Ecosystem services and agriculture: Cultivating agricultural ecosystems for diverse benefits

Crop and rangelands are over 25% of the Earth's land area, and they are expanding. Agricultural ecosystems rely on a suite of supporting ecosystem services to provide food, fiber and fuel as well as a range of accompanying but non-marketed ecosystem services (ES). Ecosystem services from agriculture include regulation of water and climate systems, aesthetic and cultural services, as well as enhanced supporting services (such as soil fertility). Many of these ES are appreciated by people, but they lack markets, so they lack the incentives for provision that come with prices. For public policy decisions to take them into account, non-market valuation techniques are needed, such as travel cost, contingent valuation, hedonic valuation, and cost-based or factor-income approaches. This article offers an overview of ES from agriculture and non-market valuation methods as it introduces the articles in this special section on “Ecosystem Services and Agriculture.” Understanding how ecological functions generate ES is fundamental to management, but so too is understanding how humans perceive and value those services. Research is required both to design cost-effective incentives to provide ES and to measure which kinds of ES could provide the greatest overall welfare benefits to society. Agricultural ecosystems offer newly recognized potential to deliver more diverse ecosystem services and mitigate the level of past ecosystem disservices. This special section of Ecological Economics conveys both how these are becoming possible and the challenges to science and public policy design of turning that potential into reality.     

Valuing forest ecosystem services: What we know and what we don't

Ecosystem services valuation has achieved considerable prominence in research and policy circles in recent years. This paper reviews the studies that have tried to estimate the value of forest ecosystem services. Broadly, this study addresses the following questions: (1) What insights do these studies provide on the value of forest ecosystems? (2) What lessons do they offer from an economic and policy perspective? (3) What are the shortcomings of the existing studies, and what are the challenges and issues for future research? Evidence from a cross section of forest sites, countries and regions suggests that not only the total valuation of ecosystem services varies widely across studies but also the valuation of individual services. This variation suggests that policies to conserve ecosystems and their services should emphasise local contexts and values. This paper concludes by discussing the shortcomings of existing studies, and suggests that, among other things, future research should focus on the neglected ecosystem services, ‘disservices’, assess the role of dynamic factors and environmental catastrophes on the provision of ecosystem services, and assess the benefits of keeping forests intact versus converting them to alternative uses.     

Economic Assessment of Forest Ecosystem Services Losses: Cost of Policy Inaction

This paper presents a bottom-up methodological framework for estimating some of the key ecosystem services provided by forests biomes worldwide. We consider the provision of wood and non-wood forest products, recreation and passive use services, and carbon sequestration. The valuation framework derives per hectare estimates by applying meta-analysis, value-transfer and scaling-up procedures in order to control for the existing heterogeneities across world regions and forest biomes. The first part of the study estimates stock values per hectare for each forest ecosystem service in the baseline year 2000 and in the year 2050. Results differ per geographical region and biome. Carbon stocks represent, on average, the highest value per hectare, followed by provisioning services, passive use and recreational values respectively. The second part provides an estimation of the welfare loss (or gain) associated with policy inaction in the period 2000–2050 leading to a change in the forest area. Welfare results are mixed and require a careful interpretation, ranging from a worldwide annual benefit of + 0.03% of 2050 GDP to an annual loss of −0.13%. The highest damage is expected in Brazil due to the increasing deforestation taking place in tropical natural forests, which is causing a considerable loss of carbon stocks.     

Assessing sustainable forest management under REDD +: A community-based labour perspective

Reducing emissions from deforestation and forest degradation plus (REDD +) encourages economic support for reducing deforestation and conserving or increasing existing forest carbon stocks. The way in which incentives are structured affects trade-offs between local livelihoods, carbon emission reduction, and the cost-effectiveness of a REDD + programme. Looking at first-hand empirical data from 208 farming households in the Bolivian Amazon from a household economy perspective, our study explores two policy options: 1) compensated reduction of emissions from old-growth forest clearing for agriculture, and 2) direct payments for labour input into sustainable forest management combined with a commitment not to clear old-growth forest. Our results indicate that direct payments for sustainable forest management – an approach that focuses on valuing farmers' labour input – can be more cost-effective than compensated reduction and in some cases is the most appropriate choice for achieving improved household incomes, permanence of changes, avoidance of leakages, and community-based institutional enforcement for sustainable forest management.     

