A presentation by Dr. B V Chinnappa Reddy

1. 5/27/2010
Approaches to Economic
Valuation of Ecosystem Services
Case Study 1
Economic Impact of Legume Nodulating Bacteria on
B V Chinnappa Reddy Groundnut production
University of Agricultural Sciences,
Bangalore, India
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The case study was undertaken in Karnataka
state in a region where groundnut crop is the
Availability of Rhizobia
major dryland crop.
State Agriculture Department, Karnataka (Rs
75/kg)
State Agricultural Universities, Karnataka (Rs
75/kg)
Hypothesis:
Open market (??)
Soyabean specific packets
General pulses/miscellaneous packets
Powder/liquid (liquid form only in open markets)
Cost differential
Rhizobium user farmers realise higher
yield and net income from groundnut crop
than non-users. 3
Economics of LNB use in groundnut crop (Rs./ha) Total Factor Productivity (TFP) analysis of LNB
(Rs.47= 1$US) TFP reveals returns from non-material inputs like technology,
Inputs User Non-user Qty change % Change infrastructure and others in agriculture productivity.
Yield (q/ha) 9.90 8.67 1.23 14.18
Gross returns 16291.63 13108.65 3182.98 24.28 Using Frontier production analysis and fitting a Cobb-
(Rs/ha) Douglas type of production function, TFP of LNB technology
Total costs in groundnut was estimated.
Net returns 6912.59 4436.42 2476.16 55.81
Net Return/qtl 698.24 511.70 186.54 36.46
TFP comprises of two components namely,
Benefit-cost 1.74 1.51 0.23 15.23
ratio
Technical change and
Technical efficiency
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2. 5/27/2010
Opinion Survey of Farmers about Rhizobium
General opinion of rhizobium users Per cent
% Contribution
Technical -0.02965 -0.88 Sources of Rhizobium: Agril. Dept. 80
Efficiency Timely availability of Rhizobium 85
Cost of Rhizobium is low 65
Technical 2.626847 77.66
Application of Rhizobium is easy 44
Change
Use of chemical f ili
f h i l fertilizer reduced
d d 0
TFP 76.78 Rhizobium is worthwhile 62
Increases soil fertility 96
Input use 0.785503 23.22
Increases yield 75
Total Output 3.382705 100.00
Increases pod size 62
Change
7 Resistance to drought 8 78
Conclusion
Productivity gain from Rhizobium is upto 14.00 %.
Case study 2
The cumulative impact is increase in net income by 55.81
per cent over non-user farmers.
The economic value of direct benefits from rhizobium in
groundnut was Rs. 1326.24 per ha (based on the
Rs 1326 24 ha.
residual value).
Economic Impact and Production
The incremental contribution of rhizobium to the Efficiency of Vermi-Compost Use in
increased output (TFP) of groundnut was more than
that of inputs Agriculture
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Economics of VC use in Ginger and Banana (Rs.47=1$US
Economics of VC use in Coconut
(Rupees 47=1$US)
Per Acre Change Per Acre Change
VC Cont Value Per VC Control Value Per
user rol Per Acre Change
cent user cent
Total cost (Rs) 62065 61445 620 0.18 27358 26611 747 2.81 VC user Control Value Percent
Yield (Qtls.) 68.65 66.48 2.17 3.26 24.85 21.43 3.42 15.96
Total cost (Rs) 8744.54 10194.46 -1449.92 -14.22
Avg. cost of prod/q 904.09 924 -20.18 -2.18 1000.85 1241.78
Gross income (Rs) 87100 81733 5367 6.57 111184 92353 18831 20.39 Yield (Qtls.) 5.47 6.02 -0.55 -9.14
Net income (Rs) 25034 20287 4747 23.40 83826 65741 18085 27.51 Avg. cost of prod/q 1593.54 1693.43
Rate of return 1.40 1.33 4.06 3.47
Gross income (Rs) 44238.12 43810.03 428.09 0.98
Net income (Rs) 36309.45 33615.57 2693.88 8.01
Rate of return 5.06 4.30
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3. 5/27/2010
Reduction in fertilizer use (Env benefit) Reduction in chemical sprays (Rs/ac) (Env benefit)
Ginger Banana Coconut Ginger Banana Coconut
Value % Value % Value %
Value % Value % Value %
Reduction in 108.33 24.03 351.22 43.41 16.72 14.55
fertilizer use
Kg/ac Reduction Cost 1956.52 24.86 372.27 34.94 126.19 36.46
of chemicals
Savings in costs 1069.55 22.69 3460.58 47.63 166.76 15.06
(Rupees per acre)
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Conclusion
Economic analysis of profitability and production
impact of VC technology is essential to demonstrate its
Case study 3
impact and utility.
Economic Valuation of Ecosystem Services of
BGBD:
Using appropriate techniques and approaches the
An Analysis of Selected Provisional Services of
economic impact of VC can be readily assessed.
Microorganisms In Rendering P Available to
Crop Plants
Illustrations of approaches and methods amply suggest
that VC use in agriculture is profitable and there is
positive production impact as revealed by TFP. 15
MANAGEMENT OF BGBD AS INFLUENCED BY ORGANIC MANURES AND INORGANIC
FERTILIZERS IN COFFEE ROOT ZONE SOILS UNDER FIELD CONDITIONS
Methodology
TREATMENTS
MIC- Microbial consortium
A. chroococcum - 5.8x106/ml
T1. Control PO4- solubilizer - 8.0x106/ml (Aspergillus awamori)
VAM fungi - 10,000 I.P/g inoculum
T2. FYM
Study
St d area:
MFC- Mesofauna consortium: 2 kg of forest soil+litter
g
T3. RDF RDF: Recommended dose of fertilizers (160 N:120
Koothy Village, Somvarpet taluk T4. RDF+ FYM
P:160K). 50% basal dose and remaining 50% after 3
months
Kodagu district, Western Ghats region, Replications: 3 Design: RCBD
T5. MIC+ MFC
Karnataka, India Plot size: 1080 sq. mts Spacing: 6x6 ft.
