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SCP in Agriculture and Rural Development

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Promot<strong>in</strong>g the protection of ecosystem services, <strong>in</strong>clud<strong>in</strong>g carbon mitigation, biodiversity,<br />

<strong>and</strong> l<strong>and</strong>scape<br />

A comb<strong>in</strong>ation of regulations, charges <strong>and</strong> environmental taxes, <strong>in</strong>centive payments, st<strong>and</strong>ards,<br />

awareness-rais<strong>in</strong>g, research, <strong>and</strong> <strong>in</strong>stitution <strong>and</strong> capacity build<strong>in</strong>g have been deployed to promote<br />

the protection of the natural resource base while improv<strong>in</strong>g the liv<strong>in</strong>g conditions of those liv<strong>in</strong>g <strong>in</strong><br />

rural areas. At the same time, agricultural support <strong>in</strong>struments, particularly subsidies <strong>in</strong> developed<br />

countries, cont<strong>in</strong>ue to encourage <strong>in</strong>tensive <strong>and</strong> unsusta<strong>in</strong>able agricultural practices. Hence, while<br />

below we focus on different policy <strong>in</strong>struments used to promote the protection of ecosystem<br />

services, the need for policy reform lead<strong>in</strong>g to the removal of perverse subsidies must be part of<br />

any discussion <strong>in</strong> this context.<br />

Taxes <strong>and</strong> charges to <strong>in</strong>tegrate directly the environmental costs of agricultural activities <strong>in</strong>to<br />

farmers’ production decisions have been less used <strong>in</strong> agriculture than <strong>in</strong> other sectors, reflect<strong>in</strong>g<br />

logistical difficulties <strong>and</strong> poorly def<strong>in</strong>ed property rights. Direct payments for ecosystem services are<br />

more common, with some governments around the world pay<strong>in</strong>g rural l<strong>and</strong>owners to steward their<br />

l<strong>and</strong> <strong>in</strong> ways that will generate ecosystem services while at the same time promot<strong>in</strong>g rural<br />

development. The Conservation Reserve Program <strong>in</strong> the United States, for <strong>in</strong>stance, compensates<br />

farmers <strong>in</strong> exchange for their protection of endangered wildlife habitat, open space <strong>and</strong>/or<br />

wetl<strong>and</strong>s. Colombia, Ecuador, Mexico <strong>and</strong> South Africa target their payments toward stewards of<br />

watershed services. Other examples <strong>in</strong>clude payments for protection of a wide range of ecosystem<br />

services (biodiversity, watersheds, carbon sequestration) <strong>in</strong> Costa Rica, payments for<br />

preserv<strong>in</strong>g semi-natural pastures <strong>in</strong> Sweden, <strong>and</strong> ecological payments for extensive meadows <strong>and</strong><br />

animal welfare <strong>in</strong> Switzerl<strong>and</strong>. 14 15<br />

In some rural areas <strong>in</strong> develop<strong>in</strong>g countries, households lack most types of assets <strong>and</strong> hold very<br />

small plots of l<strong>and</strong> while operat<strong>in</strong>g <strong>in</strong> remote, <strong>in</strong>hospitable environments. Innovative approaches to<br />

reduce poverty <strong>in</strong> such environments require l<strong>in</strong>k<strong>in</strong>g isolated communities with distant markets <strong>and</strong><br />

communities, <strong>and</strong> <strong>in</strong>clude tapp<strong>in</strong>g <strong>in</strong>to markets for ecosystem services, which the poor may be<br />

supply<strong>in</strong>g <strong>in</strong> large amounts. Another option is tapp<strong>in</strong>g <strong>in</strong>to specialty markets for identity-based<br />

goods <strong>and</strong> services, <strong>in</strong>clud<strong>in</strong>g susta<strong>in</strong>able tourism, <strong>and</strong> <strong>in</strong> particular ethnic/ecological tourism <strong>and</strong><br />

fair trade. 16<br />

Information <strong>and</strong> communication technologies can be important tools <strong>in</strong> realis<strong>in</strong>g these<br />

opportunities. High transaction costs are the s<strong>in</strong>gle largest barrier to l<strong>in</strong>k<strong>in</strong>g these remote, but<br />

culturally <strong>and</strong>/or biodiversity rich rural areas with the global community, <strong>and</strong> <strong>in</strong>clude costs that<br />

range from f<strong>in</strong>d<strong>in</strong>g <strong>in</strong>formation about the market (Who <strong>and</strong> where are the potential buyers? What<br />

st<strong>and</strong>ards must be complied with?), to gett<strong>in</strong>g <strong>in</strong> touch with potential customers <strong>and</strong> negotiat<strong>in</strong>g<br />

14 OECD (2004), <strong>Agriculture</strong> <strong>and</strong> the environment: lessons learned from a decade of OECD work.<br />

15 http://ecosystemmarketplace.com/pages/static/about.conservation_backgrounder.php.<br />

16 Berdegué, J.A. (2005), “Pro-poor <strong>in</strong>novation systems”, Background paper prepared for IFAD, December.<br />

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