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New Tools for Old Problems: Can Payments for Watershed Services Support Sustainable Agricultural Development in Africa?

Year of publication 2009

Author Giacomo Branca, Leslie Lipper, Bernardete Neves, Dosteus Lopa and Iddi Mwanyoka;Agriculture and Economic Development Analysis Division

Product type Document

Series title FAO Agricultural Economics Working Paper

Edition 1

Synopsis (short abstract) Agriculture affects both the quantity and quality of water available for other uses, and under current production systems the impact is often negative. Adopting sustainable land management (SLM) practices can foster a more efficient water use and increase agricultural productivity, while reducing environmental risk from water pollution and regulating flows serving downstream communities. One of the key barriers to adoption of such practices is the high upfront cost associated with SLM implementa tion, which are a disincentive to their practice by poor landowners. This paper discusses how an emerging policy tool- Payments for Environmental Services (PES)- can bridge this gap by financing initial SLM investment costs, thereby lowering the cost barriers to SLM implementation. Drawing on ongoing experience in Tanzania, we discuss the main constraints to be addressed in order to realize this potential.

Language English

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    Equitable payments for watershed services: Financing conservation and development in Tanzania
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    EPWS begins with the identification of a water problem (quantity and/or quality) downstream. this problem has significant financial impact for water users (domestic, industrial, commercial). causes of the problem are located upstream as a consequence of unsustainable land use (subsistence agriculture) by poor farmers who degrade the ecosystem.
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    Putting Payments for Environmental Services in the Context of Economic Development 2006
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    Paying for the provision of environmental services is a recent policy innovation that is attracting much attention in both developed and developing countries. The innovation involves a move away from command and control environmental policies, harnessing market forces to obtain more efficient environmental outcomes. Linking payments for environmental services (PES) to economic development and poverty reduction is an issue of importance since they may represent a new source of finance to developi ng countries, and developing countries are potentially important suppliers of global environmental services. The objective of this paper is to apply economic concepts, particularly those from natural resource and environmental economics, to a wide range of issues associated with the introduction of ES programs in the context of economic development. We introduce a typology of ES based upon economic reasoning, showing that payments for ES provide a solution to externalities and public good proble ms within the bounds of political economic constraints. Secondly, we focus on the problem of who should pay for ES: to what extent are payments likely to be covered within a global framework rather within a national or regional framework? Third, we will turn to issues of program design. We present some answers to the questions of how to target payments to achieve their objectives efficiently, and what the implications of alternative design schemes are. In particular, we focus upon the equity imp lications of ES programs and how can they affect poverty alleviation. The final section addresses issues of monitoring and enforcement of ES contracts, and we summarize the key findings in the conclusion.
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