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Valuing soil conservation benefits of agroforestry: contour hedgerows in the Eastern Visayas, Philippines

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  • Subhrendu Pattanayak
  • D. Evan Mercer
Abstract
Trees can be considered as investments made by economic agents to prevent depreciation of natural assets such as stocks of top soil and water In agroforestry systems farmers use trees in this manner by deliberately combining them with agricultural crops on the same unit of land. Although advocates of agroforestry have asserted that soil conservation is one of its primary benefits, empirical estimates of these benefits have been lacking due to temporal and spatial complexity of agroforestry systems and the nonmarket aspect of soil capital assets. This study designs and applies a bio‐economic framework for valuing the soil conservation benefits of agroforestry. The framework is tested with econometric analysis of data from surveys of households in Eastern Visayas. Philippines, where USAID/Government of Philippines introduced contour hedgerow agroforestry in 1983. By constructing a weighted soil quality index that also incorporates measures of soil fertility, texture and color in addition to erosion, we extend previous economic studies of soil resources. This index is regressed on a variety of farming and site specific bio‐physical variables. Next, we use a Cobb‐Douglas profit function to directly relate agricultural profits and soil quality. Thus, the value of soil conservation is measured as a quasi‐rent differential or the share of producer surplus associated with a change in soil quality. Because this framework assumes the existence of markets, the assumption is tested by analysing the statistical significance of consumption side variables, e.g., number of household members, on production side variables, e.g., profits. Instrumental variables are used to handle the endogeneity of the soil index in the profit equation. Seemingly unrelatedregression (SUR) analysis is used to accommodate correlation of errors across the soil and profit equations. Regression results reveal the importance of agroforestry intensity, private ownership, land fragmentation, and familiarity with soil conservation as positive covariates of soil quality. Analysis of production data indicate the importance of market prices, education, farming experience, farm size, topography, and soil quality as positive covariates of household profits Investments in agroforestry to improve or maintain soil capital can increased annual agricultural profits by US$53 for the typical household, which is 6% of total income. However, there are significant up‐front costs. Given that small farmers in tropical uplands are important players in the management of deteriorating soil and forest resources, policy makers may want to consider supporting farmers in the early years of agroforestry adoption.

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  • Subhrendu Pattanayak & D. Evan Mercer, 1998. "Valuing soil conservation benefits of agroforestry: contour hedgerows in the Eastern Visayas, Philippines," Agricultural Economics, International Association of Agricultural Economists, vol. 18(1), pages 31-46, January.
    • Handle: RePEc:bla:agecon:v:18:y:1998:i:1:p:31-46
    DOI: 10.1111/j.1574-0862.1998.tb00485.x
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    3. Hean, Robyn L. & Cacho, Oscar J. & Signor, Anthony & Mullen, John D., 2000. "The Potential Role of Farm Forestry in the Wheat-Sheep Zone of NSW," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123659, Australian Agricultural and Resource Economics Society.
    4. Molua, Ernest L., 2005. "The economics of tropical agroforestry systems: the case of agroforestry farms in Cameroon," Forest Policy and Economics, Elsevier, vol. 7(2), pages 199-211, February.
    5. Franco, Juan Agustin & Calatrava-Leyva, Javier, 2006. "Adoption of Soil Erosion Control Practices in Southern Spain Olive Groves," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25787, International Association of Agricultural Economists.
    6. Daniel Solís & Boris E. Bravo-Ureta & Ricardo E. Quiroga, 2007. "Soil conservation and technical efficiency among hillside farmers in Central America: a switching regression model ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), pages 491-510, December.
    7. Dinh, Hoang Huu & Nguyen, Trung Thanh & Hoang, Viet-Ngu & Wilson, Clevo, 2017. "Economic incentive and factors affecting tree planting of rural households: Evidence from the Central Highlands of Vietnam," Journal of Forest Economics, Elsevier, vol. 29(PA), pages 14-24.
    8. Rasul, Golam & Thapa, Gopal B., 2006. "Financial and economic suitability of agroforestry as an alternative to shifting cultivation: The case of the Chittagong Hill Tracts, Bangladesh," Agricultural Systems, Elsevier, vol. 91(1-2), pages 29-50, November.
    9. Laura Schmitt, 2009. "Developing and applying a soil erosion model in a data-poor context to an island in the rural Philippines," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 11(1), pages 19-42, February.
    10. Jolejole, Christina B. & Swinton, Scott M. & Lupi, Frank, 2009. "Incentives to Supply Enhanced Ecosystem Services from Cropland," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49356, Agricultural and Applied Economics Association.
    11. Solis, Daniel & Bravo-Ureta, Boris E. & Quiroga, Ricardo E., 2006. "Technical Efficiency and Adoption of Soil Conservation in El Salvador and Honduras," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25784, International Association of Agricultural Economists.
    12. Choudhury, Hari K. & Goswami, Kishor, 2013. "Determinants of expansion of area under jatropha plantation in North East India: A Tobit analysis," Forest Policy and Economics, Elsevier, vol. 30(C), pages 46-52.
    13. André Vizinho & David Avelar & Cristina Branquinho & Tiago Capela Lourenço & Silvia Carvalho & Alice Nunes & Leonor Sucena-Paiva & Hugo Oliveira & Ana Lúcia Fonseca & Filipe Duarte Santos & Maria José, 2021. "Framework for Climate Change Adaptation of Agriculture and Forestry in Mediterranean Climate Regions," Land, MDPI, vol. 10(2), pages 1-33, February.
    14. Calatrava-Leyva, Javier & Franco, Juan Agustin & Gonzalez-Roa, Maria del Carmen, 2005. "Adoption of Soil Conservation Practices in Olive Groves: The Case of Spanish Mountainous Areas," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24661, European Association of Agricultural Economists.
    15. Goswami, Kishor & Choudhury, Hari K., 2015. "To grow or not to grow? Factors influencing the adoption of and continuation with Jatropha in North East India," Renewable Energy, Elsevier, vol. 81(C), pages 627-638.
    16. Wu, Yu & Mullan, Katrina & Biggs, Trent & Caviglia-Harris, Jill L. & Harris, Daniel & Sills, Erin O., 2018. "Do Forests Provide Watershed Services to Local Populations in the Humid Tropics? Evidence from the Brazilian Amazon," 2018 Annual Meeting, August 5-7, Washington, D.C. 274012, Agricultural and Applied Economics Association.
    17. Solis, Daniel & Bravo-Ureta, Boris E. & Quiroga, Ricardo E., 2006. "The Effect Of Soil Conservation On Technical Efficiency: Evidence From Central America," 2006 Annual meeting, July 23-26, Long Beach, CA 21345, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. repec:phd:pjdevt:pjd_2010_vol__37_no__1c is not listed on IDEAS
    19. Tuan, Tran Hu & Lindhjem, Henrik, 2008. "Meta-analysis of nature conservation values in Asia & Oceania: Data heterogeneity and benefit transfer issues," MPRA Paper 11470, University Library of Munich, Germany.
    20. Singha, Chandan, 2021. "Marginal value of sub-watershed treatment on profit in Darjeeling district, India," Land Use Policy, Elsevier, vol. 101(C).
    21. Drupp, Moritz A. & Baumgärtner, Stefan & Meyer, Moritz & Quaas, Martin F. & von Wehrden, Henrik, 2020. "Between Ostrom and Nordhaus: The research landscape of sustainability economics," Ecological Economics, Elsevier, vol. 172(C).

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