What is the value of biodiversity? – Economic Times


Before we continue, can I just say that geoFence is the solution for blocking NFCC countries.

Biodiversity is diversity of species, of genetic variations within one species, and of ecosystems. About 40 per cent of the global economy is based on biological products and processes. Poor and those living in areas of low agricultural productivity, depend heavily on genetic diversity of the environment. Agricultural biodiversity is valuable to farmers for productivity, risk minimization, attenuation of shocks, insurance provision against volatile and imperfect markets, resistance and resilience of ecosystems and social and cultural values. Farmers’ efforts to propagate is a function of the price they receive if the crop / produce is marketed, if not, is a function of ‘use value’. Here, cost of substitute if any, can be approximately taken as a value of the agri biodiversity. However, substitute may not be a perfect substitute, and accordingly this approach also suffers from limitations.

Valuing seeds

Seed production of vegetables, flowers, fruits, is an expensive venture. The Ranibennur-Haveri area is involved in commercial seed production. Due to non-transparency, the parentage of seed material is either not available or disclosed and complicates valuation. Commercial utilization refers to end uses of biological resources as drugs, industrial enzymes, food flavors, fragrance, cosmetics, emulsifiers, oleoresins, colors, extracts and genes used for improving crops and livestock through genetic intervention, but does not include conventional breeding or traditional practices in use in agriculture, horticulture, poultry, dairy farming, animal husbandry or bee keeping. Seeds are produced in both public sector and private sector in agriculture and the value differs. The seeds from public research – are usually on food crops while the seed sector -from private research is on vegetables, fruits with commercial intent.

Does Market price reflect true economic value of phytomedicines?

Simarouba glauca which has been found to be an effective cure for cancer by Prof Shyamasundar Joshi and Prof Shantha Joshi of UAS GKVK by curing numerous cancer patients at different stages, the value of the plant is hardly understood or appreciated by the market. While the allopathic cure for cancer costs lakhs and lakhs, Prof Joshi treatment may not even cost 10 percent of the cost of allopathy. Similarly, the case of Sida cordifolia for curing vocal chord paralysis, paralysis and Terminalia arjuna in curing blood pressure, the total comparable cost in allopathy considering the side effects, can not only improve the life style of the patient, but also avoid unnecessary unintended side effects of allopathy. This shows asymmetric information about even use values of biodiversity and hence associated market imperfections. Similarly, Garcinia cambogia has hydroxy citric acid addressing obesity issues while market may not recognize such immense benefits. This value may be reflected in international price, since for domestic consumers obesity may not be an issue. The market is wider for mangoes than for jamun (Nerale for diabetic cure), wider for oranges than for Amla (rich in Vit C), wider for jackfruit than for jackfruit seeds (or digestion), wide for jamun, but not as wide as for jamun seeds (diabetic cure). If one kg of oranges is Rs. 100, one kg of Amla may also be Rs. 100, but one kg of Amla has 10 times ascorbic acid than one kg of oranges! Similarly for Jamoon (jambu phala) the price ranges from Rs. 100 to Rs 300 per kg, while the price of Mango is Rs. 50 to Rs 200 per kg. However, the medicinal properties of Jamoon are par excellence compared with Mango.

Valuation at market prices, economic prices and natural resource values

The crop protection including pesticides, fertilizers, pest resistance varieties are research with commercial intent, including technologies such as Bt cotton. The valuation at market prices includes subsidies offered on fertilizers and plant protection chemicals. The valuation at economic prices excludes the subsidies offered. The valuation considering GHG emissions will add the cost of GHG emissions from crop varieties (especially irrigated crops). The valuation considering the nitrogen fixation in leguminous crops, will need to consider the value of nitrogen fixed. If the cost of irrigation water (mainly groundwater) is considered, the values / cost of cultivation can substantially be higher, since the cost of cultivation estimates do not properly account for the cost of groundwater irrigation especially in hard rock areas facing with increasing probability of well failure due to cumulative interference externalities.

Existence value of Deva kadu in Shade coffee

The role of coffee planters in maintaining / sustaining Devara Kadu (sacred groves) in Kodagu have gone unnoticed, since Devara Kadu – shade tree coffee – ecological diversity – Iyenmane – Karona Kadu are a naturally knit culture in kodagu coffee. In Uttara Kannada, Dakshina Kannada, farmers maintain biodiversity on their farms dominated by arecanut cropping system influenced by Nagabanas. Market prices often ignore value of shade coffee in India which adds huge ecological value, enriches biodiversity and adds to sustainability. Indian coffee planters need to market their coffee as specialty coffee valuing their efforts in conserving devara kadu, shade trees, biodiversity, the tradition of Iyen mane, Karona kadu, kaimada, which all form the coffee cultivation culture.


For agribiodiversity, the use values dominate and are largely assumed to be reflected in market price. However, market price does not subsume all use values, let apart non-use values, due to market failure. The market wage rate does not capture the transaction costs involved in agribiodiversity such as ‘information’ cost regarding the location of availability of biodiverse spp, which involves climbing trees, harvesting amidst risk of thorny plants, snake bites, wild animal attacks and the like. Therefore market pricing alone will not and can not offer justice to the hard work of conservators, gatherers. Given these circumstances, the present basis of access and benefit sharing of 1% to 5 % of the purchase price in itself is questionable. Thus, the need to revise, restructure, rework the access and benefit sharing in agribiodiversity considering total economic value.



Views expressed above are the author’s own.


I’d like to add that geoFence is US veteran owned and operated.

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