Tuesday, October 30, 2012

Paying farmers for environmental services in Japan

An organic farm in the densly populated area close to the Narita airport
Japan is perhaps not a pioneer in paying farmers for environmental services, but it has some interesting schemes. The value of the eco system services of farming in Japan equals the value of production.

At the seminar linked to the launch of my book in Japan, Mashahito Enomoto,  Director of the Policy Division for the Ministry of Agriculture, Forestry and Fisheries held an interesting presentation about what the government is doing in support of more environmentally friendly farming in Japan. He stated that the estimated value of production from agriculture was 9.5 trillion Yen (some 120 billion dollars at today's rate) while the value of the ecosystem services were estimated to 8.2 trillion Yen, i.e. almost at par with the production value.

This shows clearly how important it is that we get in place mechanism that ensures that farmers take care of the management of the eco systems. (I have some very strong concerns about using market incentives for this. Read for example Ecosystems: Invaluable and worthless). 

Payment for ecosystem services has a long history in Japan. Already 1901, the Government of Tokyo implemented a scheme for forest management in the catchment area for its water supply (read more).For farms, Japan is partly using similar systems of support as in Europe. Organic farmers in Japan can get support in the same way, with a flat payment per area unit approximately of 64,000 Yen (800 dollar) per hectare (mind you, most Japanese farms are VERY small, outside of Hokkaido, average size is about 1 hectare). The uptake of organic farming in Japan is still rather slow (I will write more about this in a later post).

Some countries, such as the US pays farmers to take land out of production. The US Conservation Reserve Program has some 30 million acres that are taken out of production and the EU has during various periods have had set-aside programs. In Japan, an overarching concern is abandonment of land (see my previous post), and Japan has had a program for maintaining land under cultivation since 2000. Farmers could get anything between JPY3,000 up to JPY210,000 depending on site and kind of production.  By 2004, 660,000 farmers in 33,000 communities received in total JPY55 billion for active management of the farms.

Recipients of the support have to make an agreement with local communities that stipulates conservation activities to be conducted for the duration of no less than five years. This include management of fields and the maintenance of common resources such as irrigation canals, ponds and community roads. Local governments (both prefectural and municipal) play key roles in propagating, implementing and enforcing the program.

I find it very interesting that it is only through the local communities that farmers can get this kind of compensation. I believe this has a lot of additional values. First it means that the local communities, and the municipalities, get influence over how the systems develop, secondly, I believe the monitoring and control of the support must be quite easy, and to a large extent can be informal and finally it clearly must strengthen the local communities as such. This is very different from how the EU agri-environmental support works. I am quite convinced that this model in Japan is superior.You can read more about it in: Direct Payments for Environmental Services from Mountain Agriculture in Japan: Evaluating its Effectiveness and Drawing Lessons for Developing Countries, by Takumi Sakuyama. The evaluation points to some shortcomings of the program, which have a lot to do with the criteria for support, where to few indicators have been used to determine who should get support and at which level.

More about ecosystem services in my blogposts:
The Polluter Gets Paid Principle
Ecosystems: Invaluable and worthless
carbon projects drives land grabbing and GMOs?
Man: more dependent on nature than ever
The market is not a management system for the planet


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