Land degradation is to date the single most problematic environmental issue in Zimbabwe.

People have been forced to marginal areas for several reasons. Population growth and falling output from present lands are some of the main reasons identified. Land degradation manifests iself in the form of accelerating deforestation and soil erosion. Deforestation is mainly due to increased demand for arable land and increased demand of energy and building materials.

Our main concerns in this paper as regards erosion causes will be directed at lack of sufficient nutrients for the soil due mainly to overuse of the lands. These two issues, deforestation and soil erosion bring to our attention, policies on the price of land, fertilizers and other inputs into the production process. Policies on this would load, directly or indirectly to a charge in the erosion and deforestation states.

Recent policy reforms where put in place with a view to correcting macroeconomic balances, without taking into consideration their ecological implications. However, such policies do have a bearing on the prices mentioned above, and significantly alter the incentives available to the farmer.

To investigate the environmental consequences of these policies, we built a computable general equilibrium model of the economy with explicit environmental features.