Farmers' perspectives on payments for watershed services in Uganda.
Abstract
Payments for watershed services (PWS) is a market based policy tool that is increasingly being recommended for effective and sustainable management of watersheds, especially for Sub-Saharan Africa. The design of PWS projects is challenging and insights in the local context are indispensable. Using a choice experiment, we investigate the perspective of farmers on the design of a PWS program in the Mount Elgon region in Uganda. We use mixed logit and latent class models to explain preference heterogeneity for PWS attributes. We calculate willingness to accept values and perform a cost analysis to identify the most cost-efficient PWS programs. Our results point to a strong willingness of farmers to participate in a PWS contract. The majority of farmers are willing to adopt conservation measures, even in absence of a compensation; a minority is strongly averse to buffer strips along the river and does require a significant compensation. Farmers have strong preferences for individual over communal compensation, and additional in-kind rewards increase the willingness to accept a contract. The findings imply that PWS is a promising avenue for improved watershed conservation in the Mount Elgon region; and that individual compensation, differentiation and specific targeting of such programs may benefit their cost-effectiveness.