Environmental changes in biodiversity hotspot ecosystems of
South Ecuador: RESPonse and feedback effECTs (FOR2730)

Abstract:

Sustainable intensification of agricultural lands might reconcile the conservation of tropical forest with food production,but in-depth assessments considering uncertainty and extreme values are missing. Uncertainty prohibits mapping probabilities to potential future states or ranking these states in terms of their likelihood. This in turn hampers the assessment of possible decision outcomes. Here, we use simulations to investigate how uncertainty may influence the social acceptability of alternative land-use strategies to halt tropical deforestation (including sustainable intensification), based on indicators representing farmer satisfaction. The results show how extreme values (worst values) for indicators of farmer satisfaction may undermine the adoption of sustainable intensification. We demonstrate that a pure forest conservation strategy leads to lower food production, but outperforms a sustainable intensification strategy that maintains food security. Pure forest conservation performed better, i.e., could secure higher farmer satisfaction, than sustainable intensification across a range of indicator groups. This suggests strong barriers to achieving sustainable intensification. Using agricultural subsidies breaks the dominance of pure forest conservation by enhancing the economic returns of sustainable intensification. We discuss the importance of access to labor and farmers’ preferences for the use of already cleared lands, which achieved the worst values under sustainable intensification and conclude that any assessment of land-use strategies requires careful consideration of uncertainty and extreme values.

Abstract:

Economic approaches based on the probabilistic framework were applied to support land use management in Ecuador. Compensations to prevent further land conversion resulted lower when a concave utility function was used. Diversification applied to risky conventional farming showed that sustainable options are suited for portfolios if correlation between returns is kept low; in every case at least two options constituted the optimal combinations. Thus, despite limitations of bio-economic models, they constitute a reliable tool for normative orientations at the farm level.

Abstract:

Organic farming is a more environmentally friendly form of land use than conventional agriculture. However, recent studies point out production tradeoffs that often prevent the adoption of such practices by farmers. Our study shows with the example of organic banana production in Ecuador that economic tradeoffs depend much on the approach of the analysis. We test, if organic banana should be included in economic land-use portfolios, which indicate how much of the land is provided for which type of land-use. We use time series data for productivity and prices over 30 years to compute the economic return (as annualized net present value) and its volatility (with standard deviation as risk measure) for eight crops to derive land-use portfolios for different levels of risk, which maximize economic return. We find that organic banana is included in land-use portfolios for almost every level of accepted risk with proportions from 1% to maximally 32%, even if the same high uncertainty as for conventional banana is simulated for organic banana. A more realistic, lower simulated price risk increased the proportion of organic banana substantially to up to 57% and increased annual economic returns by up to US$ 187 per ha. Under an assumed integration of both markets, for organic and conventional banana, simulated by an increased coefficient of correlation of economic return from organic and conventional banana (? up to +0.7), organic banana holds significant portions in the land-use portfolios tested only, if a low price risk of organic banana is considered. We conclude that uncertainty is a key issue for the adoption of organic banana. As historic data support a low price risk for organic banana compared to conventional banana, Ecuadorian farmers should consider organic banana as an advantageous land-use option in their land-use portfolios.