Regulating services in poverty-ecosystems dynamics： evidences from South Asia

Valuation of ecosystem services has been sought as effective tools that enable the decision makers in designing the cost effective response policies for management of ecosystems towards alleviating the poverty especially in economically poor regions like South Asia. Various directions and linkages between poverty and degradation of ecosystem and reduced flow of ecosystem services can better be understood if the regulating services like hydrological flow and carbon sequestration by forest, and nutrient cycling and bioremediation： by wetlandv can be captured in monetary unit. South Asian Countries including India. Nepal, Pakistan and Bangladesh are the hotspots of poverty where poor depend upon various ecosystem services for their livelihoods and allocation of resource for conservation of ecosystems would have additional merit if regulating services are captured and internalized into the pubtic policy.The paperfirst raises problematic issues in valuation of regulatig ecosystem services, and attempts to link it withthe dependence of poor. Second, complexities of poverty-ecosystem dynamics are discussed. Thirdly, the possible in-tervention to achieve poverty alleviation goal is analyzed with the help of some examples from accounting and valua-tion of regulating services of lndian forest. Finally, the paper suggests that greater attention is needed to do credibleand better valuation of regulating Services so that insight from these ean be used in understanding the impact of degradation of ecosysterns On poor people.     

The Impact of Land-Use Change on Ecosystem Services,Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota

Land-use change has a significant impact on the world’s ecosystems. Changes in the extent and composition of forests, grasslands, wetlands and other ecosystems have large impacts on the provision of ecosystem services, biodiversity conservation and returns to landowners. While the change in private returns to landowners due to land-use change can often be measured, changes in the supply and value of ecosystem services and the provision of biodiversity conservation have been harder to quantify. In this paper we use a spatially explicit integrated modeling tool (InVEST) to quantify the changes in ecosystem services, habitat for biodiversity, and returns to landowners from land-use change in Minnesota from 1992 to 2001. We evaluate the impact of actual land-use change and a suite of alternative land-use change scenarios. We find a lack of concordance in the ranking of baseline and alternative land-use scenarios in terms of generation of private returns to landowners and net social benefits (private returns plus ecosystem service value). Returns to landowners are highest in a scenario with large-scale agricultural expansion. This scenario, however, generated the lowest net social benefits across all scenarios considered because of large losses in stored carbon and negative impacts on water quality. Further, this scenario resulted in the largest decline in habitat quality for general terrestrial biodiversity and forest songbirds. Our results illustrate the importance of taking ecosystem services into account in land-use and land-management decision-making and linking such decisions to incentives that accurately reflect social returns.     

Ecosystem services and dis-services to agriculture

Agricultural ecosystems are actively managed by humans to optimize the provision of food, fiber, and fuel. These ecosystem services from agriculture, classified as provisioning services by the recent Millennium Ecosystem Assessment, depend in turn upon a web of supporting and regulating services as inputs to production (e.g., soil fertility and pollination). Agriculture also receives ecosystem dis-services that reduce productivity or increase production costs (e.g., herbivory and competition for water and nutrients by undesired species). The flows of these services and dis-services directly depend on how agricultural ecosystems are managed and upon the diversity, composition, and functioning of remaining natural ecosystems in the landscape. Managing agricultural landscapes to provide sufficient supporting and regulating ecosystem services and fewer dis-services will require research that is policy-relevant, multidisciplinary and collaborative. This paper focuses on how ecosystem services contribute to agricultural productivity and how ecosystem dis-services detract from it. We first describe the major services and dis-services as well as their key mediators. We then explore the importance of scale and economic externalities for the management of ecosystem service provision to agriculture. Finally, we discuss outstanding issues in regard to improving the management of ecosystem services and dis-services to agriculture.     

Wage subsidies, work incentives, and the reform of the Austrian welfare system

We analyze the employment and income effects of a needs-based minimum benefit system (“Bedarfsorientierte Mindestsicherung”) which has recently been introduced in Austria. The aim of this reform was to reduce poverty as well as to increase work incentives for recipients of social assistance. On the basis of a behavioral microsimulation model we show that this new system slightly increases employment but reduces incomes for the poorest households remaining unemployed. As an alternative, we analyze a budgetary neutral reform proposal which reduces financial incentives for marginal employment and provides a wage subsidy rewarding working longer hours. This alternative reform would yield larger positive employment effects, but more households would suffer from income losses. Overall, income inequality and poverty are affected little, however, both under the new social welfare system and the alternative reform proposal.     

