provision of meat) and broader ecosystem benefits, such as the economic value
of genetic material for pharmaceuticals (Pearce and Moran 2002). These have
been studied in the context of tropical forests but not for agroforestry. Second,
it is useful to distinguish biological resources from biological diversity. The
ecological benefits of diversity should include the role it plays in ensuring the
resilience of an ecosystem against stress or shocks such as climate change (see
Chapter 20, this volume). Valuing biological resources in economic terms is
fairly well established in the literature, but valuing broader ecosystem func-
tions such as resilience has not been attempted. Third, until recently there has
been only a limited incentive to place economic values on biological diversity.
The ultimate purpose in finding economic values is to develop markets that
capture the economic values. An example would be payments for watershed
protection services provided by upstream forest owners or payments for car-
bon stored in the biomass. Such markets are rapidly emerging, but markets in
biodiversity have tended to lag behind. The earliest markets in biodiversity
conservation were debt-for-nature swaps. Such swaps involved the purchase by
conservationists of secondary debt owed by an indebted country. The conser-
vationist would then offer to retire the debt or, more usually, have it converted
from foreign exchange to domestic currency, in return for an agreement to
conserve a biodiverse area. Though popular in the 1980s, such swaps went out
of fashion in the 1990s but show some signs of returning again. More recent
examples of markets include conservation concessions or payments. These are
being championed by bodies such as Conservation International and simply
involve payments to landowners or land users to forgo environmentally
destructive land uses (Rice 2002; see Chapter 7, this volume).
Clearly, it will be important to improve this deficiency in economic
research into agroforestry. It may well be that many forms of agroforestry can
pay their way, relative to other land uses, with more readily identified values
such as carbon storage. But biodiversity benefits must be valued in economic
terms to ensure that agroforestry schemes showing economic returns below
those of some less diversified and potentially unsustainable land uses are not
sacrificed on the basis of incomplete economic analysis.
The Economics of Land Use Choice
Agroforestry is a managed use of land. If land is not used in this way, it will
be managed in other ways: for pasture, slash-and-burn (which can actually be
viewed as a form of agroforestry; see Chapter 8, this volume), logging under
various management regimes, or outright preservation in which no consump-
tive uses of the land are permitted. If the net economic returns to agroforestry
are less than the net economic returns from these alternative uses of the land,
then there will be little incentive to engage in agroforestry. In fact, agroforestry
will not be favored if any single alternative use of the land has a higher net eco-
68 II. The Ecological Economics of Agroforestry