Using PES to Secure Livelihoods and Environmental Services in Coffee Agro forests

Project summary

Nearly half of the world’s 25 million coffee farmers are smallholder farmers who depend on coffee production as their main source of income. They often produce coffee in shade systems, i.e. coffee fields with shade trees of different diverse composition. These agroforests provide a great array of environmental services, from biodiversity conservation to watershed protection. With increasing costs of production and the ever fluctuating coffee prices, coffee farmers are increasingly driven to replace agroforestry practices with tree-less practices such as extensive pastures or intensive agriculture. Other drivers of change also play a role. The result is a loss of environmental services that may have local, regional and global impacts. Payments for environmental services (PES) are economic incentive mechanisms that seek to sustain environmental service and may have socio-economic benefits at the same time. However, existing PES schemes are often not suited for smallholder farmers and tree cover improvement in agroforestry systems. This PhD project investigates the drivers of land use change among smallholder coffee farmers, the extent of the land use change and impacts on tree cover, and the potential of PES to sustain coffee production in agroforestry systems. A further objective is to investigate the role of local institutions, NGOs and cooperatives as intermediaries in PES schemes and their facilitation of smallholder participation. Field work, mainly in the form of household surveys, will be carried out in the Matagalpa region in Nicaragua and in the central regions of Costa Rica with CATIE as the primary collaborating partner. The project is related to several ongoing projects at CATIE, among these the EU funded CAFNET project that aims to improve the livelihoods of coffee communities while conserving natural resources. Expected results of the PhD are four articles, policy briefs and presentations at relevant international conferences. The project findings will be shared with local stakeholders, such as the FONAFIFO, the national PES office in Costa Rica, and contribute to the development of economic incentives for environmental management and sustainability in the smallholder coffee sector.

Outputs

The PhD project investigated the loss of environmental services among shade coffee farmers, and examined the role of local organizations for participation of smallholders in programs of payments for environmental services (PES). Among 441 surveyed coffee producers inside a biological corridor, 50% of the shade coffee area had been converted to mainly pasture and sugar cane during the last decade. Using econometric modeling, factors such as age, family labor and use of shade tree products were found to reduce the probability of land use change, while engagement in non-coffee activities increased the probability. The results have contributed to a multiple stakeholder effort to develop a new payment type targeted at shade coffee producers, thereby potentially reversing the ongoing land use changes. An investigation of three local organizations acting as intermediaries in the national PES program, supplemented by surveys of participating and non-participating landowners, revealed how intermediary institutions differ in their ability and willingness to include smallholders in the PES program. The conditioning factors included aspects of costs, networks with local landowners, values of the organization, and the local land development history. The results will inform policy makers and PES practitioners and theorists on the importance of PES program structures and involved actors when participation of smallholders is an aim.