IDEAS home Printed from https://ideas.repec.org/a/cup/endeec/v22y2017i02p133-155_00.html
   My bibliography  Save this article

Market-based instruments for risk-averse farmers: rubber agroforest conservation in Jambi Province, Indonesia

Author

Listed:
  • Djanibekov, Utkur
  • Villamor, Grace B.

Abstract

This paper investigates the effectiveness of different market-based instruments (MBIs), such as eco-certification premiums, carbon payments, Pigovian taxes and their combination, to address the conversion of agroforests to monoculture systems and subsequent effects on incomes of risk-averse farmers under income uncertainty in Indonesia. For these, the authors develop a farm-level dynamic mean-variance model combined with a real options approach. Findings show that the conservation of agroforest is responsive to the risk-aversion level of farmers: the greater the level of risk aversion, the greater is the conserved area of agroforest. However, for all risk-averse farmers, additional incentives in the form of MBIs are still needed to prevent conversion of agroforest over the years, and only the combination of MBIs can achieve this target. Implementing fixed MBIs also contributes to stabilizing farmers’ incomes and reducing income risks. Consequently, the combined MBIs increase incomes and reduce income inequality between hardly and extremely risk-averse farmers.

Suggested Citation

  • Djanibekov, Utkur & Villamor, Grace B., 2017. "Market-based instruments for risk-averse farmers: rubber agroforest conservation in Jambi Province, Indonesia," Environment and Development Economics, Cambridge University Press, vol. 22(2), pages 133-155, April.
    • Handle: RePEc:cup:endeec:v:22:y:2017:i:02:p:133-155_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1355770X16000310/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xueting Zeng & Liang Cui & Qian Tan & Zhong Li & Guohe Huang, 2018. "A Sustainable Land Utilization Pattern for Confirming Integrity of Economic and Ecological Objectives under Uncertainties," Sustainability, MDPI, vol. 10(5), pages 1-18, April.
    2. Fonseca Morello, Thiago, 2022. "Subsidization of mechanized tillage as an alternative to fire-based land preparation by smallholders: An economic appraisal of the case of southwestern Brazilian Amazon," Land Use Policy, Elsevier, vol. 123(C).
    3. Wollni, M. & Lanza, G. & Ibanez, M., 2018. "Social capital and conservation under collective and individual incentive schemes: a framed field experiment in Indonesia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275968, International Association of Agricultural Economists.
    4. Djanibekov, Utkur & Gaur, Varun, 2018. "Nexus of energy use, agricultural production, employment and incomes among rural households in Uttar Pradesh, India," Energy Policy, Elsevier, vol. 113(C), pages 439-453.
    5. Hermann, Daniel & Sauthoff, Saramena & Mußhoff, Oliver, 2017. "Ex-ante evaluation of policy measures to enhance carbon sequestration in agricultural soils," Ecological Economics, Elsevier, vol. 140(C), pages 241-250.
    6. Wening Sarwosri, Arieska & Wegmann, Johannes & Mußhoff, Oliver, 2018. "Encouraging rainforest preservation by smallholders: An ex-ante policy evaluation," EFForTS Discussion Paper Series 23, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:endeec:v:22:y:2017:i:02:p:133-155_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/ede .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.