Action-based payments that compensate farmers for adopting land-management measures to preserve and enhance the environment have been criticized for being ineffective. The root of the problem is that farmers are not paid for achieving a desired environmental benefit, but compensated for their costs of management. There is growing interest in formulating result-based economic incentives.

Biodiversity offsets seek to counterbalance loss of biodiversity due to major developments by generating equivalent biodiversity benefits elsewhere, resulting, at least in theory, in ‘no net loss’ (or even a ‘net positive gain’) in biodiversity. While local costs of major developments themselves receive significant attention, the local costs of associated biodiversity offsets have not.

This study examines the farm-level economic benefits and aggregate welfare impacts of adopting push–pull technology (PPT)—an innovative, integrated pest and soil-fertility management strategy—with a set of household- and plot-level data collected in western Kenya. The evaluation is based on a combination of econometric and economic surplus analysis. Treatment effect estimates are used to assess the technology-induced shift in the maize supply curve, which is then used as an input to the economic surplus analysis.