Incentive Mechanisms for Smallholder Agroforestry: Opportunities and Challenges in the Philippines

Incentives generally imply something that contributes to or serves as motivation to accomplish a task, which may lead to rewards. Today, “incentives” are used in many agriculture and forestry initiatives in developing countries to promote wider adoption of agroforestry. In this chapter, we have used the experience from the Philippines to illustrate how, in the midst of various challenges, global and locally designed incentive mechanisms can stimulate smallholder investments in agroforestry. The global carbon market has opened up opportunities for agroforestry through which smallholders benefit from carbon trading. At the national level, a plethora of policy incentives exist for agroforestry, but smallholders hardly benefit from such policies due to lack of information and resources to leverage policy implementation. We conclude that incentives can facilitate the adaptive capacity of smallholders and can stimulate agroforestry investments. We suggest that national institutions should catalyze international carbon incentives for smallholders, while local governments should be primed to address smallholder needs through locally designed incentive mechanisms. Ultimately, effective coordination and linkages are needed to harmonize global, national, and local incentive mechanisms for smallholders to have optimal benefits from agroforestry.