Valuation Study

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Cost of Soil Erosion

Attributes

Medium: Land

Country: Vietnam

Analytical Framework(s): Replacement Costs

Unit(s): Income Loss

Study Date: 2000

Publication Date: 2001

Major Result(s)

Resource/Environmental Good VND, thousand currency units per year
(2000)
VND, thousand currency units per year
(2014)1
USD, thousand currency units per year
(2014)2
upland rice-based system3 1,022.00 2,138.90 0.10
eucalyptus-based system 1,019.00 2,132.62 0.10
sugarcane system 635.00 1,328.97 0.06

About the Inflation Adjustment: Prices in Vietnam (VND) changed by 109.29% from 2000 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 2.09 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2025) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.

Study Note: The degradation of land resources is one of the most significant environmental problems in Vietnam. The quality of land in many areas has declined severely. In the Central Coast of Vietnam especially, there is a huge area of sloping uplands that is denuded and exposed to severe. The Central Coast consists of 14 provinces with a total land area of about 97,000 km2 and a population of more than 18 million. The whole region can be described as a very narrow and long strip of flat coastal land dominated by a large sloping area, leaning against the Truong Son mountain range. More than two-thirds of the Central Coast consist of hills and mountains. Compared with other regions in Vietnam, the Central Coast is the poorest and least agriculturally developed, mainly due to a hostile climate and a poor natural resource base. Thus, proper management of natural upland resources is of crucial importance to the region.

Study Details

Reference: Bui Dung The. 2001. The Economics of Soil Erosion and the Choice of Land Use Systems by Upland Farmers in Central Vietnam. EEPSEA Research Report, No. 2001-RR.

Summary: Soil erosion is a significant problem in the uplands of the Central Coast of Vietnam. It affects the livelihood of farmers and could hinder the long-term economic development efforts in the uplands. Yet, trapped in poverty, upland farmers, especially the ethnic minority, are still using erosive land use systems to meet their immediate needs. This study demonstrates how the level of soil erosion varies across the typical land use systems. The fruit tree based agroforestry system is least erosive and most financially profitable. Measured by the annualized income loss, the on-site costs of soil erosion under upland rice-based and eucalyptus-based systems are VND 1,022 and 1,019 thousand/ha per year, respectively. That under the sugarcane system is VND 635 thousand/ ha per year, as compared (in all cases) to the fruit tree-based agroforestry system. The choice of land use system is influenced by farmers' attributes, land plot characteristics, and policy-related variables. Promoting the switch to agroforestry systems and the adoption of soil conservation measures is essential in reducing soil erosion and sustaining development in the uplands. It is, however, a very challenging task.

Site Characteristics: Xuanloc, a hilly commune , was identified for the project. The study focused on four typical land use systems observed in the upland commune of Xuanloc. These included the (a) upland rice-based system, (b) sugarcane system, (c) fruit tree-based agroforestry (AF) system and (d) the eucalyptus-based system. In Xuanloc, reforestation activities began quite extensively in the early 1990's when PAM (French acronym for World Food Program, the United Nations' food programme) and other reforestation programmes intervened. However, AF practice has not been widely adopted in the commune; it was found that only about 30% of farming households adopted AF which accounted for less than 20% of the commune's total agricultural.

Comments: As a result of the recent sugarcane promotion programme in the province, many farmers converted their forestry plots and other agricultural uplands to sugarcane fields. Many people, including policy-makers and upland farmers, expressed concerns and doubts about the relevance of the programme. This study measured and compared the erodibility and financial profitability of sugarcane farming with other land use alternatives.

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