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

Content Provider	Springer Nature Link
Author	Castro, Luz Maria Calvas, Baltazar Hildebrandt, Patrick Kke, Thomas
Copyright Year	2012
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 risk-averse. 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.
Starting Page	331
Ending Page	347
Page Count	17
File Format	PDF
ISSN	01674366
Journal	Agroforestry Systems
Volume Number	87
Issue Number	2
e-ISSN	15729680
Language	English
Publisher	Springer Netherlands
Publisher Date	2012-08-08
Publisher Place	Dordrecht
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Biodiversity conservation Agroforestry Conservation payments Uncertainty Diversification Mean–variance Stochastic dominance Forestry Agriculture
Content Type	Text
Resource Type	Article
Subject	Forestry Agronomy and Crop Science

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