Cutting down forests in the mountains of Bolivia disturbed the water balance in the Santa Cruz region. People living in the valleys were the victims. The deforestation meant they faced both floods and periods of severe drought. With the help of IUCN NL, local nature organization Fundación Natura Bolivia conceived a smart solution: people living in the valley pay the farmers in the mountains to conserve the forest.

Header photo: (c) A compensation ceremony in pucara taken by IUCN NL


The forests in the Bolivian province of Santa Cruz are vitally important to both the countless species of birds that feed and nest there and to the 1.5 million people living in the region. The mountain forests capture rainwater and consequently ensure clean drinking water and irrigation water for the fields in the lower lying valleys. But the trees on more and more hills were being cut down for the timber industry or to make room for agriculture. This deforestation led to serious disruption of the water balance in the region. Water shortages in the valleys resulted in failed crops and livestock deaths. But it also caused an increased frequency of floods. In 2006, more than 10,000 hectares of agricultural land were flooded. The farmers suffered millions of euros of damage.


It was crystal clear to local nature organization Fundación Natura Bolivia. The people living in the valley had to work with the farmers in the mountains to find a solution. Deforestation in the upstream areas was causing the problems in the downstream areas. On the initiative of Fundación Natura, both parties entered into a clear agreement: the people living in the valley would pay for the farmers to receive a beehive and a beekeeping course for every ten hectares of forest that they protected upstream. So it is a classic win-win situation: the people upstream earn income through honey production and the people downstream are assured of a stable water supply.


IUCN NL assisted the first three municipalities to enter into this form of payment for ecosystems services (PES) agreement in 2008. Some 500 families in Santa Cruz have now received compensation for conserving more than 9,000 hectares of forest. In addition to beehives, the farmers receive compensation in the form of fruit tree seedlings that enable the families in the mountains to set up fruit businesses to improve their income.

Dozens of other communities in the region have adopted the idea. Even neighbouring countries such as Peru and Colombia are now applying the concept.

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Liliana Jauregui
Liliana Jauregui
Senior Expert Environmental Justice