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Stochastic Economic Assessment of Afforestation on Marginal Land in Irrigated Farming System

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Abstract

We analysed the economic viability of afforestation on marginal irrigated croplands in irrigated drylands of Uzbekistan. The revenues derived from a combination of diversified agricultural production, carbon sequestration, nitrogen fixation, and avoided irrigation water use were analysed considering uncertainty associated with on-farm activities such as crop production and short-rotation forestry. At the per hectare scale variability in land-use revenues would necessitate substantial increases in carbon prices for afforestation to be as profitable as crop cultivation on marginal lands, assuming an abundant irrigation water supply. In contrast, at the farm scale the analysis results revealed that afforestation can be attractive financially even without carbon payments due to farm production constraints, variable land-use returns, and the benefits of land-use diversification. Increased carbon prices would promote carbon sequestration by motivating farmers to plant high biomass producing tree species, but would have an ecosystem service trade-off by reducing the appeal of nitrogen-fixing species that are essential for nitrogen self-sufficiency of afforestation efforts. Given the modest irrigation needs of afforestation efforts compared to the cultivation of annual crops, tree plantations could become a primary income source for farms during periods of drought. Irrigation water saved from replacing crops with trees on marginal farmland would enhance the cultivation of commercial crops on productive lands, thus increasing farm income.

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Acknowledgments

We appreciate the support of the Robert Bosch Foundation for enabling this study within the framework of the German-Uzbek Agroforestry project. The support of the ZEF/UNESCO program in the Khorezm Region of Uzbekistan is gratefully acknowledged. We also thank the International Postgraduate Studies in Water Technologies (IPSWaT), and the Dr. Herman Eiselen Doctoral Program of the Foundation fiat panis for the financial support during the doctoral studies of the first author.

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Authors and Affiliations

  1. Institute for Food and Resource Economics, University of Bonn, Meckenheimer Allee 174, 53115, Bonn, Germany

    Utkur Djanibekov

  2. Center for Development Research (ZEF), University of Bonn, Walter-Flex-Str. 3, 53113, Bonn, Germany

    Asia Khamzina

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  1. Utkur Djanibekov
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Correspondence to Utkur Djanibekov.

Appendices

Appendix 1

See Table 1.

Table 1 Coefficients of variation of crop yields and prices, irrigation water availability, and tree product prices
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Appendix 2

See Tables 2 and 3.

Table 2 Correlation matrix of crop yields and prices, and irrigation water availability between year 2001 and 2009
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Table 3 Correlation matrix of tree product yields and services over 7 years since afforestation
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Djanibekov, U., Khamzina, A. Stochastic Economic Assessment of Afforestation on Marginal Land in Irrigated Farming System. Environ Resource Econ 63, 95–117 (2016). https://doi.org/10.1007/s10640-014-9843-3

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