Economic Incentives to Strengthen Ecosystem Connectivity in a Central Sumatran Agricultural Landscape

Abstract

In Riau, Sumatra, Indonesia, a GEF project is considering a number of interventions to restore the Batabo Hill Protection Forest as a viable and sustainable wildlife corridor. The project site is an 11 km highway bisecting the Batabo Hill Protection Forest, which over the past two decades, has been largely converted to smallholder rubber production and scrub. One proposed intervention includes building eco-infrastructure - a series of bridges to allow tigers safer pathways across the 11 km road. Several hundred smallholders are farming rubber along the highway. Therefore, securing project buy-in and land access rights from key smallholders operating in Batabo Hill is central to any wildlife connectivity effort. For this reason, the overarching objective of this thesis is to explore the opportunity for a Payments for Ecosystem Services (PES) program to complement the proposed GEF eco-infrastructure option, as a way to improve wildlife connectivity, while not leaving smallholder households worse off. The PES program would ‘buy out’ the land from the smallholders for a period of five years, allowing time for the understory cover to regenerate, and for the wildlife to return. In order to achieve the study objective, four phases of analysis were conducted using data obtained through key informant interviews, focus group discussions and a household survey of 300 farm households across four villages in Kuantan Mudik Sub District in Riau. The first analytical chapter drew on the qualitative data and confirmed that households from villages in Kuantan Mudik Sub District are operating land in the Protection Forest and that these households view the Protection Forest as a resource available to support their livelihood needs. The reliance of these households on the Protection Forest for their livelihoods and the absence of alternative sources of income has prevented the effective management of the Protection Forest. However, the clearing of land in the forest for agriculture has had devastating effects on the community, particularly with respect to water quality and availability. The second analytical chapter examined the willingness of rubber producers operating within Batabo Hill to participate in a wildlife connectivity project by eliciting willingness to accept (WTA) compensation to forgo access to their land in Batabo Hill. Applying the novel inferred valuation technique to an open-ended WTA elicitation format, respondents were asked directly what they would be WTA as well as what their neighbour would be WTA a) when surveyed, and b) in real life. Initially, only male head of household survey data was examined. The regression results highlighted that on average, male heads of household were willing to accept compensation to forgo access to their land and found evidence of hypothetical bias in WTA. The third analytical chapter extended the analysis to include female heads of household and investigated gender differences in the head of household WTA. The regression results found that on average, female heads of household were willing to accept lower payments and highlighted that different factors influence male and female head of household WTA. The fourth analytical chapter took a new approach, pooling the male and female data to examine gender differences in WTA more explicitly, using gender interaction variables. While the results found that they gender dummy itself was not significant, gendered household labour effects were present in the WTA decision in addition to gendered enumerator bias, which was equal to approximately one third of the value of mean WTA.