As natural habitats have come to be increasingly restricted and degraded, increasing attention has been paid to conserving biodiversity in agricultural landscapes. This can be both an end in itself, driven by the realization that agricultural landscapes can have high levels of biodiversity, and a means of complementing conservation in protected areas (Pagiola and others, 1997; Daily and others, 2001). Classical approaches to conservation, attempting to preserve pristine habitats within protected areas, are necessary but insufficient in the face of growing pressure on land.
Efforts to enhance biodiversity in agricultural landscapes need to consider the incentives faced by individual land users, who decide what practices to use on their land, generally without considering what biodiversity benefits different land use practices may have. When biodiversity-friendly agricultural practices are the most profitable, there is a happy convergence of private and social interests. This is the case of jungle rubber in Indonesia, for example (Thiollay, 1995; Tomich and others, 1998). But biodiversity-friendly agricultural practices are not necessarily the most profitable from the perspective of individual land users. In some cases, the profitability of biodiversity-friendly practices can be boosted by inducing consumers to pay a premium for their outputs, as in the case of shade-grown coffee (Pagiola and Ruthenberg, 2002). But this approach requires complex certification schemes and is not always feasible.
A further approach, which has received increasing attention in recent years, is to provide direct payments for the provision of biodiversity services (Pagiola and Platais, forthcoming; Pagiola and others, 2002; Landell-Mills and Porras, 2002; Ferraro, 2001: Ferraro and Kiss, 2002). This approach internalizes what had been an externality, ensuring that it is taken into consideration in decisionmaking.
This is the approach taken by the Regional Integrated Silvopastoral Ecosystem Management Project (RISEMP), which is being implemented with financing from the Global Environment Facility (GEF). The project is piloting the use of payments for environmental services as a means of generating biodiversity conservation and carbon sequestration services in watersheds at three sites in Colombia, Costa Rica, and Nicaragua.
This paper examines the contract mechanisms developed for the RISEMP. It begins by describing the specific context in which the project is being implemented, that of degraded pastoral areas in Central and South America. It then describes the potential for silvopastoral practices to address this problem, which would provide both local and global benefits. But the on-site benefits of silvopastoral practices alone are insufficient to justify their adoption by farmers. Paying land users who adopt these practices for the biodiversity and carbon sequestration services they generate can tip the balance towards adoption. The RISEMP is piloting an effort to do so. The factors which led to the design of the contract used in the RISEMP are described next. These include the technical characteristics of the practices being promoted, the specific biodiversity and carbon sequestration being sought, and the economics of silvopastoral practices from the land users’ perspective. As this is a novel approach, the RISEMP includes extensive monitoring efforts.
