At Farmers for Forests, experimenting with Payments for Ecosystem services to incentivize communities to plant trees and protect forests, over the last 3 years, this is what we’ve learned and why we’ve moved to a more “bundled PES model”:
-
The quantum of finance needed to fund the transition to more trees / agroforestry at scale is far too large for one source of funds like philanthropy or government to bear alone. Looking at a model that uses philanthropy + existing government schemes + market based funding (through carbon credits) could be a good option. We’ve written a series of 3 articles in The Print recently on this (Carbon Credit: Latest News, Photos, Videos, Information on Carbon Credit – ThePrint)
-
Why PES alone doesn’t work is that farmers simply don’t trust that someone (or even the carbon market) will pay them indefinitely to plant and protect trees (Rs. 100 or even 200 a tree for the first 3 years is usually not sufficient for all the costs) - so from the farmers’ point of view the PES needs to be coupled with (1) trees that they know are remunerative, so even if the payments from PES or carbon stop, they know they can get a good revenue from the fruit / seed harvest and (2) on-ground support not just with money or inputs but actual implementation, advisory, support in times of problems like a pest attack or fire - that builds trust, so the farmers know that we will not just support them financially but also be there to help with some of their other problems. However, in the early years we were giving everything to the farmers for free - which also got a lot of uninterested farmers into the program. Now we don’t do free but do highly subsidized inputs! The lack of on-ground support and immense paperwork is also why we’ve seen some government schemes for subsidized tree plantation not have high take-up rates
-
If we want farmers not just to plant trees, but also plant more biodiverse and native trees, we also need to assure them of a market. A farmer planting 3-4 different type of trees will need to look at 3-4 different buyers for the ultimate harvest, which is painful. So while the farmers know that if they plant mango, lemon and bamboo, they are going to get a more climate-resilient harvest if unseasonal rains destroy the mango crop (as happened some places this year), it’s still challenging for them to find markets for all 3
-
finally water and labour is a huge problem (some of which can be solved by using a drip irrigation system) but setting up a drip along just boundaries is not always easy - so farmers would prefer to use the drip irrigation model in block plantations, but the overall cost of this is fairly high (that’s where philanthropy and government schemes can play a role), supporting the initial amount required for plantation, irrigation advisory, etc. and to get the farmers through the first 3-4 years when income from harvest is low to zero. From the 4th year onwards, potentially carbon revenue can support some of the expenses the farmer faces like deweeding, harvesting, ensuring a water supply, high quality fertilizers, etc
-
implementing this model with the more venturesome farmers in the village first allows the more risk averse farmers to observe the results of their fellow farmers and then take up the model in years 3 or 4 when they see that this is yielding good results; but the initial investment to get the early adopters will be on the higher side
-
finally because you an use a lot of tech like drones and satellite data to monitor tree survival rates, carbon sequestered, biodiversity, etc to provide carbon credit buyers high quality data that proves additionality of the carbon finance and alleviates concerns around greenwashing (so the companies like Pachama that @knadh mentioned), these credits can be sold for higher amounts and some of this data could also be used to generate insights on yields, harvests located geospatially which could then be used to create more efficient clusters of produce for market linkages for the farmers