http://www.fao.org/ecosystem-services-biodiversity/incentives/en/ Presentation of the Incentives for Ecosystem Services case study for Colombia. © FAO: http://www.fao.org

1. • Deforestation and fragmentation of riparian
habitats
• Steep topography agriculture increasing soil
erosion, landslides and water sedimentation
• Intensive agriculture leading to land degradation
and loss of productive capacity of soils
• Mining activities within the watershed increasing
sedimentation and pollution
• Mismanagement of rural and urban ecosystems
and watersheds causing a decrease in water
availability and waste infrastructure capacity
• Lack of financial capital:
• To implement forest restoration and sustainable agricultural
practices
• For long-term sustainability of conservation and sustainable
agricultural practices
• Lack of information and technical assistance:
• To adopt improved practices
• Regarding existing government programs
• And awareness of current water issues and their inter-sectoral
nature
• Institutional mis-trust and weak community organizations
• Lack of institutional coordination, especially public- private
partnerships
• Public insecurity from the presence of armed groups
• Financial capital to :
• Support land restoration and forest conservation
• Invest in erosion prevention measures and sustainable
agricultural practices
• Establish alternative livelihoods
• Invest in improved water storage infrastructure
• Technical assistance and on-going support to:
• Build farmers’ capacity to adopt improved agricultural
practices
• Raise awareness on existing government programs and how
farmers can access them
• Develop value-added markets for coffee through certification
schemes
• Improved institutional coordination, strengthened
stakeholder participation and development of public-
private partnerships
• Forest protection and restoration to improve forest
habitats and connectivity
• Soil stabilisation to reduce landslides and erosion, and
maintain water quality and flow
• Sustainable agricultural practices such as silvopasture,
mixed cropping of agroforestry plantations
• Development of alternative livelihood options such as
agroforestry and bee hives
• Improved water and waste infrastructure
Threats to the Ecosystem Desirable Practices
Barriers to their adoption
Incentives Required
FONDO
CONSERVACION
LAS CEIBAS
CASE STUDY: Las Ceibas, COLOMBIA
1
Incentives for Ecosystem Services in Agriculture (IES)

2. COLOMBIA : Financial Investment for
Best Practices
Forest protection and
restoration to protect water
recharge area and reduce
GHG emissions
$ FIDUCIA (water user fees)
$ ONU REDD
$ CIF
Risk management and
ecosystem services
monitoring
$ Fondo Conservacion Las
Ceibas
Improved primary
processing
$ ICR
$ IAT
Reduced agricultural chemical
use and improved soil
management
$ PRONATTA
Certified sustainable shade coffee
plantations
$ Federation Nacional Caféteros de
Colombia
with improved agroforestry and grazing
systems
$ ICR
$ IAT
Alternative livelihood development
such as bee-keeping
$ Asociación de Apicultores
Bioengineering and
irrigation to stabilize
soils
$ EDAT
Combined, these efforts result in improved farm productivity and resilience, and food security
2 Key: Public programme | Private sector investment
Incentives for Ecosystem Services in Agriculture (IES)

3. 3
COLOMBIA: Incentives for Ecosystem
Services
Incentive Type Key:
Conservation and landscape rehabilitation
• Forest protection and restoration
• Agroforestry plantation development
$ FIDUCIA
$ ONUREDD &
$ CIF
• Finance to:
• Restore, reforest, conserve and manage
watershed forest in protected areas
• Invest in sustainable agroforestry
management practices
• Technological assistance and capacity building to:
• Scale-up agroforestry
• Maintain tree nurseries
$ Federacion
Nacional Café
$ Asociasion de
Apicultores
Livelihood diversification and strengthened
local capacity
• Development of alternative income generation
opportunities
• Support to:
• Develop and market certified sustainable
coffee
• Train bee keepers and market apiculture
products
• Create cooperatives and improve access to
higher-value market opportunities
Increased sustainable agricultural productivity
• Improved crop varieties and silvopasture
systems
• Improved soil management practices
$ PRONATTA
$ ICR
$ IAT
• Finance for improved seeds and organic fertilizers
• Training in organic land husbandry such as
manuring, mulching and composting
Incentives from the programmes/ investors:Financed by:Best practices:
$ Fondo
Conservacion
Las Ceibas
$ EDAT
• Ecosystem monitoring
• Soil stabilization measures and improved
irrigation
• Ecosystem services and social outcomes
monitoring
• Finance to construct bench terraces to stabilize
soils
PES
IES
Incentives for Ecosystem Services in Agriculture (IES)

