The issue of incentives has been studied for the adoption of soil and water conservation in the ravines of Gujarat in the context of holistic development of small and marginal farms and their profitability. It is hypothesized that poor economic condition of farmers impedes their ability to make large-scale investment in conservation agriculture, in general and improvement of land, in particular. The study is based on two groups of farms- with and without conservation history. The results have substantiated the argument that under the present price scenario, farm profitability makes the marginal farms susceptible to a vicious poverty circle. The input and output prices prevailing in the region do not favour the farming enterprise. Thus, this policy variable would have little impact on farm profitability and the incentive to adopt conservation on farm. Hence, such farms need an initial dose of state help. This fact has been clearly brought out in the study area. The farms benefiting from past conservation programme of the state government have done better than those who were deprived of it. The former group of farms has been able to lease-in better piece of land and take cash crop to raise their profit level. This has positively affected their investment decisions. While land tenure has shown weak relation with decision of farm investment, farmers’ credit worthiness might play a greater role in helping adoption of conservation on farm. Thus, financial inclusion of these marginal farms could be an important incentive policy variable for adoption of conservation measures in this region.


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