Avoiding the loss of shade coffee plantations: how to derive conservation payments for risk-averse land-users

Abstract

We usually have only limited knowledge about the economic consequences of land-use decisions, thus they are uncertain. We analyze the implications of this uncertainty on conservation payments (CP) to preserve wildlife-friendly shade coffee production in southwest Ecuador, when conversion to maize is the most profitable alternative. Our objective is twofold: First, we analyze the consequences of applying Stochastic Dominance (SD) to derive CP, an approach making only minimal assumptions about the preferences of farmers. Second, we investigate the effects of land-use diversification to reduce CP by allowing for shade coffee on part of a landholding, and maize production on what remains. CP derived by SD turned out to be at least twice the amount calculated by an alternative method which maximizes a concave utility function-US$ 166 to US$ 294 ha -1 year -1 instead of US$ 86 ha -1 year -1 . Given this result, we doubt that the assumptions underlying SD are reasonable for farmers, who are known to be riskaverse. Allowing for land-use diversification has a significant impact on CP. The optimal portfolio share of shade coffee is 27 % and for maize 73 % for moderately risk-averse farmers-without any CP. A larger share of shade coffee is preferable for strongly risk-averse farmers-51 and 49 % maize. The amount of CP necessary to encourage the expansion of shade coffee to 75 % is US$ 40 ha -1 year -1 (for moderately risk-averse) and US$ 19 ha -1 year -1 (for strongly risk-averse farmers). Stimulating diversification may thus help to significantly reduce CP necessary to preserve less profitable agroforestry options.

Influence of Tree Cover on Diversity, Carbon Sequestration and Productivity of Cocoa Systems in the Ecuadorian Amazon

“…In addition, the areas of greatest deforestation have a high potential for inclusion in REDD+ strategies, even under scenarios of low market prices for C. For these reasons, the maintenance of carbon by avoided deforestation, combined with the promotion of sustainable cocoa production systems, would be a viable option to balance conservation, diversity and climate change mitigation at the landscape level in the Sumaco region of Ecuador. So far, studies have focused on products and services for potential or actual sale, but the intrinsic heritage value from these To increase C stocks, tree richness could be increased by introducing productive trees as has been done in other production scenarios in Ecuador (Castro et al, 2013) and Central America (Somarriba et al, 2013). However, according to our results, these changes could decrease the productivity of the cocoa Monoculture about 1.5 times, thus decreasing revenue by 999 USD/ha/yr.…”

Estimation of Suitable Areas for Coffee Growth Using a GIS Approach and Multicriteria Evaluation in Regions with Scarce Data

“…In our study, shading is used by 92% of local farmers. Producers use timber and fruit trees, such as faique (Acacia macracantha), banana (Musa x paradisiaca), guaba (Inga feuilleei), mango (Mangifera indica), which besides generating shadow are used as extra income (Castro et al, 2013). Other authors (Pérez-Nieto et al, 2005;Blanco and Aguilar, 2015) mention the advantages of having shade coffee plantations, because it favors the development of the crop, prevents soil erosion helping the retention of nutrients.…”

“…Its production is important for the family economy of this province, constituting an extra source of income for the small producers (Castro et al, 2013). Also, it is important to be considered the best coffee in the country, obtaining the first place in the contest "Taza Dorada".…”

Water Balance and Soil Moisture Deficit of Different Vegetation Units under Semiarid Conditions in the Andes of Southern Ecuador

“…Nonetheless, in semiarid regions, the economic development of the local population depends principally on agriculture, and therefore, on local water availability [12,13], for which reason the observed altered climate conditions and population growth, as well as unsustainable water management practices endanger the availability of this hydrological resource [14]. The agriculture in these regions is generally executed by means of irrigation systems to guarantee food production [15,16], in which water is transported and applied mainly by means of irrigation canals [17], which is why a large amount of water is lost through evaporation, drainage, deep percolation and subsurface runoff, leading to higher production costs and lower plant productivity [2].…”