Compensation and cost of conservation payments for biodiversity
2003
B. Minten
Under innovative environmental policies, direct conservation payments to farmers are starting to be implemented to induce them to abandon slash-and-burn agriculture as well as the use of forest resources altogether. This report uses econometric analysis to estimate appropriate compensation levels for agricultural households to abandon this practice, using Madagascar as a case study.Conclusions of study include:using a stochastic payment card format in a case study in Madagascar, it is estimated that farmers would abandon slash-and-burn agriculture and forest use for median annual compensation payments at a lower bound of around 85$ and 177$ per household respectivelyeconometric analysis shows that there exists a systematic relation between poverty and the required compensation for forgone land use. While poorer households depend relatively more on forest products, they accept a lower amount to abandon slash-and-burn agriculture and forest use. Better educated and older households require higher paymentsthis research shows how valuation of natural resources can be done through the use of contingent valuation questions in high self-subsistence developing country setting. The types of questions posed leads to insights, which could improve conservation efforts and could help in the setting of appropriate compensation levels for conservation payments for biodiversity.[adapted from author]
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