1. From Orchards to Cropland: the Consequences and Perspectives of Land-Use Change Anton Strokov 1, Aleksey Bryzzhev 2, Alisher Mirzabaev 3 Pavel Krasilnikov 1, Alexey Sorokin 1 and Sergei Kiselev 1 (strokov@ecfs.msu.ru) 1 – Lomonosov Moscow State University, Moscow, Russia 2 – V.V. Dokuchaev Soil Science Institute, Moscow, Russia 3 – Center for Development Research (ZEF), University of Bonn, Bonn, Germany Introduction During the period 2000-2010 three thousand hectares of orchards were transformed to cropland in Azov district of Rostov region in southern Russia (fig.1). There were three main reasons for this: 1)some of the trees were too old and couldn’t bear fruit; 2)cropland has shorter investment cycles and that time wheat and sunflower were more profitable than growing fruits; 3)the necessity of Russia to fulfill its need in grain and sunflower to stabilize the food security situation after economic collapse of 1990’s. The shift from orchards to cropland caused land degradation: soil compaction, organic carbon and nutrients loss, deterioration of water regime. The first objective of this study was to estimate Total Economic Value (TEV) of orchards and cropland including ecosystem (ES) values in Azov district of Rostov region in Russia. The second objective was to calculate different scenarios of cost of action vs cost of inaction against land degradation. Soil data The humus quantity and content and nutrient balance were estimated using Regional agrochemical service ROSTOVSKIY data. The phosphorous and organic content decline serve as an evidence of soil degradation on the transformed area. The potassium quantity increased because of particular fertilizer use. Estimation of TEV Besides soil nutrition other ecosystem services were distorted because of land use change. There’s uncertainty with estimating local TEV’s for orchards and cropland because of broad variety of ecosystem services and lack of data for calculating their values. We used several methods for measuring appropriate TEV’s of orchards and cropland: 1) agricultural production value per hectare (includes only provisional services); 2) authors expert ES coefficients (table 2); 3) China ES coefficients based on Li et. al., 2008; and two optimum variants based on trial-and-error method. Cost of action (CA) vs cost of inaction We estimate the economic effect of land degradation in Russia on district level (following von Braun et al., 2013 and Nkonya et al., 2014). Table 3. Comparison of different methods for estimating TEV of orchards and cropland, in USD per ha Table 2. Local ecosystem services coefficients for scenario 2 (authors expert values based on literature review) Conclusion Five scenarios were calculated to find what relation of prices of orchards and cropland will be an efficient incentive to bring 3 thousand ha of cropland back to orchards on a 20 year period. For this the cost of action vs cost of inaction with the method proposed by von Braun et al. 2013 and Nkonya et al. 2014 was applied. In this method we used the establishment price of orchards at 983 USD per ha and maintenance price at 871 per ha (based on Rostov practical experiments). We also use this approach to calculate optimum TEV’s for orchards. The 4-th and 5-th TEV estimates are results of trial-and-error method with the lowest local TEV estimation for cropland (550 USD per ha) and the highest local TEV for cropland (3801 USD per ha) taken from the 1 st and the 3 rd scenarios respectively. The results show that TEV for cropland in Azov district of Rostov region could lay in diapason 550-3801 USD per ha. The diapason for orchards TEV would be 2070-8550 USD per ha. But only if the orchards / cropland TEV ratio is in the diapason 2.25-3.76, than it would be valuable in the sense of ecosystem provision. Only in this case the cost of inaction will be higher than cost of action, which will be a significant reason to recultivate 3 thousand hectares of land for orchards again. Table 1. Average humus content and nutrients balance in Azov district agricultural land on the fields where orchards were transformed to cropland, ton per ha in layer 20 cm. Methods Figure 1. Azov district of Rostov region in Russia. Note: studied area is marked by blue star. Source: based on David Liuzzo, 2007. Notes for estimation of TEV The coefficients were multiplied on price equivalent (Li et al. 2008 method) of the price for crop production in Azov district (2000-2010 average) = 550 USD per ha. The TEV’s in these scenarios were deflated to 2010 prices. All of these estimates confirmed the idea that orchards were more valuable than croplands in terms of TEV - whether they included only provisional services or supporting and regulating also (table 3). However the values of coefficients for different ecosystem services might vary because of different estimation techniques and methodology. In our study the ratio of services provides by cropland and orchards varied. We put different TEV’s in the cost of action vs cost of inaction formulas to find actions potentially beneficial for the local society. Results The total crop area in the district was 210 thousand ha in 2010. The area of orchards transformed into cropland is relatively small – 3 thousand ha. The possible decrease in crop acreage in the future would be easily compensated by yield increase – 20% potential according to the lowest border of Schierhorn et al, 2014 estimates. Figure 2. The yields in the agricultural organizations of Azov district (1000 kg per ha) Features of the studied area Soil data200020022008 Phosphorusn/a54 Potassiumn/a5370 Humus180n/a174 including organic carbon n/a10299 Ecosystem servicesOrchardsCropland Carbon sequestration +- Soil protection and nutrient conservation +- Water regulation +- Pollination ++ Food production ++ Recreation +- TOTAL coefficient estimate for Azov district 62 TEV Provi- sional services Authors ES coef. China ES coef. Optimum MIN Optimum MAX Sc1Sc2Sc3Sc4Sc5 Orchards 8423300800020708550 Cropland550110038015503801 Ratio (orchards / cropland)1,533,002,103,762,25 Costs of land degradation due to land-use change, if p1>p2. In our case p1 = TEV of orchards, and p2 = TEV of cropland: Cost of taking action (CA) against land degradation due to land use change: Cost of inaction will be the sum of annual losses due to land degradation: The discount rate was taken 20% because of the risks in Russian agriculture: high bank credit rates, tariff increase, logistic and quality strict control, climate vulnerability. The results are in table 4. Variables Provisional services Authors ES coef.China ES coef.Optimum MINOptimum MAX Sc1Sc2Sc3Sc4Sc5 TEV for orchards, USD per ha8423300800020708550 Orchards establish price, USD per ha983 Orchards maintenance price, USD per ha871 CA in 20 years, USD20 468 06228 363 22467 135 64520 468 06267 135 645 Inaction in 20 years, USD4 191 61331 580 64660 275 97021 819 35668 171 132 ratio inaction/CA 20 years $0,20$1,11$0,90$1,07$1,02 ratio CA/inaction in percentage 20 years488%488%90%90%111%94%98% TEV for cropland, USD per ha550110038015503801 TEV ratio (orchards / cropland) 1,533,002,103,762,25 Table 4. The economic effect of land degradation counteraction in Azov district of Rostov region in Russia, in 2010 prices. N S