Ecosystem services and small farmers

Written by Jeffrey Sayer^[1] and Duncan Pollard^[2]

Farmers everywhere impact on the environment. In many situations their activities influence the ecosystem services upon which broader society depends. In rich countries billions of dollars are spent every year to provide farmers with incentives to manage their land in ways that are consistent with the broader public good. Farmers in Europe and N. America are paid to conserve biodiversity and the aesthetic values of the landscapes where they farm.

The hundreds of millions of small farmers in the developing world have major impacts on global ecosystem values. They have the capacity to sequester or emit major quantities of greenhouse gases; a great deal of the world’s forest biodiversity survives in the agro-forests that they nurture. Smallholders manage the upper watersheds of many of the world’s tropical rivers. Smallholders in the tropics may contribute to climate change but they are also, without question, amongst those most likely to suffer its consequences. But systems for rewarding them for their contribution to the global environment have been elusive.

One of the big issues on the agenda of the conference of the parties of the UN Framework convention on Climate Change this December in Durban will be the challenge of providing these incentives for smallholders to intensify their efforts to exercise stewardship over ecosystem services. In parallel a way has to be found to compensate them for the harm they may experience from climate change or to help them adapt to it. The recognition that this is urgent is not new – but numerous practical difficulties have limited efforts to put in place effective schemes to get payments into the hands of smallholders.

The problem has been that it is very difficult to measure the ecosystem services provided by the individual farmer and to determine the changes in her farming techniques that are needed to improve these services. The most topical current example is that of the carbon stored in the soils of small farms. We know that the amount is significant and that the potential for greater sequestration and storage is enormous. But how can we monitor the performance of the vast numbers of smallholders involved and how can payments be made efficiently.

These challenges were discussed at the Science Forum of the Consultative Group for International Agricultural Research held in Beijing in October. One exciting innovation from the private sector was presented by Nestlé. Nestlé, like several other large food companies sources many of its products directly from smallholders in developing countries. Nestlé wants to be sure that the environmental and social impacts of these contract arrangements are both sustainable and can be monitored. It therefore needs to be able to aggregate up impacts from very large numbers of smallholders. Nestlé and other food industry companies are now experimenting with the issue of smart cards to their suppliers. These cards enable data on a number of environmental and social variables to be collected alongside basic data on crop production and payments. The excitement in Beijing came from the realisation that these cards could also be used to track the ecosystem services supplied by smallholdings and to process payments to the farmers for these services.

Nestlé gave an example from Colombia where its Nespresso subsidiary has to date issued smart cards to 20,000 smallholder coffee farmers as part of a package of technologies to improve coffee productivity and sustainability. The farmers receive guidance on how to improve the productivity and quality of their coffee. The cards record this information and also the transactions with the company – volumes of coffee sold, prices paid, quality achieved. When combined with information on inputs (fertilisers, pesticides etc) this allows information on net farm income to be calculated and progress determined on contributing to the Millennium Development Goals.

Other companies are also rolling out the same technology which has the potential to be used for a wide variety of other uses such as provision of insurance schemes or as part of efforts to eliminate child labour. The ability to build up data bases of on-farm information could also eventually be the basis for payment schemes for ecosystem services - data provide by farmers could be linked to remotely sensed data or to data on water, biodiversity or soil carbon levels.

There is still some way to go but the smart card approach has the potential to break down one of the biggest hurdles to the scaling up of payment schemes for environmental services and unleash the potential to both provide a source of additional income for poor farmers and contribute to solving some of the world’s most difficult environmental problems.

[1] School of Earth and Environmental Sciences, James Cook University, Cairns, QLD 4870, Australia

[2] Sustainability Advisor, Nestlé, Vevey, Switzerland

Photo: ©FAO/Farooq Naeem