Tropentag, October 11 - 13, 2006 in Bonn "Prosperity and Poverty in a Globalized World – Challenges for Agricultural Research"

Uniting Cattle Production and the Provision of Environmental Services on the Same Plot: An Analysis of Farmers Costs, Benefits and Incentives to Adopt Silvopastoral Systems in Costa Rica, Nicaragua and Colombia

^1
2Center for Research and Higher Education in Tropical Agriculture (CATIE), Agroforestry, Costa Rica

Abstract

Driven by a growing world population and rising incomes, the demand for livestock in developing countries is expected to double over the next twenty years. This trend gives reason for concern that an expansion of livestock production will put additional pressure on natural resources. At the same time, this quickly growing demand opens a unique opportunity for small-scale livestock farmers to enter markets as suppliers and to enhance their household welfare through additional income.

One important challenges associated with this trend is finding ways of linking the promotion of sustainable livestock production systems with the provision of adequate incentives for their adoption. The GEF project “Integrated Silvopastoral Approaches to Ecosystem Management” is testing a novel approach which has potential to meet this challenge. It uses payments for environmental services (PES) as an incentive for the adoption of silvopastoral practices on degraded pasture land in Costa Rica, Nicaragua and Colombia. Small and medium sized farmers are rewarded with payments for the provision of global environmental services – carbon sequestration and biodiversity sequestration – generated by silvopastoral systems. Payments are issued over a period of two to four years to cover parts of up-front investment costs. Once payments end, the systems are expected to generate returns which exceed those of traditional land-use practices thus providing the basis for their long-term sustainability.

The present paper analyses farmers' costs and benefits of adopting silvopastoral systems in three different countries and identifies socio-economic characteristics of farm households which favour/impede their adoption. To shed light on the question whether transaction costs constitute a barrier to small-scale farmers' participation in PES systems, transaction costs of farmers are measured who participate in Costa Rica's national PES scheme. Based on those findings, suggestions are made on how to design PES systems which enable small-scale farmers to participate as efficient providers of environmental services, and how to compose silvopastoral systems which maximise farmers' household welfare.

Keywords: environmental services, silvopastoral systems, transaction costs

Contact Address: Stephan Piotrowski, University of Hohenheim, Agricultural Development Theory and Policy, Schloss Osthof-Süd, 70599 Stuttgart, Germany, e-mail: spiotrowuni-hohenheim.de