The relation between forest clearance and household income among native Amazonians: Results from the Tsimane' Amazonian panel study, Bolivia

The Amazon rain forest harbors some of the world's richest biological diversity. During the twentieth century, two types of actors cleared that forest: native Amazonians and outside encroachers. Of the two actors, we know more about what drives outside encroachers to clear forest than about what drives native Amazonians to clear forest. The past research focus has served well because during the twentieth century outside encroachers cleared most of the Amazonian forest. But the past research focus needs to be expanded because native Amazonians are claiming de jure stewardship of the forests they inhabit, and with tighter jurisdiction over those forests will likely come changes in the amount of forest native Amazonians clear. Prior research in rural areas of low-income nations suggests that household income affects household forest clearance. To estimate the effects of household real income on the total forest area (old-growth + fallow) cleared by households we use a panel composed of five annual household surveys (2002-2006, inclusive) from 324 households of a native Amazonian society in Bolivia (Tsimane'). We control for household and village fixed effects and use an instrumental variable for household income. We find positive and significant household real income elasticities of forest clearance of 0.35 and 0.47 and an increase in forest clearance of 5.3%/year. The main finding stood up well to sensitivity analysis. These estimates suggest that in the near future, the forest in the Tsimane' territory will likely face increasing pressure from the Tsimane' themselves, not just from outside encroachers.     

Indigenous livelihoods, slash-and-burn agriculture, and carbon stocks in Eastern Panama

Improved crop–fallow systems in the humid tropics can simultaneously sequester atmospheric carbon emissions and contribute to sustainable livelihoods of rural populations. A study with an indigenous community in eastern Panama revealed a considerable biophysical potential for carbon offsets in small-scale slash-and-burn agriculture through longer fallow periods, improved fallow management, secondary forest development, and agricultural intensification. Based on soil and biomass carbon measurements, estimated annual sequestration rates amount to 0.3−3.7 t C ha^− 1 yr^− 1. Despite such potential, the economic benefits of initiatives aimed at sequestration of carbon in the community are likely to be rather unequally distributed within the community. Heterogeneity in livelihood strategies and uneven asset endowments among households – factors often overlooked in the ongoing carbon and sustainable development debate – are expected to strongly affect household participation. Indeed, only the better-endowed households that have also managed to diversify into more lucrative farm and non-farm activities are likely to be able to participate in and thus benefit from improved crop–fallow systems that capture carbon. Economic, ethical, institutional, and technical concerns need to be taken into account when designing community carbon management and investment plans.     

Swidden Agriculture in Developing Countries

Small farmers in many tropical developing countries practice swidden agriculture. A key aspect of swidden agriculture is the time period during which the land is left fallow. This paper uses a new ecological–economic approach to study the fallow period and to determine the optimal length of this period in swidden agriculture. The authors first construct a theoretical model of a parcel of forest land that has been cleared for swidden agriculture. It is then shown how the dynamic and the stochastic properties of this cleared land can be used to derive two objective functions for a small farmer that are ecologically meaningful. Finally, using these two objectives, a probabilistic approach to the determination of the optimal length of the fallow period is discussed. In this approach, the focus of the small farmer is on maintaining the ecological and the economic sustainability of swidden agriculture on the cleared parcel of forest land (CPFL).     

Socioeconomic Impacts of Public Forest Policies on Heterogeneous Agricultural Households

Nepal has a long history of returning public forests to local people as part of its community forestry programme. In principle the community forestry programme is designed to address both environmental quality and poverty alleviation. However, concern has been expressed that forest policies emphasise environmental conservation, and that this has a detrimental impact on the use of community forests in rural Nepal where households require access to public forest products to sustain livelihoods. To study the effect of government policies on forest use, an economic model of a typical small community of economically heterogeneous households in Nepal was developed. The model incorporates a link between private agriculture and public forest resources, and uses this link to assess the socioeconomic impacts of forest policies on the use of public forests. Socioeconomic impacts were measured in terms of household income, employment and income inequality. The results show that some forest policies have a negative economic impact, and the impacts are more serious than those reported by other studies. This study shows that existing forest policies reduce household income and employment, and widen income inequalities within communities, compared to alternative policies. Certain forest policies even constrain the poorest households?? ability to meet survival needs. The findings indicate that the socioeconomic impacts of public forest policies may be underestimated in developing countries unless household economic heterogeneity and forestry??s contribution to production are accounted for. The study also demonstrates that alternative policies for managing common property resources would reduce income inequalities in rural Nepalese communities and lift incomes and employment to a level where even the poorest households could meet their basic needs.     

