Agglomeration Payments for Catchment Conservation — Shire River Basin Watershed PES Pilot (Malawi)

Soil erosion from conventional farming in Malawi's upper Shire River Basin (Balaka, Machinga and Zomba districts) loads the river with sediment that damages downstream habitat and silts the reservoirs of hydropower dams supplying over 90% of Malawi's electricity.

Researchers designed the Agglomeration Payments for Catchment Conservation pilot as a randomised controlled trial to test whether hydropower-linked, avoided-sediment payments could increase adoption of conservation agriculture, comparing a standard per-area subsidy against an 'agglomeration' bonus intended to capture the catchment-scale benefit of neighbouring plots adopting together.

The pilot ran across 60-63 villages (roughly 1,800-1,900 households), funded by the UK-backed Ecosystem Services for Poverty Alleviation programme, USAID's Feed the Future Innovation Lab and CGIAR. Two payment structures were tested: a standard per-area subsidy (1,200 Malawi Kwacha per 0.1 acre) and an 'agglomeration' bonus (600 MKW per 0.1 acre plus 200 MKW per contiguous adopting neighbour). Payments were delivered as agricultural input vouchers.

Enrolment rose from about 1,450 households in Year 1 to about 2,800 in Year 2, and conservation-agriculture adoption rose to roughly 170% above the control group, adding an estimated 7% of cropped land under conservation agriculture across study villages. Published cost-effectiveness estimates for avoided sediment ranged from about US$7 per tonne under favourable assumptions to US$20 per tonne with ongoing payments, rising to as much as US$200 per tonne once monitoring costs are included.

The Government of Malawi and the World Bank drew directly on this evidence base to design the US$157 million Malawi Watershed Services Improvement Project (MWASIP, approved June 2020), which targets 95,000 ha of degraded land restoration in the middle and upper Shire and reports over 250,000 direct livelihood-support beneficiaries in its first three years. Public data on current per-farmer payment levels or disbursement under the scaled-up programme could not be found, so it is reported here as a documented pilot with a well-evidenced but not yet independently re-verified scale-up.