4. The Fondo Conservacion Las Ceibas (FCLC) is a strategic, collective and participatory basin-wide partnership to
sustainably manage and protect the Las Ceibas river basin. Integrated co-finance, coordinated through a common fund,
Fiducia, is provided from four sources: i) Water user fees from the Neiva water utility, ii) Public funds from the Neiva
municipality, III) funds from the departmental government of Huila, and, iv) the Regional development cooperation of
the Magdalena River. Legislation requires that the public funds are allocated for watershed protection. Co-investments
for the first year in the Las Ceibas basin totaled US$1,622,434, reaching US$2,773,656 in 2012.
Using a basin-wide approach to landscape planning, this fund aims to address threats to the Las Ceibas ecosystem from
intensive agricultural practices and pressure from growing rural populations on natural resources. Built around a
hydrological PES scheme financed by water users, the initiative combines public programs and the private sector, and
seeks to achieve mutually-beneficial environmental and rural development targets. Together they finance and support
an integrated package of incentives that effectively protects the Las Ceibas ecosystem services and enables the
transition to sustainable agricultural practices.
The Las Ceibas river basin ecosystem is threatened by:
• The reliance on intensive unsustainable agricultural practices such as the felling of valuable timber, cattle ranching
within the steep topography of the area and expansion of agricultural areas through slash-and-burn for bean
cultivation. These practices have led to:
• Deforestation and fragmentation of riparian habitats.
• Soil erosion which has increased sedimentation of water courses and increased the risk of landslide and flooding
events. This threatens rural livelihoods and disrupts water supplies to cities within the watershed such as Neiva,
reliant on Las Ceibas as their sole potable water source.
• Reduced soil fertility. A reduced productive capacity of soils forces farmers to convert additional forest areas to
rapidly increase productivity for cattle pasture, coffee and cocoa, causing further deforestation and
fragmentation of riparian habitats.
• Mining activities within the watershed have increased levels of sedimentation, land and water pollution.
• Increased population size and the development of sugarcane agrobusiness has increased the demand on rural and
urban ecosystem services.
• Ineffective coordination and weak community institutions have reduced trust in and ability of their management of
rural and urban ecosystems and watersheds, causing disruption in water availability and poor water and waste
infrastructure.
COLOMBIA: Overview
4
Incentives for Ecosystem Services in Agriculture (IES)

5. • Restoration of forest cover can also help to stabilize soil structure, improve forest connectivity and increase carbon storage. Increased vegetation
can protect springs, water recharge areas and riparian forests of the Las Ceibas basin and increase habitat for native biodiversity.
• Construction of bioengineering to stabilize soils, such as bench terraces, can assist to control soil erosion, reduce the risk of landslides and the
potential for sedimentation of water courses.
• Implementing land planning for sustainable agricultural production can increase overall production efficiency and environmental protection by
reducing pressure on soil fertility from intensive practices. Sustainable practices such as silvopasture, improved agroforestry plantations (such as
cirrus, cacao and shaded coffee), improved irrigation systems, and establishing alternative livelihoods such as bee-hives or value-added markets for
coffee. This can protect soils, reduce the need to expand agricultural land and increase the long-term income potential for smallholder farmers.
• Strengthening grassroots organisations and institutional coordination can support the implementation of integrated land management and
improve infrastructure development such as water infrastructure, irrigation and waste management throughout the Las Ceibas basin.
• Monitoring and risk management can observe ecosystem services outcomes and reduce the risk of flooding, landslide and other extreme events
within the river basin.
Smallholder farmers, however, face barriers to adopting these sustainable practices:
• A lack of access to information, technological assistance and long-term support to adopt improved practices, such as Farmer Field Schools.
• Limited awareness of current water issues and existing government programs that farmers could benefit from.
• Financial capital:
• A lack of financial capital to invest in soil stabilization measures, implement reforestation, improve infrastructure and invest in alternative
livelihoods. The transition cost of implementing sustainable agricultural practices also prevents farmers moving away from unsustainable
practices, such as slash and burn to produce beans, or improving water and waste management infrastructure.
• Current financial incentives to fence springs (~USD 1,000) lack additional finance to manage them. Cattle, therefore, break through fences
or farmers destroy them to expand grazing areas.
• Municipal finance for conservation is also insufficient to both purchase and manage land for ecosystem services.
• Limited access to higher market opportunities for sustainable agricultural products.
• Ineffective organization and lack of coordination between institutions reduces local awareness of existing government programs, increases mis-trust
in governance and reduces the capacity for basin-wide land-management implementation.
COLOMBIA : Best Practices and
Barriers to AdoptionIncentives for Ecosystem Services in Agriculture (IES)

