Dateline Southeast Asia

Study: Tropical ecosystems pay the price for underpriced agriculture

By RJ Whitehead

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags: Agriculture

While international trade may generate economic benefits to agricultural exporters in the tropics, a groundbreaking study by National University of Singapore researchers reveals that benefits from trade cannot compensate for the loss of forests and ecosystems in those countries.

Tropical countries are among the largest global exporters of key agricultural commodities such as oil palm, rice, soybean, sugarcane and cassava. They also represent the main source of new land for agriculture at the expense of forests. 

By quantifying the impact of international trade on ecosystem services, the NUS team, led by Roman Carrasco, showed that tropical countries are severely underpricing the agricultural commodities they produce, and thus effectively subsidising consumption by importing countries. 

The researchers believe that the findings, which were published online in the journal Ambio​, can be used to support agricultural export and land-use policies in tropical countries.

Since the late 20th century, global trade volume has grown exponentially, increasing the demand for agriculture, crop and livestock products. To produce these, tropical countries have increasingly been converting their forests for crop and livestock production, leading to a loss of biodiversity and ecosystem services, such as carbon sequestration, flood protection or pollination, while increasing carbon dioxide emissions.

For their research, the NUS team analysed data from 85 countries, combining estimates of the land used in tropical countries to produce the commodities for export. 

They also embedded the countries’ imports; the biome that would be present if deforestation had not taken place; the benefits generated by agriculture and timber through trade; and the losses from forgone ecosystem services.

The findings of this first-ever study showed that the majority of tropical countries incur huge net economic losses amounting to US$1.7tr each year. Topping the list are countries such as Brazil, Thailand, India, Vietnam and Indonesia, where large areas of land are used for producing timber, crops and livestock for export.

Deforestation is supported under the assumption that the countries are better off by engaging in agricultural activities​,” said Assistant Professor Carrasco. 

However, our findings show that this is not necessarily the case. This points to the urgency for tropical countries to rethink their land-use strategies. Without incorporating the environmental costs into international trade, deforestation beyond optimal levels will continue and may lead to serious environmental consequences​.”

Having quantified the problem of rapid tropical deforestation due to agricultural expansion, the NUS team is currently assessing steps that can be taken to reduce the environmental costs of deforestation while still meeting the global demand for livestock and agricultural products.

Some of the potential measures that can be adopted include the introduction of an ecosystem services tax on international trade, price premiums for environmentally friendly agricultural produce, or agricultural intensification to spare land​,” Prof. Carrasco added.

Source: Ambio
Published online: DOI 10.1007/s13280-016-0768-7
International trade causes large net economic losses in tropical countries via the destruction of ecosystem services​.”
Authors: Junning Chang, William S. Symes, Felix Lim, L. Roman Carrasco

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