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

The relation between land-use changes, carbon sequestration, and biodiversity is closely monitored to provide precise estimates of the contribution of different land uses to these “global public goods.” The effects of payments on the adoption of silvopastoral systems, and farmers’ views, especially related to risk, are the main socioeconomic variables monitored. The goal is to test whether payments for environmental services are needed to tip the balance in favor of the adoption of silvopastoral systems.

Payments will total about US$1.2 million. To sustain payments in the long term, the project is exploring various funding sources. The Government of Costa Rica has already earmarked general tax funds for the incentives. Possible revenues—a cost recovery approach—may come from those benefiting directly from biodiversity conservation, such as municipalities benefiting from improved water quality.

Benefits and Impacts

Socioeconomic surveys, technical/information workshops, and preliminary studies have begun. Three hundred farms will participate in the payment program. Initial feedback indicates that:

• Farmers’ response to the incentive scheme has been positive. Farmers say that although the payment offered is small compared to the costs of establishing the more intensive silvopastoral systems, the payment is very important, as is the technical assistance.
  
  
• The most likely land-use changes are more trees in pasture, improved pasture, live fences and windbreaks, and “protein” banks (shrubs and other vegetation for livestock).
  
  
• Policy makers see this project as an opportunity to improve the environment and productivity. The Minister of Environment of Costa Rica has already indicated that silvopastoral activities will be eligible for government environmental payment schemes.

Lessons Learned and Issues for Wider Applicability

A virtual platform⁵ has been established by FAO-LEAD (Livestock, Environment, and Development Initiative, cofinancier and partner in the project) for the dissemination of information, dialogues, and e-mail conferences on issues related to the project. The platform allows the project to be known worldwide and to benefit from interaction with global experts.

Experiences in similar projects have shown that economic incentives, such as those developed in the Latin America and Caribbean project, are especially important for ensuring buy-in from individual participants, because payments are linked directly to participation level. Payments had previously been used with hesitation, as land rights were poorly established, but this project circumvented the risks associated with weak land rights by not requiring land titles to make payments.

Initial experience has shown the need for well-established institutional mechanisms to manage and monitor the process and to value the opportunity cost of alternate land uses when calculating appropriate payments.