Objectives: Determine how livestock farmers make decisions on land use changes to benefit from PES; Will PES increase tree cover on livestock farms? Determine the impacts of PES: C sequestration, biodiversity and water resources; and livelihoods of rural poor Develop methodology for PES Project: Integrated Silvopastoral Approaches To Ecosystem Management GEF Funded – Muhammad Ibrahim

Definition Silvopastoral systems are land use systems in which trees or shrubs are combined with livestock and pasture production on the same unit of land

ColombiaNicaragua Costa Rica Total Group A (control) Group B (PES + TA) Group C (PES) Total Number of farmers collaborating PES - payment of environmental services TA - Technical assistance

Arrangement for payment of environmental services TechnologiesSSP Monitoring institution Livestock farmer Application of Land use index Global beneficiaries EnvironmentalServices Fund for payment $$

Payment is based on annual increments in relation to base line. Years Ecological Points/farm Base line Incremental

# Land use IndexIndex CarbonBiodiversity Total index 2 Degraded pasture Native pasture without trees 0,10,10,2 8 Live fences 0,30,30,6 11 Fodder bank 0,30,50,8 14 Native pasture high tree density* 0,50,51,0 20 Improve pasture high tree density* 0,60,71,3 23 Young secondary vegetation 0,60,81,4 24 Riparian forest 0,80,71,5 27 Secondary forest 0,91,01,9 28 Primary forest 1,01,02,0 Index by land uses and its potential to carbon sequestration and conservation of biodiversity * > 30 tree ga -1

. Silvopastoral systems are win win systems: 1)Increase productivity of systems 2)Generation of enviornmental services 3)Improve livelihoods of farmers and rural poor

Impact of payment of environmental services on land use changes-Colombia

b a Impact of payment of environmental services on percent increase area in forest

Who will benefit from PES Lessons learnt from GEF-SSP project -Small farmers- higher PES/ha compared to large farms: However large farms significantly higher payments/farm -Small farms- higher base line- question of additionally and how small farms will benefit? Impacts on policy setting

Payment for environmental services

Relationship between base line ecological index (points ha ) and incremental ecological index (points ha -1 ) Base line

Environmental services: carbon sequestration

Environmental services: conservation of biodiversity

Social and economics services: labor

Barriers for adoption of SSP -High cost for implementation - Labor availability - Lack of technical assistance and incentives -Transaction cost

Silvopastoral project: rentability of practices Note: Farm of 20 ha, Nicaragua Benefits of SSP practices NPV (50 years, 10%) US$439 IRR11.8%

Silvopastoral Project: profitability of SSP with PES Benefits of SSP practices Without PES With PES NPV (50 years, 10%) US$439US$1,301 IRR11.8%17.6% Note: Farm of 20ha, Nicaragua

Impact of chage land use on labor at landscape level Total area: 4794 ha

Some concerns for pro-poor policies for PES Land tenure: private vs. communal land management What Environmental services: carbon localised and more easy to monitor, Biodiversity and water needs a landscape focus and therefore PES to cluster of farmers or communities– what arrangements for PES -Permanence and Risk of ES: eg forest fires -Transaction cost for monitoring and certification -Incentives for making changes- small farmers needs capital for establishing technologies- policies of microfinancing

Added value of products: value chains to benefit from PES: Added value of products: value chains to benefit from PES: Ecological livestock farms: certified organic beef in Nicaragua with premium prices of 30% more than that of traditional systems. In addition farmers received PES