Forest conservation and the private sector: stakeholder perceptions towards payment for ecosystem service schemes in the tobacco and sugarcane sectors in Malawi

Abstract

The tobacco and sugarcane industries play an important role in the national economy of Malawi. Collectively, they account for approximately 79 and 22% of the national foreign exchange earnings and gross domestic product, respectively. However, the sustainable production of high-quality tobacco and sugarcane has been threatened due to the continued deterioration of forest ecosystems. Considering the importance of tobacco/sugarcane production for the national economy and rural livelihoods, there is an urgent need to implement effectively different forest conservation initiatives in the country. Considering the complex linkages at the interface of deforestation, sugarcane/tobacco production, and economic activity, this is a complicated task that must be undertaken by both the government and tobacco/sugarcane companies. Incentive-based forest conservation management approaches, including Payment for Ecosystem Services (PES) schemes, can be one of the approaches that can help curb deforestation. However, there are significant knowledge gaps regarding how the private sector can be meaningfully involved in PES schemes, especially in developing country contexts. This paper draws on expert interviews with multiple stakeholders at the interface of tobacco/sugarcane production and forest conservation in Malawi to highlight the role of the private sector in promoting forest conservation among farming communities and the potential for participating in PES schemes. Different forest conservation initiatives are currently being implemented by the sugarcane and tobacco sector, but are not coordinated. While PES schemes are currently not operational in Malawi, there seems to be a relatively high support among private companies towards such incentive-based conservation mechanisms. The introduction of PES schemes as corporate social responsibility (CSR) projects or on a credit-based form (e.g., as conditionality to access credit for farm inputs or eligibility to be contracted to farm tobacco/sugarcane) could be the most appropriate structures for effectively involving the private sector. Establishing an independent multi-stakeholder PES coordination committee would be necessary for the effective coordination and implementation of such PES schemes. However, any future effort to promote a PES scheme in Malawi needs to informed with on-the-ground knowledge and should be weighed against other forest conservation options.