than the benefits of improving less degraded soil. The implication for policy
is a familiar but often neglected one: the temptation is to invest in areas where
soil is most seriously degraded, but it is often better first to protect soil that is
marginally degraded.
No follow-up assessment to Anderson’s cost-benefit appraisal is yet avail-
able, so it is uncertain whether such projects have succeeded. Anderson is clear
that success is contingent on high participation rates among farmers, raising
another important issue. Unless farmers cooperate in agroforestry schemes,
they are likely to fail. In turn this means that such schemes have a game the-
ory context: each farmer must be assured that the other farmers will cooper-
ate. For any one farmer there is an incentive not to participate, thus avoiding
the costs of tree planting while securing the benefit of tree planting if all oth-
ers undertake the project. This produces a classic free-riding potential to such
schemes and underlines the importance of community agreement and partic-
ipation in such schemes, with well-designed incentives to stay in such schemes
and punishments for defecting from them.
It is also worth noting that Anderson’s study excludes credit for biodiver-
sity and carbon storage. As noted earlier, economic studies involving the esti-
mation of biodiversity benefits are not available. Zelek and Shively (2002)
secured estimates of the price of carbon for agroforestry systems in Bukidnon,
Northern Mindanao, Philippines. The carbon price is the price that would
have to be paid to farmers to compensate them for switching out of traditional
crops (maize and vegetables) to agroforestry schemes. If the land would other-
wise be fallow, an agroforestry scheme takes $6–$10 per hectare compensation
for the carbon stored in the agroforestry system. However, if the alternative is
maize growing, then the necessary compensation is $58–$61 per hectare, and
for forgoing vegetables it is $211–$283 per hectare. Although the compensa-
tion for sacrificing vegetable growing appears high, the estimates are in pres-
ent value terms, that is, discounted annual returns that are then summed. The
equivalent annual payments would be modest, suggesting that paying farmers
for carbon sequestration would be inexpensive and sufficient to switch them
into agroforestry.
Estimating the Benefits to a Hypothetical Land
Use Change to Agroforestry in Peru
Slash-and-burn agriculture by small-scale farmers is estimated to account for
about one-third of the deforestation in tropical America (Houghton et al.
1991; see also Chapter 8, this volume). In a slash-and-burn system, farmers
typically clear the land for agriculture and plant crops during 1 or 2 years, after
which the land is left fallow for varying periods while another part of the farm
is cleared for agriculture. As a result, within a few decades after slash-and-burn
colonists move into an area, often only small areas of primary forest are left.
80 II. The Ecological Economics of Agroforestry