Converting Forests to Farms: The Economic Benefits of Clearing Forests in Agricultural Settlements in the Amazon

Agricultural expansion into tropical forests is believed to bring local economic benefits at the expense of global environmental costs. The resulting tension is reflected in Brazilian government policy. The national agrarian reform program has settled farm families in the Amazon region since the 1970s, with the expectation that they will clear forests in order to farm the land. On the other hand, recent Brazilian policy initiatives seek to reduce deforestation to mitigate climate change. We contribute to the policy debate that surrounds these dual goals for the Amazon by estimating the marginal effects of new agricultural land on the full income and assets of farm settlers over a 13-year period from 1996 to 2009. Using micro panel data from agrarian settlements where forest was being rapidly cleared, and controlling for factors that would otherwise confound the relationship, we estimate the effect of converting forest to agriculture on total household income to estimate the opportunity cost of conserving forest. Our measure of income reflects any re-allocation of resources by utility maximizing households and any productivity effects due to loss of forest ecosystem services. The estimated effect of new agricultural land on income is positive, but small relative to the income per hectare of previously cleared land. However, we show that income increases investment in physical assets, which raises households’ income generating capacity and future accumulation of assets. Thus, while there is only a small immediate income gain from clearing more forest, the long-term effects on wealth are still substantial. This demonstrates that given the right conditions, conversion of forest to agricultural land can be an impetus for asset accumulation by smallholders. It also highlights the importance of considering the indirect and long-term welfare benefits of new agricultural land when assessing the opportunity costs of forest conservation.     

Optimal Management of Soil Quality Stocks and Long-Term Consequences of Land Degradation for Smallholder Farmers in Malawi

While soil degradation has long-term consequences, static models which form the bulk of studies on this topic in Africa, do not account for the inter-temporal dimensions of optimal resource management. This paper used an inter-temporal optimisation framework, which considered soil in a time-dependent resource extraction perspective. We have demonstrated that soil degradation is causing an enormous reduction in productive value of smallholder land in Malawi. Current user cost of soil quality among smallholder farmers, which represents annual loss in productive value of land, was estimated to be US$21 per hectare. Based on this value and land area under smallholder agriculture in Malawi, economic costs of soil degradation among smallholder farmers were estimated to amount to 14% of the agricultural GDP for Malawi. Although smallholder farmers’ current practices are sub-optimal to Steady State solutions, they are above static solutions. This demonstrates that smallholder farmers have some private incentives to invest in the soil quality stock. Smallholder farmers internalise some of the dynamic costs of soil degradation under the current practices. However, a sensitivity analysis on a slightly higher discount rate indicates that SS solutions closely resemble the prevailing smallholder farming practices. This suggests that smallholder farmers may be overexploiting soil quality stock because they have a high time preference. That is, they value the current consumption more than their future consumption and wellbeing. High levels of poverty in Malawi and serious lack of viable alternatives to subsistence farming may be influencing such behaviour. Promoting more viable land use alternatives than subsistence farming and formuling policies that help transform smallholder agriculture into a profitable enterprise will not only increase the cost of degrading the soil, but also encourage farmers to invest in the soil quality stock.     

Valuation of ecosystem services from rural landscapes using agricultural land prices

Agricultural lands, primarily managed for crops and livestock production, provide various ecosystem services (ES) to people. In theory, the economic value of the service flows that can be captured privately is capitalized into land prices. This study proposes an integrative framework to characterize the ecosystem services associated with agricultural lands. Using that framework, we demonstrate how hedonic analysis of agricultural land prices can be used to estimate the private values of land-based ES. The model is estimated with data from southwestern Michigan, USA. Results suggest that ES values are associated with lakes, rivers, wetlands, forests and conservation lands in rural landscapes. Ecosystem services that support direct use values, such as recreational and aesthetic services, are likely to be perceived by land owners and capitalized in land prices. Some regulating services that provide indirect use values may be partially capitalized in a land parcel's relationship to natural resources and landscapes. Other ES from the land parcel and its surroundings are unlikely to be capitalized due to lack of private incentives, unawareness, or small perceived value. The private ES values measured in this study highlight opportunities to design cost-effective public policies that factor in the value of private benefits from agricultural lands.     

Forest incomes and rural livelihoods in Chiradzulu District, Malawi

This paper examines forest income among rural dwellers in one of Malawi's most densely populated districts, Chiradzulu. 160 households were interviewed in two sites, only 20 km apart, purposely selected on the basis of access to a forest reserve. People are extremely poor, with 97% having incomes of less than 1 USD/day. Forest income constitutes around 15% of total income; only non-farm income (47%) and agriculture (28%) rank higher. The poorest segment depends more on forest income than the least poor group, but the medium income group exhibits the highest dependence. Fuelwood constitutes the major source of such income followed by fodder. The incomes mainly support current consumption. People with better access to the forest reserve have higher total income, forest income, and relative forest income. As revealed through a Gini-coefficient analysis, forest resources have an important income equalizing effect across rural households. A particular group of resource poor farmers (8.1% of sample), with little access to agricultural land and a high representation of female heads, derives an average of 65% of their income from the forest. An important policy lesson is that restricting people's access to forest resources can have substantial effects on household livelihoods and welfare, and would serve to increase income inequalities in the area. Livelihood researchers should now recognize the substantial income from forest resources.     

