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

  • Djanibekov U
  • Khamzina A
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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.

Author-supplied keywords

  • Ecosystem service trade-offs
  • Ecosystem services
  • Expected utility
  • Farm income risk
  • Land-use diversification
  • Stochastic dominance

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