Coffee farmers willingness to accept payments for ecosystem services: Evidence from a choice experiment in Honduras

Coffee production in Central America provides a valuable yet volatile source of income for hundreds of thousands of small-scale farmers and employment for millions of workers. Expansion of coffee production into previously forested areas has caused the loss of a wide range of valuable ecosystem goods and services while contributing to global climate change and socioeconomic instability. Growth in carbon markets in agricultural settings and production of specialty coffees to meet consumer demands for products that support environmental and community outcomes suggests promise for favorable change. Yet, the incentives required to promote widespread transition toward sustainable coffee production are poorly understood, leaving policymakers with insufficient information to design scalable forest conservation initiatives. To fill this gap, we use a discrete choice experiment administered to coffee farmers in Honduras to understand farmers' willingness to conserve natural forest on farmlands in exchange for higher coffee prices and payments from carbon credits. Results suggest that payments for ecosystem services are a viable option for improving the sustainability of coffee production. However, coffee farmers may be reluctant to set aside significant percentages of the landscape for forest restoration. Low-income farmers appear more averse to forest conservation, suggesting the need for insurance against revenue losses.