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ABSTRACT. In this paper, we examine the on-the-ground realities of upstream-downstream negotiations and transactions over ecosystem services. We explore the engagement, negotiation, implementation, and postimplementation phases of a "reciprocal water access" (RWA) agreement between village communities and municipal water users at Palampur, Himachal Pradesh, India. We aim to highlight how external actors drove the payments for ecosystem services agenda through a series of facilitation and research engagements, which were pivotal to the RWA's adoption, and how the agreement fared once external agents withdrew. In the postimplementation period, the RWA agreement continues to be upheld by upstream communities amidst evolving, competing land-use changes and claims. The introduction of cash payments for environmental services for forest-water relationships has given rise to multifaceted difficulties for the upstream hamlets, which has impeded the functionality of their forest management committee. Upstream communities' formal rights and abilities to control and manage their resources are dynamic and need strengthening and assurance; these developments result in fluctuating transaction and opportunity costs not originally envisaged by the RWA agreement. The paper demonstrates the importance of an explicit understanding of the local politics of negotiation and implementation to determine the effectiveness of compensationbased mechanisms for the supply of ecosystem services.

Incentive-based approaches have gained policy interest in linking change in agricultural land management with environmental conservation. This article investigates how scheme design influences smallholder farmers' decisions to switch to organic farming to reduce water pollution, drawing on a study at a Ramsar wetland site providing water for the city of Bhopal. Results from a choice experiment suggest that transitional payments are necessary to overcome farmer constraints to adopt organic farming, and that effective land certification has the potential to act as a self-enforcing mechanism linking farmer incomes with wetland conservation benefits.

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