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Farmers’ willingness to accept payments for ecosystem services on agricultural land: The case of climate-smart agroforestry in Ethiopia


  • Haile, Kaleab K.
  • Tirivayi, Nyasha
  • Tesfaye, Wondimagegn


This study examines smallholder farmers’ preferences for the uptake of contractual climate-smart agroforestry, which yields economic and ecosystem benefits. A discrete choice experiment was conducted with smallholder farmers in Ethiopia to elicit their willingness to participate in a payment for ecosystem services (PES) scheme that incentivizes integrating faidherbia albida (a fertilizer tree) in their mono-cropping farming system. Attributes evaluated are “number of planted trees†, “payment amount†, “payment type†, and “contract period†. The presence of heterogeneity in the choice behavior of farmers warrants the use of the generalized multinomial logit and latent class conditional logit models to allow for farmer- and class-specific preferences, respectively. The results show that farmers derive higher utility from up-front payments. Farmers also strongly prefer food as the mode of payment than cash. Moreover, low numbers of mandatory planted trees and short-term contracts are found to be essential attributes that positively affect farmers’ decisions to take-up a contractual arrangement to grow trees on their agricultural land. Our analysis also shows the presence of heterogeneity in preferences across segments of farmers in conjunction with differences in household characteristics. These findings shed light on the considerations that must be accounted for when designing and implementing environmental policies such as PES schemes that promote large-scale adoption of climate-smart agroforestry, which would transform smallholder agriculture into a sustainable farming system.

Suggested Citation

  • Haile, Kaleab K. & Tirivayi, Nyasha & Tesfaye, Wondimagegn, 2019. "Farmers’ willingness to accept payments for ecosystem services on agricultural land: The case of climate-smart agroforestry in Ethiopia," Ecosystem Services, Elsevier, vol. 39(C).
  • Handle: RePEc:eee:ecoser:v:39:y:2019:i:c:s2212041619300130
    DOI: 10.1016/j.ecoser.2019.100964

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    References listed on IDEAS

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    1. Long, Kaisheng & Omrani, Hichem & Pijanowski, Bryan C., 2020. "Impact of local payments for ecosystem services on land use in a developed area of China: A qualitative analysis based on an integrated conceptual framework," Land Use Policy, Elsevier, vol. 96(C).
    2. Hu, Yuan & Kuhn, Lena & Zheng, Wenxue, 2021. "Promote or Inhibit?the Effects of Forest Carbon Sinks Projects on Agricultural Development: Evidence from Sichuan, China," 2021 Conference, August 17-31, 2021, Virtual 315381, International Association of Agricultural Economists.
    3. Li, Guifang & Shi, Minjun & Zhou, Dingyang, 2021. "How much will farmers be compensated for water reallocation from agricultural water to the local ecological sector on the edge of an oasis in the Heihe River Basin?," Agricultural Water Management, Elsevier, vol. 249(C).
    4. Bettles, Joseph & Battisti, David S. & Cook-Patton, Susan C. & Kroeger, Timm & Spector, June T. & Wolff, Nicholas H. & Masuda, Yuta J., 2021. "Agroforestry and non-state actors: A review," Forest Policy and Economics, Elsevier, vol. 130(C).
    5. Fenta, Ayele Almaw & Tsunekawa, Atsushi & Haregeweyn, Nigussie & Tsubo, Mitsuru & Yasuda, Hiroshi & Shimizu, Katsuyuki & Kawai, Takayuki & Ebabu, Kindiye & Berihun, Mulatu Liyew & Sultan, Dagnenet & B, 2020. "Cropland expansion outweighs the monetary effect of declining natural vegetation on ecosystem services in sub-Saharan Africa," Ecosystem Services, Elsevier, vol. 45(C).

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