logical(for generalization of the research results). To solve the assigned tasks, linear and quadratic econometric models (production functions) weredevelopedusing a dataset (і)from 168observations (on the example of Ukrainian regions for 2010–2016) and (ii)from 189observations (on the example of districtsof Kharkiv regionfor 2010–2016).This study was conductedin order to test the hypothesis thatthe increase in the area of eroded arable land has a negative effect on the gross output of crop production.Results. Our expert assessment of economic lossesdue to crop productivity loss from spread of soil erosion on agricultural land in Ukraine is 224mlnUSD. The obtained results confirm the hypothesis about the negative relationship between gross crop output and thelevel of land erosion. The obtained dataconfirm that an increase in the area of eroded arable land by 1%leads to a decrease in the gross output of crop production by 0.20% per 100hectares of agriculturalland in total, and in thethird group of the studied subjects (the share of eroded arable land in their total area is more than 50%) –by 0.61%, respectively.Originality / scientific novelty. For the first time, linear and nonlinear (quadratic) econometric modelswere developed, which made it possible to carry out quantitative assessment of the impact of the soil erosion and the financial support (production costs in crop industry) per hectare on the formation of the financial results (gross crop outputand income)of business entities in Ukrainianagriculture. The provision on the economics of soil erosion was furtherdeveloped in terms of expert assessment of losses from this type of degradation and confirmation of the effect of the economic law of diminishing returns, whichshould be taken into account when developing measures for sustainable land management.