Land Use Policy 35 (2013) 95–106 Contents lists available at SciVerse ScienceDirect Land Use Policy jou rn al hom epage: www.elsevier.com/locate/landusepol Impacts of innovative forestry land use on rural livelihood in a bimodal agricultural system in irrigated drylands Utkur Djanibekov a,∗ , Nodir Djanibekov a,b , Asia Khamzina a , Anik Bhaduri c , John P.A. Lamers a , Ernst Berg d a Center for Development Research (ZEF), University of Bonn, Walter-Flex-Str. 3, 53113 Bonn, Germany b Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO), Theodor-Lieser-Str. 2, 06120 Halle (Saale), Germany c Global Water System Project (GWSP), University of Bonn, Walter-Flex-Str. 3, 53113 Bonn, Germany d Institute for Food and Resource Economics, University of Bonn, Meckenheimer Allee 174, 53115 Bonn, Germany a r t i c l e i n f o Article history: Received 18 September 2012 Received in revised form 6 May 2013 Accepted 8 May 2013 Keywords: Sustainable rural development Dynamic farm-household model Agricultural contracts Forest carbon project Marginal croplands Short-rotation forestry a b s t r a c t The conversion of marginal croplands to tree plantations, as an option to address climate change, land degradation, and irrigation water scarcity, as well as to improve the welfare of local population requires prior analysis. This study analyzed the impacts of afforestation of marginal croplands, including poten- tial benefits in the form of carbon sequestration rewards via the Clean Development Mechanism, on the livelihood of commercial farms and rural households by considering their interdependencies via wage- labor relations in irrigated agricultural regions of the lower reaches of the Amu Darya River, Central Asia. A dynamic nonlinear programming model was developed that jointly maximizes profit of farm and net incomes of rural households over a 15-year horizon under conditions of decreasing irrigation water availability and forestry plantations with a single seven-year rotation period. The results showed that the introduction of short-rotation plantation forestry in degraded irrigated croplands can help mitigate the repercussions of water shortages on rural livelihood, while sustaining energy needs, income, and food security. Although income and food consumption of rural households may decline from year two to six after afforestation, the subsequent increase in farm profit following the harvest of tree planta- tions would be transmitted to rural households through existing wage-labor payment arrangements. The incorporation of fuelwood into labor payment schemes would substitute the use of fossil fuels by rural households and thus substantially decrease their energy expenses and CO 2 emissions. Furthermore, given the low irrigation water demand of trees, afforestation would increase irrigation water availability for more productive croplands. © 2013 Elsevier Ltd. All rights reserved. Introduction Global warming is a major concern in arid and semi-arid areas (Solomon et al., 2007), as it will contribute to decrease of irrigation water availability, the spread of cropland degradation, and the diminishment of rural welfare (Holden and Shiferaw, 2004; Fischer et al., 2007; Solomon et al., 2007). Establishing tree plantations on degraded croplands in drylands bears the potential to mitigate such effects by improving land productivity and irrigation water use effi- ciency, sequestering carbon (C) and generating income (Djanibekov et al., 2012b; Khamzina et al., 2012). Under the Kyoto protocol for ∗ Corresponding author. Tel.: +49 228731852; fax: +49 228731869. E-mail addresses: utkur@uni-bonn.de, utkurdjanibekov@yahoo.com (U. Djanibekov), djanibekov@iamo.de (N. Djanibekov), asia.khamzina@uni-bonn.de (A. Khamzina), abhaduri@uni-bonn.de (A. Bhaduri), jlamers@uni-bonn.de (J.P.A. Lamers), e.berg@ilr.uni-bonn.de (E. Berg). climate change mitigation, afforestation and reforestation efforts implemented within the Clean Development Mechanism (CDM A/R) framework were postulated as cheaper options than the other offset schemes for mitigating climate change impacts, while also having the potential for enhancing sustainable development (Boyd et al., 2007; Palm et al., 2009). Farm forestry was also recognized as an effective agricultural land use for making more food avail- able to the hungry, reducing poverty, and improving environmental conditions (UNEP, 2011). To be effective, economic and ecological aspects need to be considered simultaneously when aiming to introduce farm C sequestration activities through afforestation (Paul et al., 2013). Yet, published findings on the sustainable development objectives of C forestry are scarce and reach contrasting conclusions. Xu et al. (2007) and Shuifa et al. (2010) argued that such projects have the potential to alleviate poverty and increase job opportunities in China. In contrast, Glomsrød et al. (2011) reported that such projects have limited ability to reduce poverty in Tanzania, despite 0264-8377/$ – see front matter © 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.landusepol.2013.05.003