Harvesting the Research: Valuing Ecosystem Services to Offset Global Costs of Agriculture

From foodtank.com, by Emily Nink
Harvesting the Research: Valuing Ecosystem Services to Offset Global Costs of Agriculture

Food Tank spoke with Dr. Harpinder Sandhu, lead author of a paper on the value of ecosystem services published in PeerJ, an online scientific and medical journal.

The overall message: The study found that the economic value of ecosystem services—specifically nitrogen mineralization and biological control of pests—could exceed the input costs of pesticides and fertilizers on the global scale, even if adopted on only 10 percent of globally utilized arable land.

The research: The authors used experimentally derived economic estimates of ecosystem services to extrapolate the potential economic benefit to the global area of temperate cropland. Ten organic and 10 conventional fields in New Zealand were the source of the estimates; the combined economic value of both ecosystem services was found to be higher for organic systems than for conventional systems.

Food Tank (FT): How would you describe the results of your paper to a layman?

Dr. Harpinder Sandhu (HS): Nature provides many benefits to people, which we call ecosystem services. Current modern agricultural systems ignore these contributions of nature and are reliant on agrochemical inputs. These inputs, based on fossil fuels, are damaging to human health and to the environment. Therefore, to develop sustainable agricultural systems, there is a need to understand the economic contributions of ecosystem services. Our research conveys a message to the farming community that simple, cost-effective techniques can help reduce costly farming inputs by enhancing the contribution of ecosystem services, such as natural control of insect pests and maintenance of soil health.

FT: Why is your research relevant for the transition to sustainable agriculture? What are two key points of your paper?

HS: First, the non-traded ecosystem services of biological pest control and nitrogen mineralization in agriculture have high economic value. We found they offer more economic value on the global scale than the combined current costs of pesticide and fertilizer inputs. Second, by enhancing the contribution of those ecosystem services, farmers can feasibly improve the sustainability of agriculture at the global scale.

This is highly important because global agriculture is looking for techniques to increase productivity per unit area, utilize inputs more efficiently, develop resilience against climatic variability, and minimize impacts on environment. At the same time, its greatest challenge is to feed an additional 2 billion people by 2050. Our research contributes to the development of ecological intensification practices by utilizing and enhancing the contribution of ecosystem services on farmland. We aim to develop cost-effective and easily adopted ecosystem services. This will ensure food security and long-term sustainability of agriculture.

FT: We found your paper very exciting, because it seems to be one of the few that works to value the ecosystem services that sustain agricultural productivity.  However, some researchers say there is no need to assign a value to these processes, as they are already valued in the “benefit,” or total value of the crop—that this is essentially “double counting.”  How do you view this claim? 

HS: Our research avoids double counting of the benefits and clearly demonstrates that ecosystem services are valuable contributors toward the final products of agriculture; however, we find that the market value of food does not include the value of ecosystem services.

The concept of ecosystem services includes all benefits derived by human beings from ecosystems as defined and elaborated in the United Nations’ Millennium Ecosystem Assessment, completed in 2005. Some argue that in agriculture, ecosystem services, such as nitrogen mineralization, are “means towards ends,” with the ends being agricultural food products. This is true in the market economy for manufactured industrial goods, such as making steel from iron ore. However, there are no clear distinctions between means or ends in natural or managed landscapes. We argue that there are intermediate and final services in agriculture. Intermediate services are supporting services such as the biological control of pests, nutrient cycling, and nitrogen fixation, whereas final services are agricultural products like grains, meat, and milk. We argue that the market value of food generally reflects the cost of factors of production (land, labor, fuel, cost of fertilizers or seed) but fails to capture the total value of intermediate ecosystem services. Moreover, these ecosystem services are not traded in markets; they therefore have a value but no price.

The notion of ecosystem services and their valuation is to highlight that these intermediate services are vital for the production of food, and that research should aim to capture these values in designing future models for sustainable agriculture.

FT: Do the results of your paper have implications for Payments for Ecosystem Services (PES) schemes?

HS: Our research provides a standardized methodology to assess, monitor, and quantify the economic value of ecosystem services in agriculture. It provides confidence in comparing sustainability of different farming systems.

It also shows that some regions may observe a short-term loss of production. Therefore, market rewards or PES schemes will be required to compensate farmers for any short-term or medium-term loss of income that occurs from adoption of practices that utilize ecosystem services. These financial schemes are not new to the public sector; the Green Revolution was made possible by offering minimum support to the market prices of crops that were promoted at that time, along with highly subsidized inputs. In the long term, practices that enhance ecosystem services will help to optimize both production and sustainability of farms. We believe current financial resources available for agricultural development can be partially diverted for the further development and extension of sustainable intensification of agricultural practices by enhancing ecosystem services to protect the livelihoods of millions of farmers.

FT: Your study focuses on particular climatic and regional conditions. Do you see any particular issue arising when applying the same concept across different environments and modes of production?

HS: Our study was located in one region of the world and we did not account for regional climatic effects, land use, and crop management changes while extrapolating the results to global temperate agricultural area. Nonetheless, we demonstrated the value of ecosystem services at the global scale as an example to explore a “what if” scenario. The methods we developed to assess and measure ecosystem services are applicable in other regions and for different types of farming systems. Further studies can use these protocols in other parts of the world to further examine local factors and differing regional values of ecosystem services.

Furthermore, our research is part of a global initiative called The Economics of Ecosystems and Biodiversity (TEEB) in Agriculture and Food, which is bringing the value of ecosystem services and biodiversity to the attention of decisionmakers. Our study identifies the benefits of ecosystem services to global agriculture by quantifying their economic value. This research contributes to improve current methodologies and also provides information on economic contribution of non-traded biodiversity in agriculture, which will be useful for the TEEB project. It also informs the scientific community and policymakers about the need to internalize the value of ecosystem services in current agricultural systems in order to ensure long-term food and ecological security and sustainable rural development.