Transaction costs are likely to amount to about US$1 million per year, or US$5.6 per hectare (for a total of 535,206 hectares), considering the accumulated budget allocated to the PES programmes (PSAH and CABSA) since 2003 (about US$88 million) and the set allowance of four per cent for administration expenses.
For PSAH participants, in 2003, transaction costs amounted to 237 pesos (approximately US$20) for ejidos and communities and 304 pesos for private owners (COLPOS, 2004, cited in Alix-Garcia et al., 2005).
Opportunity costs: given appropriate soil and water conditions, alternative land uses could generate higher average returns per hectare than the payments received: corn - US$37 per hectare per year and livestock production - US$66 (Jaramillo, 2002 cited in Muñoz-Piña et al., 2005). However, in many places, conditions for farming or ranching are not promising and so the compensation offered might have been higher than the opportunity cost. This might explain the high number of applications.
"The land in many parts of the reserve [Sierra Gorda Biosphere Reserve] is not suitable for most forms of agriculture or ranching. It just isn't productive enough." So when Pedraza and his colleagues told some of the local farmers that the Mexican government might be willing to pay them as much as 400 pesos (US$40) per hectare per year to leave their forests alone, most jumped at the opportunity. "It took some education," explains Pedraza, "but not much convincing." (...) farming and ranching in these parts is difficult business. They'd be lucky to maintain one head of cattle on 10 hectares, so the 300 or 400 pesos per hectare per year more than makes up for the loss of their grazing opportunities" (Roberto Pedraza, Director of the Sierra Gorda Ecological Group, cited in Bayon, 2004).
ADDITIONALITY: In the first two years of the PSAH programme there seems to have been little effect on reducing the risk of deforestation since 64 per cent of enrolled land is under low or very low deforestation risk. Much of PSAH’s 2005 budget was invested in natural protected areas or priority mountains, which were not necessarily areas that had water-related crises- 90 per cent of the land under PSAH in 2004 corresponded to not-yet-overexploited aquifers (Muñoz-Piña et al., 2005, Alix-Garcia et al, 2005).
Programme has had a small impact in reducing deforestation (reduced rate 2000-2007, using control groups to measure, from 1.6 per cent to 0.6 per cent). Hydrologic importance and risk of deforestation represents only 20 per cent of total priority criteria (out of 26 criteria). Secondary criteria (administrative, social, etc.) diverts funds from where they can be more effective, but slippage effects can only be accounted for at the national level so it is difficult to establish net effect.
POVERTY IMPACTS: The largest share of the PSAH payments has been assigned to areas of high or very high marginality (72 per cent of enrolled hectares in 2003 and 83 per cent in 2004). However, Alix-Garcia et al. (2005) highlights that this has not been an intentional poverty alleviation strategy, but a consequence of the fact that 80 per cent of the forest in Mexico is held by ejidos and indigenous communities, and that 86 per cent of the forest is located in communities with high or very high marginality. According to CONAFOR (2006a) the national PSAH scheme is reaching rural areas that other government programmes have not been able to.
According to CONAFOR (2006a) a very important step to implement the PSAH was to create clear enabling legislation for investment in environmental services. This was one of the recommendations from the Costa Rican advisors right in the beginning of the process. CONAFOR began by incorporating provisions for the PSAH in the federal l forestry law, and then proceeded to do the same at the state level.
Higher payments for cloud forests and forest with high deforestation risk. CONAFOR has established an excellent monitoring system based on changes in forest cover, controlled by GIS and satellite images, although issues like seasonality and topography can affect results.
PSAH monitoring is done once a year, through the comparison of satellite images of the original forest cover and of the present condition; this can also be complemented by random visits to the plots. Compliance levels are very high and loss in forest cover is often unintentional and due to forest fires or timber theft (Muñoz-Piña et al., 2005).
However, the fact that the programme monitors only the maintenance of forest cover, allows other threats to prevail. This is the case of livestock being allowed to remain in the forest damaging the undergrowth and creating other negative impacts for water resources related to soil compaction and organic matter deposition (Bayon, 2004).
Barriers to participation remain, especially for the most marginal groups who have less access to information and capacity to formalize applications (often related to lack of complete documentation in relation to land register) and less lobbying power with the local CONAFOR office (Muñoz-Piña et al, 2005).
ABSENCE OF LOCAL INTERMEDIARIES AND FACILITATORS: The PSAH operates without local intermediaries and it is only where NGOs are already active that the local farmers have real support in learning about the programme and applying for it. The case of Sierra Gorda Biosphere Reserve, mentioned by Bayon (2004) illustrates this situation.
POLITICAL INFLUENCES: Due to a combination of political negotiations, legal impediments and lack of technical information and capacity, the final version adopted of the PSAH was considerably less targeted with respect to environmental and social goals than in the initial design of the programme which had contemplated starting with a pilot phase (Alix-Garcia et al., 2005).
CHOICE OF INTERMEDIARY: Since the real mandate of CONAFOR is commercial forestry projects, some authors (Alix-Garcia et al., 2005) have argued that this influenced the way the PSAH programme was implemented, particularly in terms of the distribution of contracts to forest-holders with commercially viable forest operations and to those with land in target areas of other CONAFOR programmes. This might help to explain the lack of environmental additionality of the programme (see Environmental impacts above). However, the same authors consider that CONAFOR’s experience and lobbying power was key in securing funding for the programme. Muñoz-Piña et al. (2005) highlights the importance of the political support provided by CONAFOR's General Director “first giving his agency’s full support to the development of the idea, and later providing the political backing it needed to pass through the Congress and the agricultural lobbying groups.”
ACCOUNTABILITY OF THE NATIONAL SCHEME AND POTENTIAL FOR LOCAL TAKE-OVER: Since users are not paying an extra fee to cover the PSAH investment, pressure for the programme to comply with its goals and be accountable for the investment might be too weak to justify the current budget allocation.
Carlos Muñoz-Piña, Instituto Nacional de Ecología (INE): firstname.lastname@example.org
Carlos E. Gonzáles Vicente, CONAFOR: email@example.com
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