Indirect use value of improved soil health as natural capital that supports essential ecosystem services: A case study of cacao agroforestry

Yudha Kristanto, Suria Tarigan, Tania June, Bambang Sulistyantara and Pini Wijayanti
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Yudha Kristanto: Natural Resources and Environmental Management Science, Graduate School, Institut Pertanian Bogor (IPB University), Bogor, Indonesia
Suria Tarigan: Department of Soil Science and Land Resources, Faculty of Agriculture, Institut Pertanian Bogor (IPB University), Bogor, Indonesia
Tania June: Department of Geophysics and Meteorology, Faculty of Mathematics and Natural Sciences, Institut Pertanian Bogor (IPB University), Bogor, Indonesia
Bambang Sulistyantara: Department of Landscape Architecture, Faculty of Agriculture, Institut Pertanian Bogor (IPB University), Bogor, Indonesia
Pini Wijayanti: Department of Natural Resources and Environmental Economics, Faculty of Economics and Management, Institut Pertanian Bogor (IPB University), Bogor, Indonesia

Agricultural Economics, 2024, vol. 70, issue 3, 137-154

Abstract: Multifunctional landscapes, such as agroforestry, that improve soil health are essential in sustaining terrestrial life by supporting various ecosystem services (ESs). However, decision-making often requires more attention to soil health because its parameters have no market value. In this study, we aim to evaluate soil health parameters in cacao agroforestry and monoculture and their degradation due to erosion and to estimate their indirect use value (IUV). We develop a soil health economic valuation approach bridged by ESs because the economic valuation of ESs tends to be better studied. We estimated the IUVs of the eight soil health parameters by using the direct proxy revealed prevalence valuation method on the basis of the valuation of the four ESs they support: water regulation, climate regulation, nutrient retention and biodiversity. The total IUVs for cacao agroforestry were USD 633 with Endoaquepts and USD 723 with Dystrudepts and for cacao monoculture were USD 415 with Endoaquepts and USD 575 with Dystrudepts. Soil carbon has the highest contribution to IUV, followed by soil nitrogen. Agroforestry not only increases IUV but also minimises its decrease due to erosion. Despite economic valuations being subject to uncertainty, these results encourage the internalisation of soil health values in sustainable land management design.

Keywords: biodiversity services; multifunctional landscape; regulation services; revealed preference; soil indirect use value (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:70:y:2024:i:3:id:281-2023-agricecon

DOI: 10.17221/281/2023-AGRICECON

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