Implementing Agroforestry in the Supply-Chain: Evidence from Coffee Farmers

Agroforestry—a land use system in which trees are grown among crops—can turn coffee farms into carbon sinks, sequestering up to 0.16 metric tons of CO2e per metric ton of coffee produced (IDH 2019). Agroforestry also supports climate change adaptation by shielding coffee plantations from heat and reducing damage caused by heavy rains. Trees also provide income diversification for farmers. Despite its potential benefits, agroforestry adoption is low, particularly in lower-income countries (Amare and Darr, 2020).

Building on a long-term collaboration with a multinational, we design and evaluate a supply-chain agroforestry intervention. We embed a payment for ecosystem services (PES) scheme to incentivize agroforestry within pre-existing sourcing relationships between our partner and coffee farmers. The program has the potential to solve key contract design and implementation challenges, which prevent the scale-up of PES schemes in low- and middle-income countries. The project will generate evidence on how embedding a PES scheme within a supply-chain can promote efficient climate change mitigation and adaptation.