Innovative financing mechanisms for promoting sustainable land management (SLM) in selected agro-ecosystems in the Central Highlands

Agricultural area in Ambewela

Project title:  Innovative financing mechanisms for promoting sustainable land management (SLM) in selected agro-ecosystems in the Central Highlands

Location: Kandy, Badulla and Nuwara Eliya Districts in the Central Highlands, Sri Lanka

Duration:  From 3 January, 2019 to 3 October, 2019

Project Background:

Land degradation in Sri Lanka has become a serious problem that needs immediate attention. It has been estimated that nearly one third of the land in the country is subjected to soil erosion. Soil erosion and soil fertility degradation are considered to be the major contributors to land degradation in Sri Lanka. Land degradation in the Central Highlands has been threatening the ability of agro-ecosystems in the area to provide global environmental benefits and to sustain economic activities and livelihoods of people depending on ecosystem goods and services.

The “Rehabilitation of degraded agricultural lands in Kandy, Badulla and Nuwara Eliya Districts in the Central Highlands” project, funded by the Global Environmental Facility (GEF) and implemented by UN Food and Agriculture Organization (FAO) with the Ministry of Mahaweli Development and Environment (MoMD&E) in close consultation with the Natural Resource Management Centre (NRMC) of the Department of Agriculture (DoA) is being implemented to address land degradation issue in selected areas of the Central Highlands of Sri Lanka. IUCN is engaged in providing environmental economics expertise to this ongoing initiative in identifying innovative financing mechanisms for SLM. 

With this project, IUCN is supporting the development and implementation of innovative funding systems to promote SLM. One of the underlying reasons for insufficient investments in SLM is that the government and the farming community haven’t accounted adequately for the real cost of land degradation and benefits of SLM to individuals as well as the economy.

The costs of not implementing SLM is borne by the society as a whole (negative externalities) and the public benefits of adopting SLM are not fully valued by farmers and landholders. Therefore, there is a critical need to identify and evaluate on-farm and off-farm effects of land degradation, as well as ecosystem services generated by SLM practices, so that such information can be used in developing appropriate financing mechanisms to promote SLM.

Furthermore, as investments in SLM generates greater social benefits compared to short-term private benefits, there is a need to provide incentives to resource poor farmers to conserve land and compensate them for additional labor or investments made in land management.

Objectives of the project

Enhance capacity for developing innovative funding mechanisms in sustainable land management is established in both the public and private sectors

Expected Outputs

  1. Ecosystem services provided by the agricultural sector in selected sub-watersheds in three project districts identified and mapped.
  2. An inventory of ongoing and past projects related to SLM in project areas.
  3. Economic value of ecosystem services provided by agricultural sector in selected sub watersheds assessed.
  4. Validated and agreed guidelines is in placed to implement innovative financing mechanisms with concerned sectors.
  5. National level awareness workshop on ecosystem services benefits and innovative SLM financing.
  6. Training of trainers on ecosystem services benefits and innovative SLM financing.
  7. At least two workshops per each district to raise awareness on ecosystem services and innovative financing systems, engaging both private and public sector stakeholders.
  8. Five innovative financing mechanisms for SLM identified and three of them developed into project proposals for funding by innovative and novel sources of funding   

Donor/s:  FAO

Partner/s: Ministry of Mahaweli Development & Environment and Natural Resource Management Centre

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