Incentive Mechanisms through Payments for Environmental Services in Sustainable Agriculture, Sleman, Indonesia

Abstract

Food security is a strategic issue heavily influenced by the sustainability of agricultural land. In this context, Sleman Regency has established a Sustainable Food Agriculture Area (KP2B) through Regional Regulation Number 6 of 2020 on the Protection of Sustainable Food Agricultural Land (LP2B). This regulation mandates the provision of incentives to farmers of LP2B, although the Regent Draft Regulation (Raperbup) governing the technical mechanisms of incentives has not been ratified. Therefore, this research aimed to identify key parameters in calculating LP2B incentives as a form of implementing Payments for Environmental Services (PES). The method adopted was Interpretive Structural Modeling (ISM), which included seven experts from academia, government, farmers, and the private sector. The results showed that soil fertility, irrigation availability, and agricultural productivity were key parameters complementing each other. Soil fertility was the basic potential, irrigation was the main supporting factor, and productivity was the tangible output. These results confirmed that the LP2B incentive scheme was an effort to internalize the value of environmental services into public policy. Furthermore, PES-based incentives served as a strategic mechanism based on regulations to maintain regional food security and environmental quality.