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The current phase of globalization and neoliberalism has triggered widespread fluctuation in price, specifically in the agriculture sector. The perennial plantations like natural rubber seem to be most affected with such price volatility. With high initial cost and the uncertain economic gains in the future, the sector has stagnated from the previous (flourishing) protected period. This being said, the plantation provides a host of ecosystem services of which carbon store and latex services are predominant. These services are expected to benefit not just locally but also globally. Apart from the direct carbon store from natural rubber plantation, the latex extracted has the potential to substitute the crude oil derived synthetic rubber. With this dual role in mitigating climate change, payment for ecosystem services (PES) seems to be a viable option as opposed to the previous inefficient and (or) ineffective interventions. In comparison to all ‘possible’ interventions, the contract between a natural rubber plantation and tire company for the bundled ecosystem services of latex and carbon store seem to be the most efficient and effective alternative. Motivated from contract farming in Punjab and Haryana, this intervention is expected to not just benefits the plantation owner and the tire company; the economic gains are expected to trickle down to the local tapper, the State and even global organizations like UN. The State is expected to gain additionally through multiple positive ripple effects on the INDC targets. While the study identifies, lack of a possible buyer and inadequate infrastructure, accounting and verification system as limiting factors for the adoption of PES in India; these limitations are countered through careful transaction cost minimization and informed designing of PES. The incentives for both the State and the Tire companies are expected increase the possibility of the implementation of the prescribed PES intervention.
Keywords: ecosystem services, efficiency, natural rubber
