Conservation policies that boost farm yields may ultimately undermine forest protection, argues study
April 17, 2013

Rising agricultural profitability due to higher prices, improved crop productivity, and forest conservation itself could make it increasingly difficult for conservation programs tied to payments for ecosystem services to succeed, warns a study published this week in the journal Proceedings of the National Academy of Sciences.

The prediction is based on a model that forecasts the potential impact of agricultural intensification on small farmers' behavior in the Democratic Republic of Congo (DRC). Whereas subsistence farmers may now accept a pittance for abandoning low-yielding agriculture, in the future, higher-yields from improved genetic stock (including genetically modified crops), increased fertilizer use, and better farming practices would necessitate far higher payments to persuade farmers to keep forests standing. In other words, a program that compensated farmers based on the carbon stored in forests — like the nascent Reducing Emissions from Deforestation and Degradation (REDD+) mechanism — would have difficulty competing against increasingly industrialized agriculture.

"Our research suggests that as agriculture becomes more intensive, the small payments successful at incentivizing forest conservation today could increase to well beyond what is considered economically efficient, or even feasible," said study lead author Jacob Phelps of the National University of Singapore. "We anticipate that similar patterns are likely across the tropics, including in places like Indonesia."

Relationship between REDD+ policies, agricultural intensification, and deforestation. New REDD+ policies drive agricultural intensification, which increases future agricultural rents and incentivizes forest clearing for agricultural expansion. A number of feedbacks (e.g., reinvestment, in-migration) create further incentives for expansion. Whether these result in deforestation or land sparing for conservation depends on two mediating factors (1): robust forest sector governance and (2) whether REDD+ payments match future agricultural rents.

The results add weight to arguments made elsewhere. For example, Greenpeace and the Rainforest Foundation UK both cited the issue in their criticism of McKinsey's cost curve for mitigating greenhouse gas emissions from deforestation. The activist groups said that REDD+ wouldn't compete be able to financially with industrial activities, including large-scale commercial agriculture and mining, and thereby fail to address major drivers of deforestation. Several studies also suggested that financial returns from REDD+ would not be sufficiently high to compete with palm oil production, which is one of the most profitable forms of land use in the tropics. One paper even argued that REDD+ could undermine less yield-oriented forms of agriculture like organic farming.

In the PNAS study, Phelps and colleagues found that financial break-even points for REDD+ versus cassava and maize cultivation in DRC would require higher and higher carbon prices as crop productivity increased.

"Increasing agricultural rents are likely to incentivize future agricultural expansion, including through forest encroachment."

Subistence agriculture like this in Suriname may be cheap to stop now, but as farming becomes more industrialized like the oil palm plantation in Borneo below, it will be increasingly costly to discourage.

The study seems to highlight the risk that while a program like REDD+ could work in the short-term while crop prices and yields are moderate, it may fail to protect forests in the long-run when prices and yields are higher. The authors add that forest conservation initiatives could even have a perverse impact if they focus on intensifying agricultural production.

"Our conceptual framework, supported by the illustrative model of the DRC, highlights how conservation policies that promote intensification anticipating automatic long-term forest conservation and emissions reductions may face unintended outcomes," they write. "Curiously, conservation policies that promote or impose an intensification agenda on extensive farmers may actually spur future agricultural expansion."

While illustrative, the study does come with some important caveats when evaluated on a scale beyond DRC. For one, it doesn't directly account for the likelihood that higher profitability could encourage expansion into non-forest areas like degraded lands. Brazil and Indonesia both boast tens of millions of hectares of such lands. It also excludes the value of forest products — timber, food, and other non-wood forest products — that might continue to be available to local communities under REDD+ programs. Nor does it factor in potential payments for other ecosystem services (PES) like water and biodiversity. Nonetheless the research does raise significant points of consideration for the design of REDD+ and other PES schemes.

"Conservation policies that overlook future agricultural rents may fail to promote long-term conservation," the authors write. "While our model was illustrative, rather than predictive ... it highlights the possible impacts of agricultural intensification to long-term tenability of conservation incentives such as REDD+, and highlights under-investigated issues such as the importance of recurring conservation incentives and viability of financial versus nonfinancial incentives."

CITATION: Jacob Phelps et al. Agricultural intensification escalates future conservation costs. Proceedings of the National Academy of Sciences for the week of April 15, 2013.

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CITATION: (April 17, 2013).

Conservation policies that boost farm yields may ultimately undermine forest protection, argues study.