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Exploring Environmental Services Incentive Policies for the Philippine Rice Sector: The Case of Intra-Species Agro Biodiversity Conservation

Fuwa, Nobuhiko and Sajise, Asa (2008): Exploring Environmental Services Incentive Policies for the Philippine Rice Sector: The Case of Intra-Species Agro Biodiversity Conservation.

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Abstract

This paper considers a hypothetical scheme of green payments to induce inter-specific agrobiodiversity in the context of Philippine rice farming. We empirically estimate a model of farmer behavior and then simulate the consequences of alternative (hypothetical) PES schemes under a fixed budget constraint. We find that, under this particular application, there is a clear trade-off between the two policy goals of enhancing biodiversity and poverty reduction. Even the totally untargeted lump-sum subsidy would have a larger poverty reduction impact than would the first-best conservation subsidy payment scheme. Therefore, policymakers would be required to strike a delicate balance between the two competing policy objectives. In addition, there is also a clear trade-off between the efficiency of targeted conservation payment and the information requirement for implementing subsidy schemes.

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