Module 5 - Latin America and Caribbean: Payments for Environmental Services in Silvopastoral Systems

In Central America, approximately 38 percent of the total land area is classified as permanent pasture. Permanent pasture area has increased substantially over the last decade, partly owing to the conversion of tropical rainforest to pasture. In Colombia, Costa Rica, and Nicaragua, the rate of deforestation in natural forests over the past decade has been between 6 and 25 percent. Much past deforestation in tropical areas could be accounted for by distorted incentives, such as subsidized interest rates or export subsidies used to promote large ranching operations. More recent deforestation has largely been a function of poverty, unemployment, and inequitable land distribution, and landless poor people have cleared tropical forests for subsistence farming. While current practices of preserving forests within protected areas are necessary, they are not sufficient to ensure forest protection.

Project Objectives and Description

Established to protect forests lying outside protected areas, the Regional Integrated Silvopastoral Approaches to Ecosystem Management Project encompasses sites in Colombia, Costa Rica, and Nicaragua. The project will institute a system of incentive payments to farmers who adopt silvopastoral techniques on degraded pasture lands. Techniques include replanting degraded lands with trees, legumes, and fast-growing shrubs that are environmentally sound and financially productive so that the resulting system broadly mimics a forest ecosystem. The silvopastoral project consists of five components:

• Ecosystem enhancements through institutional capacity building and the development of community training programs.
  
  
• Environmental monitoring to measure changes in land use, carbon sequestration, biodiversity, and water quality.
  
  
• An eco-services fund to pay for environmental services provided by the silvopastoral systems.
  
  
• Policy formulation and dissemination focusing on sector and environmental policies associated with the sustainable intensification of livestock production.
  
  
• Project management through international NGOs.

Payments for environmental services are distributed through individual contracts with farmers based on land-use changes compared with the baseline. These land-use changes are measured using satellite and global positioning system technology, which help control monitoring costs. While development programs typically make payments ex ante (that is, for costs of inputs), participating farmers are paid ex post (that is, when they have made the change).