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Secondary forest valuation on family farms in the Eastern Brazilian Amazon

Secondary forest valuation on family farms in the Eastern Brazilian Amazon . Jan Börner (CIAT, Amazon Initiative) Arisbe Mendoza (ECOSUR). Outline. Why value secondary forests? Evidence on the fallow-yield relationship

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Secondary forest valuation on family farms in the Eastern Brazilian Amazon

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  1. Secondary forest valuation on family farms in the Eastern Brazilian Amazon Jan Börner (CIAT, Amazon Initiative) Arisbe Mendoza (ECOSUR) LBA 17-19.11.08, Manaus

  2. Outline • Why value secondary forests? • Evidence on the fallow-yield relationship • A two-step approach to value the role of capoeira in slash-and-burn farming • Policy and technology scenarios • Implications for designing conservation incentives LBA 17-19.11.08, Manaus

  3. Why value secondary forests? • > 8.7 million ha on farms in the Brazilian Amazon are covered by secondary forests • About a quarter is frequently converted for agricultural purposes (crops, pastures) • Depending on agricultural practices and technology, farmers may perceive secondary forest growth as cost or benefit factors • i.e., conservation incentives can only be effective if these factors are taken into account LBA 17-19.11.08, Manaus

  4. Secondary forests, pastures and staple crop fields Secondary forest re-growth reduces the productivity of pastures Secondary forest fallows supply nutrients and other ecosystem services in crop producing S&B systems LBA 17-19.11.08, Manaus

  5. Positive fallow-length/yield relation rarely empirically proven Breakdown points could not be empirically established Yield is only one of the factors influencing farming decisions Fallow/yield relationship is only half the story Evidence on the fallow-yield relationship Cited in Mertz (2002) Agroforestry S. LBA 17-19.11.08, Manaus

  6. Key questions • How will policy incentives affect secondary forest cover and related ES? • What value to farmers attach to fallows (their length)? • What impact does access and use of different technologies have on this value? • How do conservation incentives (e.g. PES) affect secondary forest cover and value under different technology scenarios? LBA 17-19.11.08, Manaus

  7. ZEF Bonn NAEA/UFPA An example from the Eastern Brazilian Amazon LBA 17-19.11.08, Manaus

  8. Pasture Recently burned Cassava Fallow vegetation Passion fruit LBA 17-19.11.08, Manaus

  9. value of fallowing in the S&B system plot-level profit function estimation plot-level annual crop production data from 450 plots farm-level data from 270 farm-households model calibration classification (cluster analysis) value of secondary forest fallows at farm-level farm-level bio-economic land use modeling technical coefficient data from 30 representative farm-households Legend: Result Method Data Analysis Approach LBA 17-19.11.08, Manaus

  10. Results of econometric model II Obs.: Mean and standard errors of farm elasticities are calculated using one observation for each farm evaluated at mean farm prices. The standard errors are calculated by bootstrapping on 500 data re-sampling. LBA 17-19.11.08, Manaus

  11. Results of econometric model (plot-level) Elasticity Estimates of Profit with Respect to Farm Resources Equivalent to R$ 385 per ha of 6 year old fallow! Obs.: Mean and standard errors of farm elasticities are calculated using one observation for each farm evaluated at mean farm prices. The standard errors are calculated by bootstrapping on 500 data re-sampling. LBA 17-19.11.08, Manaus

  12. Results of bio-economic model(farm-level) R$1 ≈ 0.28 Euro LBA 17-19.11.08, Manaus

  13. Model validation • No statistically significant bias in predicted 1st-year land use across farm types • Long-term trends in average fallow age, and fallow/cropland ratio correspond to farmers’ observations of the past Model versus Reality LBA 17-19.11.08, Manaus

  14. A selection of available technologies? Farm-household choices LBA 17-19.11.08, Manaus

  15. What would happen if farmers adopted? Income Secondary forest/fallows Fallow age Sequestered carbon Labor demand Adoption of continuous cropping + mechanical land preparation reduces fallow valuation by 71% to R$/ha 38 LBA 17-19.11.08, Manaus

  16. Payments for environmental services R$1 ≈ 0.28 Euro LBA 17-19.11.08, Manaus

  17. Competitiveness CER price at CCX Avoided emissions (t CO2 per farm) in T=20 LBA 17-19.11.08, Manaus

  18. Conclusions & Implications • For representative family farms in the Northeastern Amazon annual payments of > R$/ha 100 are needed to induce carbon sequestration • Technology access reduces absolute carbon content on farms, but allows capturing additional carbon at 50% lower costs • Hence, PES needed to be differentiated to increase scheme efficiency and reduce rent capture by capitalized and well off farmers LBA 17-19.11.08, Manaus

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