ABSTRACT. Understanding the effects of payments on the adoption of reforestation in agricultural areas and the associated food-carbon trade-offs is necessary to inform climate change policy. Economic viability of reforestation under payment per hectare and payment per tonne schemes for carbon sequestration was assessed in a region in southern Australia supporting 6.1 Mha of rain-fed agriculture. The results show that under the median scenario, a carbon price of 27 A$/tCO 2 -e could make onethird of the study area (nearly 2 Mha) more profitable for reforestation than agriculture, and at 58 A$/tCO 2 -e all of the study area could become more profitable. The results were sensitive to variation in carbon risk factor, establishment costs, and discount rates. Pareto-optimal land allocation could realize one-third of the potential carbon sequestration from reforestation (16.35 MtCO 2 -e/yr at a carbon risk factor of 0.8) with a loss of less than one-tenth (107.89 A$M/yr) of the agricultural production. Both payment schemes resulted in efficiencies within 1% of the Pareto-optimum. Understanding food-carbon trade-offs and policy efficiencies can inform carbon policy design.
Cocoa is a key crop for small-scale farmers in Sulawesi, Indonesia. Decline in cocoa yield and cocoa price fluctuation have negatively affected the income of small-scale farmers. An approach to address the sustainability of small-scale cocoa farming is to diversify the household income via cocoa-goat mixed farming. This study aimed to assess whether cocoa-goat mixed farming was a viable and profitable enterprise for small-scale farmers in West Sulawesi by using cost benefit analysis (CBA). Three CBA models were developed to compare profitability of an existing medium-scale cocoa-goat mixed farm located in West Sulawesi with hypothetical small-scale cocoa monoculture and cocoa-goat mixed farming. The CBAs were informed by an interview using structured questionnaire and literature search. The principal CBA assessment criterion was net present value (NPV) while benefit cost ratio (BCR) and internal rate of return (IRR) were supplementary. Sensitivity analysis measured the impact of changes in key parameters on profit. Over a 25-year production cycle, the medium-scale cocoa goat mixed farm is a profitable enterprise, earning an estimated profit of USD 90,403. At small-scale level, the findings suggest that engaging in small-scale cocoa goat mixed farming has potential to increase household income by 27% of profit from the cocoa monoculture.
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