Private and Social Values derived from a Tunisian cork oak agroforestry production system

1. Second World Congress of AgroforestryNairobi, Kenya, 23-28 August 2009Session 31A :Rewards for Environmental Services of Agroforestry Private and Social Values derived from a Tunisian cork oak agroforestry production system Hamed Daly-Hassen and Ameur Ben Mansoura INRGREF, Tunisia Dalyhassen.hamed@iresa.agrinet.tn

2. Outline • Introduction • Objectives • Methods • Results • Conclusions

3. Introduction : The Cork Oak Forest • The second most important forest cover in Tunisia, and one of the world’s hot spots in biodiversity conservation. • Lack of clearly defined property rights • Main activities : cork stripping, livestock grazing, fuelwood collection • Animal production insures more than half of the household’s income (Chebil & al. 2008).

4. Failure to consider full economic values • Farmers and local forest users maximize their current commercial incomes from an intensive use of natural resources at present (subsistence economy) • Costs of degradationare not considered • Non market benefits and off site effects are not usually considered • Need for compromises in order to maximize the social values and benefits.

5. Objectives • To compare between private and social values generated by the Tunisian cork oak forests. • Assess the external costs associated with the resulting forest degradation. • Value the environmental services provided by the country’s cork oak forests. • To identify appropriate economic instruments for the purpose of attaining greater sustainability of forest management.

6. Methods : Private Benefits (PB) vs Social Benefits (SB) • PB : Benefits to public owner + Consumption by local population of common resources at low or no price (semi public goods) • SB : Gains which accrue to the Tunisian society which is wholly affected by the cork oak production and consumption of private and local benefits.

7. Private Economic Value (PEV) vs. Social Economic Value (SEV) • PEV = PB - PC With: PB = Private Benefts, and PC = Private Costs Wheras : • SEV = (PB + EB) – (PC + EC) With: PB and PC as above, and EB = External Benefits, and EC = External Costs

8. Benefitsgenerated by the use of the Cork OakAgroforestry System

9. Costsrelated to the use ofCork OakAgroforestry System

10. Linking Cork Oak Production to Social Benefits Watershed protection Gain in agricultural income Reduced dam sedimentation Carbon sequestration Reduced carbon emissions value at carbon shadow price Recreation WTP for visiting forests Social welfare enhanced Biodiversity Opportunity cost of cork oak production

11. Linking Cork Oak Forest Degradation to Social Costs Overgrazing Cost of forage substitute Reduced forage potential Soil erosion Increased dam sedimentation Loss of agricultural income Tree cutting, forest degradation and lack of regeneration Loss of current and future cork and acorns revenues Reduced potential of cork and acorns Resource depletion Forest fires

12. Valuation techniques

13. Results : I. Private Benefits (PB) • Private benefits attained $96.8/ ha. • Equally distributed among the State (forest owner) and the local population.

14. Results : II. Private Costs (PC) • Private costs attained $ 33.4/ ha. • The overuse of common resources results in the induced private costs.

15. Results : III. External Benefits (EB) • External benefits estimate was $ 24.9 /ha.

16. Results : IV. External Costs (EC) Total external cost : $ 7/ha.

17. Results : V. Private Benefits (PB) and Social Benefits (SB) • Forest benefits are underestimated when ES are not considered • Degradation induces high social costs.

18. Conclusions (I) • Market failure factors are mainly due to the lack of exchange prices. • Need to develop a National Accounting System • Economic valuation is a key issue for the use of appropriate economic instruments • Each product and service should be well measured • Service providers and users should be well identified

19. Conclusions (II) • Payment for environmental services : • Involvement of downstream water users. • More resources are needed from the global community concerned by carbon sequestration and biodiversity conservation. • Compensation for loss of income. • Comparison with the cost of degradation. • It can be fully covered by the resource rent.

20. Private and Social economic could be enhanced by a sustainable use ($/ha) through compensation ($/ha, 2005) • Farmers better off: more profit from sustainable use • Public owner and society are better off: avoid higher loss from current practice