集体林区生态公益林产权市场化探讨

在阐述生态公益林产权市场化可能的类型的基础上,分析当前阻碍集体林区生态公益林产权市场运行的主要因素,提出促进生态公益林产权市场化运行的对策建议,主要包括明晰和优化公益林产权,加强公益林生态服务功能价值评估,创建有利于公益林产权市场发展的外部环境。     

Medical emergencies and farm productivity in Côte d'Ivoire

The lack of health insurance for smallholder farmers in most sub-Saharan African countries hurts the families and can also negatively affect agriculture production, exports, and tax revenues. This paper analyzes the linkage between medical emergencies and agriculture exports and the corresponding tax revenues for smallholder farmers in Côte d'Ivoire. It uses two complementary datasets: the 2016 Consultative Group to Assist the Poor (CGAP) smallholder survey and the 2015 Côte d'Ivoire living standard survey. The paper finds that a medical emergency is negatively and significantly associated with a decrease in the likelihood that a smallholder farmer cultivates cocoa of 3.9 percentage points, driving them into poverty and reducing productivity at the lower quantiles. The paper then estimates that medical emergencies can be correlated with the decline in cocoa exports of $853 million and in tax revenues of $125 million, representing 0.2% of the Ivorian gross domestic product (GDP) in 2017.     

A study on financial opportunity costs of growing local varieties of sorghum in Ethiopia: Implications for on-farm conservation policy

The increasing interest in on-farm conservation is driven by its diverse attractive features — its participatory nature and its flexible and dynamic features; its capacity to maintain not only crop diversity but the knowledge that evolves with it; and the chance it offers to link conservation with utilization and farmers' livelihoods. To implement this strategy on a sustainable basis, policy incentives are crucial. This paper argues that opportunity costs farmers face have a role to play to design sound policy incentives. Taking sorghum as an example, opportunity costs have been examined in this paper using data collected from 198 farmers in Eastern Ethiopia. The average opportunity costs suggest the size of the required policy incentives and they are the basis to estimate the national conservation costs for on-farm conservation. The regression analysis shows that opportunity costs increase with access to output markets and extension, output price, access to input supply, experience in growing improved varieties, and the relative importance of the crop. On the contrary, plot quality, input price, and oxen ownership are reducing the opportunity costs. The paper then concludes outlining the policy implications of the empirical findings to incentive design for on-farm conservation.     

Soil biota, ecosystem services and land productivity

The soil environment is likely the most complex biological community. Soil organisms are extremely diverse and contribute to a wide range of ecosystem services that are essential to the sustainable function of natural and managed ecosystems. The soil organism community can have direct and indirect impacts on land productivity. Direct impacts are those where specific organisms affect crop yield immediately. Indirect effects include those provided by soil organisms participating in carbon and nutrient cycles, soil structure modification and food web interactions that generate ecosystem services that ultimately affect productivity. Recognizing the great biological and functional diversity in the soil and the complexity of ecological interactions it becomes necessary to focus in this paper on soil biota that have a strong linkage to functions which underpin ‘soil based’ ecosystem services. Selected organisms from different functional groups (i.e. microsymbionts, decomposers, elemental transformers, soil ecosystem engineers, soil-borne pest and diseases, and microregulators) are used to illustrate the linkages of soil biota and ecosystem services essential to life on earth as well as with those associated with the provision of goods and the regulation of ecosystem processes. These services are not only essential to ecosystem function but also a critical resource for the sustainable management of agricultural ecosystems. Research opportunities and gaps related to methodological, experimental and conceptual approaches that may be helpful to address the challenge of linking soil biodiversity and function to the provision of ecosystem services and land productivity are discussed. These include: 1) integration of spatial variability research in soil ecology and a focus on ‘hot spots’ of biological activity, 2) using a selective functional group approach to study soil biota and function, 3) combining new and existing methodological approaches that link selected soil organisms, the temporal and spatial dynamics of their function, and their contribution to the provision of selected ‘soil based' ecosystem services, 4) using understanding about hierarchical relationships to manage soil biota and function in cropping systems, 5) using local knowledge about plants as indicators of soil quality, remote sensing and GIS technologies, and plant-soil biota interactions to help understand the impacts of soil biota at landscape scale, and 6) developing land quality monitoring systems that inform land users about their land's ecosystem service performance, improve capacities to predict and adapt to environmental changes, and support policy and decision-making.