A GGLOMERATION PAYMENTS IN THE S HIRE R IVER B ASIN A NDREW B ELL 1 , - PowerPoint PPT Presentation

A GGLOMERATION PAYMENTS IN THE S HIRE R IVER B ASIN A NDREW B ELL 1 , L AWRENCE M APEMBA 2 , G REGORY P ARKHURST 3 , T IM B ENTON 4 , K LAUS D ROPPELMANN 5 , P ATRICK T EMBO 2 , J OHN K AMANGA 2 , AND C LAUDIA R INGLER 1 1 I NTERNATIONAL F OOD P OLICY R ESEARCH I NSTITUTE 2 B UNDA C OLLEGE 3 W EBER S TATE U NIVERSITY 4 U NIVERSITY OF L EEDS 5 I NDEPENDENT C ONSULTANT J ANUARY 15, 2014 ESPA P ROJECT I NCEPTION W ORKSHOP L ONDON , UK

M OTIVATION Land degradation due to poor • management of topsoil a key issue for Malawi: • Livelihood impacts due to reduced productivity • Landscape impacts on water quality, aquatic habitat, and hydropower infrastructure Of particular concern in the • Shire River Basin

C ONSERVATION A GRICULTURE (CA) A suite of practices aimed to improve soil structure and • conservation, and water retention In Malawi, this suite typically includes: • Crop rotation or Mulching Zero (minimum) Tillage intercropping (what not to do)

C ONSERVATION A GRICULTURE (CA) At the farm scale At the landscape scale • Reduce kinetic impact of rain • Mitigating effects of climate Mulching • Reduce evaporation losses change • Reduce soil temperature • Carbon credits possible Minimum • Avoid build up of hard pans • Reduced flood events down Tillage • Reduce risk of erosion stream • Improve infiltration capacity • Reduced sediment load • Prevent pest build-up • Reduced nutrient and • Improve nutrient availability pesticide loading of ground Crop • Improve fertilizer use efficiency water, rivers and lakes rotation

W HY DO WE NEED INCENTIVES ? • Yield penalty in early years of adoption • Hardpans take time to break up • Soil fertility takes long time to restore • T echnology change is always associated with some risk of failure • Increased costs for inputs such as herbicides and even mulch material • Benefits are shared, but many costs are private

T HE AGGLOMERATION PAYMENT (AP) A two-part encouragement • • A conventional voucher (subsidy) for adoption • A separate voucher (bonus) if neighboring farms adopt Creates a network externality that can improve adoption • • Enhanced diffusion and contiguity of adoption • More cost-effective provision of ecosystem services through side payments, and self-policing

O UR P ROJECT Pilot study of an agglomeration payments program to promote CA, • within Malawi’s Agriculture Sector-Wide Approach (ASWAp) A pilot study with 3 treatments: • Control (C) • Standard Voucher (SV) • Voucher + Agglomeration Bonus (AB) • A coupled modeling framework to examine what pilot study results • might imply for the landscape Agent-based model of farm household decisionmaking • Crop growth and runoff generation model in SWAT • Statistical models of ecosystem service provision •

K EY H YPOTHESES 1. AP lead to higher levels of spatial contiguity among adopters than SV 2. AP lead to higher levels of diffusion and overall adoption rates than SV 3. AP increase contacts and interactions among neighbors, relative to SV, (potentially allowing additional benefits to accrue to the community) 4. AP lead to higher compliance (and lower cheating rates) than SV 5. Land-use patterns encouraged by AP lead to reduced sediment loading and improved runoff regulation when adopted at the landscape scale 6. Land-use patterns encouraged by AP lead to enhanced provision of natural predator and pollination services when adopted at the landscape scale 7. AP lead to more cost-effective sustainable land management improvements than SV

A GENT -B ASED M ODELS ? Model individual decision-makers (like farmers, or drivers, or voters) • Landscape properties emerge from individual interactions and decisions • Decision Outcome Women make decisions about attending Population growth rate emerges from school, working, or having children their decisions to bear children Farmers make decisions about maintaining Runoff rate and water quality emerge riparian cover along watercourse from their land-use decisions Voters discuss their preferences in Political leaders and policy direction government emerge from their voting decisions

A SIMPLE EXAMPLE Energy from Energy from Grass Grass 51 51 Cooperating Cows Model Cow Cow metabolism metabolism 6 9

S TRUCTURING ABM RESEARCH We don’t know very well HOW decisions get made • Iterative modeling approach particularly important: • Desk Field Stakeholders

A FIRST ITERATION FOR THIS PROJECT Agents in our model are provided different levels of conventional base payments (BP) and agglomeration payments (AP) to participate in the CA program. All agents make a decision on how to use their land: (Y) Participate in the CA program (N) Continue as normal, and not participate (C) Cheat – accept the incentive, but don’t participate in CA program Agents that choose (Y) or (C) then ‘encourage’ neighbors to participate.

A FIRST ITERATION FOR THIS PROJECT Agents are described in a very simple way: A farm location, size, and relative yield from the land An accumulated ‘personal wealth’ or ‘capital’ A set of neighbors with whom they may interact * Agents are boundedly-rational, risk-averse, future-discounting profit maximizers ** When agents ‘encourage’ other neighbors to participate, they are offering a bit of their ‘capital’ – as if offering favors, time, or some other relationship-relevant transaction

S OME ILLUSTRATIVE EARLY RESULTS Base Payment of 10, Agglomeration Payment of 20 Base Payment of 40 • Similar net levels of adoption, at just over ½ the cost making use of agglomeration payments • We know what assumptions are necessary to model decision, now must validate in field, and expand model coupling

C OUPLING MODELS TOGETHER S cenarios for incentives, markets, Agent- S WAT model and climate based of crop Literature models of model of growth, runoff, land-use and water E S provision decisions quality Behavioral Natural data from systems pilot study data inputs and social from research literature • Plans to streamline with, and leverage, efforts to build a DSS for the same region by WorldFish • Particular interest to not create ‘just another modeling tool’

I NSIGHTS FROM THE S COPING V ISIT Farmer visits in Mpata Village, Ulongwe EPA, and • Kuthambo Village, Phalula EPA Stakeholder inception workshops in Liwonde and • Lilongwe

F ROM OUR F ARMER V ISITS • CA is based on three principles – Crop rotation – Mulching – Minimum soil disturbance • But most farmers practicing leave out one or two principles • Most decisions on land use made individually – Except when it comes selling parcels (community input)

F ROM OUR S TAKEHOLDER W ORKSHOPS • A number of different NGOs and agencies promoting CA through vouchers and other incentives • World Bank beginning a massive project in basin aimed at conservation • Stakeholders noted potential to link with Hydropower in a PES scheme • Land-use decisions made in late summer, making July-August the best time to begin program

O UR CALENDAR MOVING FORWARD Jan-Mar 2014: Final sample design and planning with in-country partners • May 2014: Enumerator training • June-July 2014: Baseline Survey Data Collection from sampled farmers • August 2014: Initial Program promotion via lead farmers • June-July 2015: Midline follow-up and first payments to adopters • June-July 2016: Endline follow-up and second payments to adopters • June-July 2016: Endline Survey Data Collection from sampled farmers •

Thank you for your attention