T6. MIC+ MFC+FYM
Observations recorded:
T7. RDF+MIC+MFC Available-P, Microbial biomass-P, alkaline phosphatase
activity
T8. RDF+FYM+MIC+MFC
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SOIL SAMPLING:
Collected at 15 cm depth at 60 days intervals for Effect of PSM on the availability P to plants over control
microbial and chemical analysis.
Days after inoculation 60 120 180 240 300
ECONOMIC VALUATION:
Minimum availability of
4 20 6 4 14
replacement cost P (Kg/ ha)
approach for valuing ecosystem attributes
Maximum availability
and also provide monetary measure of 129 280 142 102 96
of P (Kg/ha)
ecosystem values.
Marginal analysis by taking in to account Value (Rs./ ha) 52-1683 261- 3654 78- 1853 52-1331 182-1252
market price of fertilizers.
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Effect of incremental microbial biomass P over control at Economic value of Available N Under
different intervals (Rupees 47=1$US)
various treatments
Days after inoculation 60 120 180 240 300 Treatments Kg/ha Incremental N Incremental
over control Economic value
Minimum availability of Kg/ha of N over control (Rs/ha)
microbial biomass P (Kg/ 24.84 3.60 22.56 18.16 1.72 Control 389.49 0.00 0.00
ha)
FYM 422.77 33.28 299.52
Maximum availability of RDF 454.13 64.64 581.76
microbial biomass-P (Kg/ha) 83.60 93.16 75.04 89.40 70.74
RDF + FYM 546.12 156.63 1409.66
324-
Value of microbial biomass 47-1216 294-979 237-1167 22-923 MIC+MFC 386.18 -3.31 -29.76
1091
P (Rs./ha) MIC+MFC + 437.41 47.91 431.23
FYM
RDF+MIC+MFC 458.31 68.82 619.39
RDF+FYM+MIC 559.71 170.22 1531.97
21 +MFC
Direct economic benefit/impact of VA
Mycorrhiza in crop production
CONCLUSION
Mycorrhizal fungi are known to enhance the uptake of
The ESS rendered by P-solubilizing microorganisms in particular
and microorganisms in general is the product of P solubilization, diffusion-limited nutrients such as phosphorus and thus
P-mineralization and P-immobilization.
improve plant growth.
It is difficult to separate them under field conditions as they
operated simultaneously in soil.
Economic value of PSM ranges between 261 and 3564 per ha (at a Such fungi have a great economic potential (direct economic benefits
price of Rs.13/kg of P)
to farmers) in terms of supply of natural source of nutrients to crops
and soil thereby reduction in cost of cultivation and increased
incomes to the farming community besides providing ecological
services and functions.
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5. 5/27/2010
Table :Economics of use of mycorrizal fungi in tomato crop
(Projected per acre basis at 90% projected yields from the
Contd from previous table
experimental data): (Rs. 47=1$US)
1 Additional yield at 50% P 766.00 1 Yield increase at 50% P 1855.00
+G. leptotichum (kg/ac): +G. intaradices (kg/ac):
2 Additional income @ Rs 3/kg (3*766) Rs.2298.00
2 Additional income @ Rs 3/kg (3*1855): Rs 5565.00
3 Savings in P fertilisers @ Rs 20/kg Rs440.00
Rs440 00
3 Savings in P fertilisers @ Rs 20/kg Rs 440.00
4 Total incremental income Rs 2738.00
4 Total incremental income Rs 6005.00
5 Yield at control+100 % P, kg/ac 5861.00
5 Yield at control+100 % P, kg/ac 5861.00
Table contd…….
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Conclusion
Trade-off
Unlopped O.beatrix lopped O.beatrix
The data furnished in the table shows that application of mycorrhizal Lennogastep
M.birmanica
Lennogastep
120 120 M.birmanica
fungi in field crops especially high value and commercial crops could 100
M.anamola
100
M.anamola
D.nepalensis
be a viable proposition. D.nepalensis
Abundanc e/m 2
Abundanc e/m 2
80 A.alaxandrii 80
A.alaxandrii
60 60
40 40
20 20
0 0
However, a word of caution that these figures are estimated from Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May
small experimental plots which may have linear bias in either way
Orthoptera
when projected for a larger scale. Unlopped
Isoptera
Lopped
350 Hymenop 350
Coleoptera
300 300
Arachnida
250 250 Orthoptera
Abundanc e/m 2
Abundanc e/m 2
Isoptera
200 200
Hymenop
150 150
Nevertheless, results are pointers towards economic feasibility of use 100 100
Coleoptera
Arachnida
of mycorrhizal fungi in crop production. 50 50
0 0
Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May
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Trees and soil organic carbon The three steps in PES
Organic carbon(%) 0-10 First, an assessment of the range of ecosystem
10_20 services that flow from a particular area, and
2 Cast
who they benefit.
Organic Carbon (%)
1.5 Second, an estimate of the economic value of
1 these benefits to the different groups of people
people.
0.5 And third, a policy, subsidy, or market to capture
this value and reward landowners for conserving
0
RF-BTC RA-OTC IA
the source of the ecosystem services.
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