Cooperative institutions for increasing rural livelihood under CDM forestation on marginal croplands. The study examines afforesting marginal croplands in Uzbekistan through cooperative institutions between farmers and a clean development mechanism (CDM) project. Three scenarios are modeled: business as usual, individual farmer afforestation, and a CDM cooperative. The cooperative scenario produces the highest total outputs of food, fuelwood, and tree products by efficiently allocating water across farms. However, some individual farms may lose profits in a cooperative. Compensating disadvantaged farms from gains by others ensures all farms benefit. Cooperation allows complementarity across heterogeneous farm types to maximize livelihoods and carbon sequestration.

1. Cooperative institutions for increasing rural livelihood
under CDM forestation on marginal croplands
Utkur Djanibekov, Nodir Djanibekov, Asia Khamzina, John Lamers
email: utkur@uni-bonn.de
UNCCD 2nd Scientific Conference
Bonn, Germany, April 9-12, 2013

2. Irrigated agriculture in Uzbekistan
• Central Asia: Irrigated agriculture contributes 15-20% GDP
• Dependency of agricultural production on Amu Darya and Syr Darya rivers
• Khorezm and Southern Karakalpakstan: 30% GRP from agriculture
• 20-35% croplands are marginal; Croplands are affected by salinity
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Source: El Beltagy (2002); Suzuki (2003); Lerman and Stanchin (2006); Dukhovny and Sorokin (2007); Perelet (2007), Dubovyk et al. (2012)

3. Afforestation of marginal croplands
March 2004
• Alternative land use for livelihood
• Provides: fuelwood, fruits, leaves as fodder,
carbon payments
• Environmental services: climate change
mitigation, biodiversity increase, land
rehabilitation
• Less irrigation demand than crops
May 2006
Yet…
• Conversion of croplands into trees is prohibited
• State cotton procurement policy low
flexibility in land use
Photos: Khamzina
Source: Olschewski and Benitez (2005); Zhang et al. (2006); Marechal and Hecq (2006); Pearson et al. (2007); Khamzina et al. (2008); Lamers et al. 3
(2008); Alkemade et al. (2009); Thomas et al. (2010); Dargusch et al. (2010); Djanibekov et al. (2012)

4. Clean Development Mechanism (CDM) afforestation
Afforestation through an international agreement in the framework of CDM
can be an option
Still CDM constraints…
• High initial investments and transaction costs, e.g., 100,000-600,000 USD
• Certain amount of CO2 to comply with requirements
Option for afforestation: CDM-farm forestry cooperation
Objectives of the study
• To identify institutional settings under which farmers can cooperate and
afforest marginal croplands
• To assess the impact of introducing CDM-farm forestry cooperative on
rural community livelihood
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5. Data and methods
Data sources
• 160 farm and weekly market surveys
• Tree growth parameters over 7 years Farm
type 2
Model settings Farm CDM afforestation
type 1 farm cooperative
• Cooperative game model over 28 years
• 3 scenarios: Farm
type 3
1) Business-as-usual (BAU)
2) Afforestation, where farmers can plant trees
3) CDM cooperative (CDMC), farmers can cooperate in land use (tree planting)
and irrigation water use, and share benefits and costs
• Flexibility in cotton procurement policy
• Annual decrease in irrigation water availability
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6. Heterogeneous farms
• 3 heterogeneous farm groups based on land productivity attributes
Characteristics of farms Farm type 1 Farm type 2 Farm type 3
Total area, ha 100 60 130
Marginal cropland area, ha 23 5 43
• Heterogeneity of farms in coalitions
Heterogeneity of
Farm type 1 Farm type 2 Farm type 3 Coalition
coalition
Farm type 1 0.00 0.85 0.15 Farm type 1 and 2 0.43
Farm type 2 0.85 0.00 1.00 Farm type 1 and 3 0.07
Farm type 3 0.15 1.00 0.00 Farm type 2 and 3 0.50
Farm type 1, 2 and 3 0.67
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7. Results: Production of food and tree products
• As trees require less irrigation, water not used would be applied for more
productive lands and increase production of grains and vegetables
• Output would be largest when several farms cooperate (CDMC scenario)
Scenarios
Commodities BAU Afforestation CDMC
t year-1 t year-1 t year-1
Grains (wheat and rice) 500 600 639
Vegetables 76 213 240
Fuelwood n.a. 766 788
Tree leaves as fodder n.a. 35 36
Fruits n.a. 16 16
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8. Results: Farm benefits
• CDMC would have highest CO2 sequestration
• Community profits would be largest when farms cooperate
• Yet, profits of some farms would be lower in CDMC in contrast to afforestation
150
Farm profit, 1,000 USD
120
90
60
30
1 4 7 10 13 16 19 22 25 28
Years
Farm type 1 BAU Afforestation CDM cooperation
Farm type 2 BAU Afforestation CDM cooperation
Farm type 3 BAU Afforestation CDM cooperation
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9. Results: Fair division of cooperation benefits
• Compensation would be needed for losing farms to attract into cooperation
• Division of benefits depending on losses would increase farm profits
Farm type 1 Farm type 2 Farm type 3
Difference between individual increments in net benefits
in the Afforestation and CDMC, 1,000 USD -3 18 -4.4
Share in net gains from cooperation, % 0 40 0
Share in net losses from cooperation, % 3 0 5
Division of net benefits from favored farms, 1,000 USD 0 7.4 0
Compensation paid to disadvantaged farms, 1,000 USD 3 0 4.4
Profits after compensation, 1,000 USD 89 55 98
Increments in net benefits from cooperation, 1,000 USD 0 10 0
Relative gain from cooperation, % 0 22 0
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10. Conclusion
• Flexibility in cotton policy would lead to afforestation of marginal lands
• Total benefits of CDM cooperation is highest among the three scenarios
• Some farms may lose from cooperation
• Compensation has to be arranged from favored farms to disadvantaged ones
from participation in cooperation
• The more heterogeneous are farmers the more they complement each other
• The drivers that could initiate cooperative process and compensations may
be external, e.g., through support from the state or NGOs, or internal, such
as based on agreements among farmers
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11. Thank you for your attention