TANZANIA (8th May 2012) - Paying farmers to protect environmental services such as forests and water supplies will work if the buyer and farmer can both share in the investment and in the return, according to a recently published paper.
The paper, Towards operational payments for water ecosystem services in Tanzania: a case study from the Uluguru Mountains, shows that PES works best if the relationship is one of co-investment with shared risk between the buyer and farmer, rather than all risk falling on the farmer.
“Results show that there is initial success in reward schemes that encourage farmers to better manage scarce resources by creating shared responsibility over these resources,” says Meine van Noordwijk, one of the co-authors of the paper and a scientist at the World Agroforestry Centre.
The study is part of the Equitable Payments for Watershed Services (EPWS) project run jointly by CARE/ World Wildlife Fund (WWF). EPWS has been in operation in Tanzania since 2005, with similar schemes in Kenya, Peru and Indonesia. The project, located in the Uluguru Mountains of Tanzania, was evaluated halfway through its operation and results are discussed in the recently published article.
EPWS seeks to encourage farmers to practise methods that sustain the regular flow of water from mountain forests, water that is important for downstream stakeholders in seasonally dry tropical countries. Currently, there is interest in the idea of PES as a scheme that links rural ecosystem service providers to urban water users through economic transfers. This scheme may help to maintain water supply and forest habitat.
Monetary benefits from payment schemes can be translated into diversification of income streams for subsistence farmers. Farmers can do more with the money than just the direct benefit of cash in hand.
Social surveys of 83 households in the pilot area in 2007 showed that 89.2% of villagers are subsistence farmers with no more than 1 ha of land. The farmers have low levels of education (66.7% with only primary education), and live in mud houses with thatch roofs, on farms where few have land title deeds.
Financial payments improving living standards for farmers
Farmers participating in the scheme received financial payments to compensate for their labour and opportunity costs and have used the additional money to purchase iron sheet roofing for their houses, goats for milk and manure production. Some farmers also pay school fees for their children and grandchildren out of the compensation they receive.
Others used the money to purchase extra agricultural inputs, namely better seeds to improve agricultural yields. In September 2010, 25 farmers purchased cabbage seeds using PES funding, which allowed them to change some of their land to a new crop with higher economic value, thus multiplying the livelihood impacts of the PES payments. These ‘multiplier effects’ enhance the modest payments made directly by the scheme.
In July 2009, 144 farmers had joined the scheme and were paid in May 2010 the equivalent of a total of USD 1,639 as an annual payment (about $12 per household per year) to partially compensate for their efforts to improve land management, reduce erosion and improve water quality. By May 2010, 554 local farmers had joined the scheme, increasing to 650 by November 2010. In July 2011 participating farmers were paid a total of USD 11,000 for their efforts to improve land (less than $20 per household).
“Farmers recognize that soil conservation actually increases crop production, and that with some investment help, they can create more profitable and sustainable land use systems,” says Beria Leimona, Project Coordinator of the Rewarding Upland Poor for Environmental Services (RUPES) programme and a co-author of the article.
While bench terracing has a politically charged history on the Ulugurus having been forcibly imposed by the British colonial authorities, the new scheme makes it acceptable or even attractive.
“The success that we see here on the ground points to trust building and co-investment as the key to success,” says Meine.
Mobile technology and the future of PES
There is room for technology in the project as well. In future, payments could be sent direct from buyers to sellers using mobile phone banking technology, which already exists, cutting out middlemen, simplifying the procedure and dramatically reducing transaction costs.
In terms of the Uluguru PES payment arrangements, all negotiations with buyers have been carried out by CARE/WWF because communities lacked the capacity to undertake the negotiations. A switch to community-led negotiations would be important to ensure long-term sustainability and to develop a mechanism that can be replicated on a larger scale across the Uluguru Mountains and in other parts of the developing world where conditions are similar.
About the World Agroforestry Centre (ICRAF)
The World Agroforestry Centre (ICRAF) is part of the alliance of the Consultative Group on International Agricultural Research (CGIAR) centres dedicated to generating and applying the best available knowledge to stimulate agricultural growth, raise farmers’ incomes, and protect the environment.
About Rewarding Upland Poor for Environmental Services (RUPES)
A long-term research programme dedicated to developing practical environmental services schemes that can be adapted to work in different countries with different circumstances.
http://rupes.worldagroforestry.org/
For more information contact:
Wambui Kamiru wkamiru@cgiar.org
Mobile No: +254 734 623 016
