Abstract: Over the last three decades, many soil and water conservation projects have been implemented in various parts of eastern and southern Africa to control land degradation, and improve land productivity, especially under ‘catchment approach’ initiatives of the 1980s. In Ethiopia, many of these soil conservation projects were implemented following the severe drought of 1974. To capture long-term impacts of these initiatives, a study was conducted in Anjenie Watershed of Ethiopia, assessing fanya juu terraces and grass strips constructed in a pilot project in 1984, and which are still functional 25 years later. Data were collected from government records, field observations and questionnaire surveys administered to 60 farmers. Half of the respondent had terraced farms in the watershed former project area (with technology) and the rest were outside the terraced area (without technology). The crops assessed were teff, barley and maize. Cost–benefit analyses were used to determine the economic benefits with and without terraces, including gross and net profit values, returns on labour, water productivity and impacts on poverty. The results indicated that soil and water conservation had improved crop productivity. The average yields on terraced fields for teff, barley and maize were 0.95tha−1 (control 0.49), 1.86tha−1 (control 0.61), and 1.73tha−1 (control 0.77), respectively. The net benefit was significantly higher on terraced fields, recording US$ 20.9 (US$ −112 control) for teff, US$ 185 (US$ −41 control) for barley and US$ −34.5 (US$ −101 control)ha−1 yr−1 for maize, respectively. The returns on family labour were 2.33, 1.01 and 0.739US$man-day−1 for barley, teff and maize grown on terraced plots compared to US$ 0.44, 0.27 and 0.16man-day−1 for without, respectively. Using a discount rate of 10%, the average net present value (NPV) of barley production with terrace was found to be about US$ 1542 over a period of 50 years. In addition, the average financial internal rate of return (FIRR) was 301%. Other long-term impacts of terracing included farmers’ growing of maize on terraced fields as a result of water conservation. Currently, farmers also grow barley on terraced fields for two crop seasons per year unlike the experiences on farms without terraces. Household incomes and food security had improved and soil erosion drastically reduced. Many farmers had adopted terracing doubling the original area under the soil conservation pilot project and consequently improving environmental conservation in the watershed. [Copyright &y& Elsevier]
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