Potential and challenges in developing payment for ecosystem services scheme in Buol District, Indonesia

Developing a co-investment scheme to enhance the provision of ecosystem services (ES) and farmers’ livelihoods requires a comprehensive understanding on the condition of ES and how farmers interact with and use the natural resources in the landscape. This paper describes the result of the initial phase in developing a co-investment scheme in Buol district, Central Sulawesi, Indonesia. The coinvestment of ES schemes aims to support the local farmers and government in managing their landscape sustainably while also improving farmers’ livelihoods. Using the Capacity Strengthening for Vulnerability Assessment (CaSAVA) framework, we assess the environmental and socio-economic issues faced by both farmers and the local governments, which influence their vulnerability and provide challenges to the implementation of a co-investment for ES scheme. Buol landscapes represent a typical forest frontier area where forest is being converted into more intensive systems of oil palm plantation and massive smallholder maize systems. The geographic location of the district along the coastal line of the Sulawesi Sea offers diverse livelihood options for farmers but also poses many environmental challenges. The socio-economic problems faced by farmers are related to agricultural pests and diseases, scarcity of farm inputs in the market, and limited access to sell products on the market. The environmental issues faced by farmers and local governments are related to coastal abrasion and river-bank collapse along the Buol river, the area’s main river whose catchment takes up a third of the entire district. The lack of market access and the only recently developed roads have prevented the development of industrial or private companies; hence the lack of ES buyers in the area. Therefore, co-investment schemes involving public funding are deemed the most feasible for Buol district. The co-investment activities in the form of climate-smart agriculture that can maintain and rehabilitate ecosystem service provisioning in the landscape. Observing the local conditions, we understand that improving farmer and local government awareness of ecosystem services, and enhancing their ability to monitor the quality and quantity of ecosystem services in their area are prerequisites to develop sustainable co-investment schemes. The challenges that lie in the low awareness and capacity of local stakeholders can be overcome through trainings and awareness campaigns aimed at those actors. However, the main challenge lies in the willingness and commitment of both parties to work together sustainably, which requires a process of learning together and negotiation. It is essential that ‘honest’ brokers exist, with the ability and capacity to facilitate and mediate the process.

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