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Poor rural people manage vast areas of land and forest. They have the potential to be important players in protecting natural resources and providing important environmental services. An IFAD-supported project has helped build momentum and public interest in rewards for environmental services and has developed ways to offer incentives to poor farmers who protect ecosystems at the national level in China, Indonesia, Laos, Nepal, the Philippines and Viet Nam.

The date of 20 July 2006 was very important for the Wana Makmur farmers’ group from Dusun Tebu, Sumberjaya, Indonesia.

“That day we received the community forestry permit from the head of the district, guaranteeing our right to stay and farm in the protected areas,” said farmers’ group leader Darmadi (who like many Indonesians uses only one name). “In return, we are obliged to plant trees on the land, apply soil protection techniques, and care for the remaining forest.”

Darmadi and members of 18 communities representing some 6,400 farmers received permits to grow coffee while protecting the forests. An IFAD-supported project, along with several other projects of the World Agroforestry Centre’s Southeast Asia Regional Program (which coordinates the projects), has helped the farmers’ groups organize themselves and prepare documents, such as the maps needed for negotiations with governments.

Helping poor farmers secure land tenure is just one element of the IFAD-supported Programme for Developing Mechanisms to Reward the Upland Poor of Asia for the Environment Services They Provide (RUPES). The results of the first phase of the RUPES project, which ran from 2002 to 2007, were so encouraging that a second phase began in October 2008 – the Programme on Rewards for, Use of and Shared Investment in Pro-poor Environmental Services (RUPES-II). It will run for four years, building on the lessons learned in the first phase.

At each of the six RUPES action sites for the first phase, and 12 for the second, local institutions partner with the World Agroforestry Centre to implement action research aimed at developing rewards appropriate to the local context. The process of identifying environmental services and placing a value on them has led to increased awareness of watershed conservation and better land management in all RUPES sites.

Providing environmental services that many can enjoy

Almost one quarter of the poorest people in Asia live in the hills and mountainous areas that cover almost half the Asian landmass. The benefits of national and local investment in economic development have tended to bypass these people.

“Many people living in Asia’s upland communities manage landscapes that provide environmental services to outside beneficiaries,” says Dennis Garrity, Director General of the World Agroforestry Centre. “These services include clean and abundant water supplies from watersheds, biodiversity protection and stocks of carbon that alleviate global warming. Rewarding communities for providing these services reduces poverty and provides incentives to manage uplands in ways that enhance the sustainability of the lowlands, compensate for carbon emissions elsewhere and support global biodiversity conservation goals.”

Securing land tenure helps resolve conflict

In many parts of Asia, governments own and control most forest areas. Forests are an important resource for local communities. When access to them is obstructed, poverty increases – as do conflicts between forest communities and governments.

“Secure land rights can help reduce conflicts over natural resources,” says Leimona Beria, RUPES Project Coordinator. “And at the same time, it can act as a reward to farmers for being more responsible in managing forest resources and for providing environmental services.”

Land tenure rights have been a long-standing issue in Sumberjaya. The project helped resolve conflicts over land and provide tenure security in return for a commitment from upland poor people to maintain or restore environmental services.

Indeed, land tenure has been the main reward mechanism for watershed protection and carbon sequestration projects. With IFAD’s financial support, the World Agroforestry Centre and local NGOs have helped farmers develop community forestry schemes that seek secure land tenure for 25 years, after a five-year trial period. What initially started out as small RUPES national technical advisory committees in Indonesia and the Philippines have now evolved into independent, self-supporting national institutions in each country that focus on lobbying governments to revise forest regulations to include rewards for environmental services.

Improving watershed function

In Nepal, royalty payments for hydroelectric power could become the basis for environmental service payments to communities in which watersheds are used to provide water for power generation. The RUPES project was successful in securing an agreement giving the local village administration at the Kulekhani site 20 per cent of the royalties paid to the surrounding Makwanpur district. This amounts to about US$50,000 per year, which will be used to fund poverty reduction or environmental projects.

At the Sumberjaya site, the project is testing a river-care scheme. Improvements in the watershed will be measured by the reduction of sediment in the river. RUPES is paying the community on a sliding scale, starting at US$250 for sediment reduction of less than 10 per cent, and up to US$1,000 for sediment reduction of 30 per cent or more.

This reduction of silt in the river is one example of a payment for watershed services directly tied to the delivery of an environmental service. The local hydroelectric company considered this approach to be innovative and is willing to replicate it in at least two other subwatersheds.

Darsono, who lives in the village of Buluh Kapur in the Sumberjaya region, is a farmer, father of three, and the head of one of the river-care groups negotiating with the company. His group agreed to help decrease the sediment in the river flowing to the company’s dam.

Like the other farmers in the group, Darsono planted grass strips on his farm to curb erosion and prevent soil from flowing down into the dam. In return, the company provided a microhydroelectric machine to the community. It is expected that the machine will be able to provide electricity to some 40 households.

Darsono, who owns 21 penned goats, is happy about the arrangement – and pleased about an added benefit of the grass strips.

“I don’t have to feel rushed anymore, even if I haven’t collected grass for my goats the whole day,” he says. “The grass strips on my farm help me a lot. In only an hour I am able to collect enough grass. I think my fellow farmers are now becoming more motivated to grow trees on their farms to decrease sediment, as we need clean water to turn our new microhydroelectric turbine.”

Sequestering carbon provides global benefits

While watershed services have local or regional benefits, carbon sequestration is a global environmental service.

Singkarak, in Indonesia, and Kalahan, in the Philippines, were identified as potential sites for carbon markets. Research supported by national partners assisted in negotiations with buyers under voluntary mechanisms and the Clean Development Mechanism.

The World Agroforestry Centre has developed the Rapid Carbon Stock Appraisal (RaCSA), which, like other rapid appraisal tools, substantially reduces the cost of estimating the carbon-sequestering capacity of forests and agroforests. Combining the water and carbon services (effective community agroforestry would simultaneously provide both) could also reduce transaction costs. RUPES has carried out RaCSA to quantify the carbon sequestered in the forests and agroforests of Singkarak and Kalahan.

In the final year of the first phase of RUPES, two potential private buyers approached the Singkarak and Kalahan sites to discuss developing voluntary carbon market schemes. RUPES also helped lobby in favour of the ratification of the Kyoto Protocol in Indonesia. Carbon sequestration is a global environmental service.

Source: IFAD