Innovation of the Week: Rewarding Farmers for Providing Ecosystem Services

By Jesse Chang

The Sasumua dam supplies Nairobi, Kenya with 20 percent of its fresh water, but land use changes have started to contaminate this important source of water. Forests and wetlands are being converted into agricultural land and commercial plots. This reduces water flow during the dry season and increases surface runoff during the wet season. It also increases soil erosion and the run-off of chemical and biological pollutants from agricultural fields. This negatively impacts the livelihoods of both city dwellers and smallholders living in the watershed.

Farmers in Kenya are being compensated for their environmental services under the PRESA research project. (Photo credit: Bernard Pollack)

Pro-poor Rewards for Environmental Services in Africa (PRESA), is a research project created by the World Agroforestry Centre to improve livelihoods by enhancing ecosystem services. PRESA works on eight sites in the highlands of East and West Africa and collaborates with national partners, research institutions, universities, and NGOs to generate and share information that supports payments for ecosystems. By rewarding environmental stewards, instead of punishing wrongdoers, PRESA uses market-based approaches to induce behavioral change among ecosystem stewards to reduce poverty and conserve the environment.

The market-based system works by rewarding the individual or community that provides a certain environmental service. Building a grass waterway 20 kilometers long and 3 meters wide in the Sasumua watershed, for example, can reduce soil sedimentation by 20 percent. This amounts to savings of US$23,000 a year in purification costs for the Nairobi Water Company, which operates downstream and provides the city with clean water. The cost of maintaining the waterway is only US$3,000 a year for the 500 households involved, making it a win-win scenario for both farmers and urban residents.

Rewards can come in many different forms. The community-based rewards can be a powerful incentive for protecting the environment—schools, roads, and wells can be built in return for using sustainable farming techniques. The farmers in Sasumua prefer assistance to implementing land conservation measures over cash payments, and want the Nairobi Water Company to help them establish rain water harvesting techniques.

The major issue is setting a price that is agreeable to both buyers and sellers. In many cases, it is difficult to establish a price for an environmental service, and because buyers can’t choose their suppliers, the two parties must strike a deal. But PRESA’s work in Africa shows that rewarding communities for environmental services can be a very effective way to support rural livelihoods while conserving the environment at the same time. Supporting poor rural farmers and including them into business discussions can have big payoffs for all—especially the environment.

Do you know of similar initiatives that offer rural communities financial compensation for the environmental services that they provide? Tell us in the comments!

Jesse Chang is a research intern with the Nourishing the Planet project.

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