Social and private profitability of tree-based adaptation options to climate change in a dryland area of Tunisia

Climate change exacerbates the effects of water scarcity on livelihoods. Governments can intervene by structuring incentives for agricultural adaptations so that farmers can choose the ones that create more benefits for the society as a whole. This requires consideration of a range of different benefits to different groups within the social cost-benefit analysis (CBA). We assess the social and private profitability of two alternative tree-based adaptation techniques that have received state support in the traditional barley cropping/rangeland systems in Central Tunisia: olive tree plantation, and intercropping with cactus. The results showed that society does not benefit from offering incentives for olive production. The production of irrigated olive trees without incentives is profitable for farmers and for society, while rainfed plantation is not profitable at all. However, it is possible for farmers to increase their incomes without increasing agricultural water use if they are encouraged to adopt intercropping with cactus to supplement livestock food and watering. The findings highlight scope for policies to balance between returns both for society, and for farmers, as revealed through the application of quantitative social CBA.