Synergy and trade-offs between economic efficiency and environmental effects of alternative land use practices using farm level static bio-economic modelling in Bale Eco-Region

In Bale Eco-Region (EBR), production and productivity mainly suffers from fertility deterioration, skyrocketing prices of fertilizer, and unsustainable interactions among different land uses systems. This study was initiated to determine synergy and trade-offs between economic efficiency and environmental effects of alternative land use practices using farm level static bio-economic modelling EBR. Data were collected through household survey, group discussion, key informant interviews and field observation. The data collected was analyzed using both descriptive and econometric analysis. The result indicates economic return of crop-livestock mixed farming first falls but progressively increases as environmental quality increases, showing a more stable increasing rate at higher Environmental Performance Index (EPI) values in highland, in midland food crop production. However, trend of bio-economic optimality curve and coefficients of interaction between environmental and economic efficiency of land use both show large trade-offs and interaction between economic returns and environmental sustainability effects crop production in lowlands of BER is negative and large. Therefore, encourage integrated farming and discourage mono-cropping especially in mid and lowlands of eco-region through improving economic returns of integrated farming practices and creating awareness of rural households on environmental impacts of such farming practices. Key words: Bio-economic, economic analysis, synergy.