6. COLOMBIA : IES Initiatives
Program Financed by: Outcome and Activities:
Fondo Conservacion Las Ceibas -
FIDUCIA - Water users fees & public
funds allocated for watershed
protection
i) Restore, reforest, conserve and manage the watershed forest protected area; ii)
Implement bioengineering, applied to control erosion, water harvesting and improved
cocoa production; iii) Contribute to basic sanitation infrastructure; iv) Strengthen
institutional organization; and, v) Conduct environmental monitoring.
ACA Asociacion Colombiana de
Apicultores
Conducts research, support and train bee keepers, and improve marketing of apiculture
products and services.
CIF Certificado de Incentivo Forestal -
Forestry Incentive Certificate
Financial incentive for private landowners, or municipal or decentralized bodies who
provide public water and sewage services to offset externalities of reforestation.
EDAT Incentivo para la elaboracion de
estudios y disenos para proyectos
asociativos de adecuacion de tierras
Improve infrastructure and irrigation projects to stabilize soil in future construction,
expansion or rehabilitation in Land Improvement Districts.
FNC Federacion Nacional Café –
Colombian Coffee Growers
Federation
Guarantees the purchase of coffee harvest at transparent prices, technical assistance to
improve sustainability and productivity (such as reduced water use in post-harvest
processes), and access to value-added markets to improve livelihoods. Monitors soil
erosion, water ecosystem services and efficient use of agrochemicals.
IAT Incentivo a la Asistencia Tecnica Technical assistance and technology transfer to improve competitiveness and productivity in
agriculture, and also help reduce inequalities.
ICR Incentivo a la Capitalizacion Rural Access to credit for new investments to modernize, increase competitiveness and
sustainability of agricultural production, such as the use of production machinery and
primary processing.
PRONATTA Programa Nacional de Transferencia
de Technologia Agropecuaria
Technical assistance to build the capacity of farmers and implementing agencies in
sustainable agricultural practices. These include reduced agricultural chemical use and
improved soil management practices.
ONU REDD UN-REDD Programme Compensation to reduce deforestation, improve governance of forest resources and reduce
GHG through climate change mitigation.
6
Incentives for Ecosystem Services in Agriculture (IES)

7. Policy Recommendations [To improve coordination and integration of initiatives and incentives]
• A conductive legal framework, supported by law to allocate public funds for watershed investments by regional
development cooperations and municipalities.
• Important prerequisite is the perceived need for ecosystem services (i.e. risk for water supply) by downstream
stakeholders to engage in the process. It is important to use basic tools such as water balance models to illustrate the
added value of ecosystem services conservation in terms of return of investment, reduced sediment loads and
regulated flows, etc.
• Efficiency is improved if stakeholder’s contributions are amalgamated into a single trust fund that is administered by
one actor (in this case, CAR) and overseen by a catchment committee composed of all contributing actors.
• Efficient delivery can be ensured by implementing the programme through an external agent, in this case FAO. Where
there is a limited contract with the agent (in this case, six years), an exit strategy is needed to ensure that local capacity
is built. This enables funds to continually be administrated during the implementation phase.
• To enable sustainability of the IES scheme:
• Strategic alliances should be sought with incentive programmes at national scale. (For example, certification
schemes, Ministry of Agriculture)
• It is crucial to seek further buy-in from the private sector not just as a social and environmental responsibility
strategy, but as a core business cost to be included consistently in planning processes. To make this happen, it
is important for the private sector to understand, with scientific tools, their risk exposure and the cost-benefit
analysis of investing in conservation to reduce this risk.
• Policy is crucial here. There is a good opportunity in Colombia now related to law (decreto 953) that states an
obligation for municipalities to invest at least 1% of income (ingresos corrientes) in PES schemes and/ or
buying strategic areas for water provision.
Some policy suggestions from the Regional Dialogue:
• CIF
• Amend Law 139 94: “to promote the realization of direct investments in new protective forest plantations
character-producer on land suitable for forestry,” to extend it to land agroforestry fitness.
• ICR
• Could be regulated through the National Agricultural Credit Commission, expanding the regions and
explicitly investing in activities to achieve best practices
• Could be regulated in Article 5 of Law 1133 (2007) in terms of support, in particular: “the incentive to
productivity including allocation of resources aimed at promoting the culture of good agricultural and
livestock practices, the partnership between producers, among others.”
• Extending regions in which ICR is implemented.
• REDD+
• Expansion of explicit activities to achieve REDD+
• Partnership projects through value chains, could be generated through Credit Line
COLOMBIA : Policy
Recommendations
7
Incentives
Now
Future
Prohibition of use
Taxes/ Charges
Property use rights
Mandatory farm set-asides
Subsidies
Conservation easements
Permits and quotas
Marketing labels –
Certificates/ Standards
Offsets
Green Public Procurement
Voluntary farm set-asides
Conservation concessions
Direct Payments for
Ecosystem Services
Corporate Social
Responsibility
Marketing labels (without
certification/ standards)
Rewards for Ecosystem
Services (RES)
Cultural and social norms
Incentives for Ecosystem Services in Agriculture (IES)