Valuation Study

Value of Giving-Up Vegetable Production

Attributes

Medium: Land

Country: Cambodia

Analytical Framework(s): Economic Analysis

Unit(s): Net Present Value

Study Date: 2002

Publication Date: 2004

Major Result(s)

About the Inflation Adjustment: Prices in Cambodia (KHR) changed by 71.03% from 2002 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.71 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: According to a field survey conducted by the author in early 2002, there were 294 farmers who produced up to 26 tons/day of edible vegetable on 123 ha of farmland located in the three wetlands. These three wetland areas contain large quantities of household wastewater and storm water. Their water has been found to be severely contaminated with heavy metal pollutants from industrial sources, especially lead (Pb), and mercury (Hg). This raises very serious concerns about the health risks of consuming vegetables grown in the wetlands. Although the presence of the industrial pollutants in the vegetables has not been proven, it is known that vegetables can absorb and retain heavy metal pollutants. Precaution thus necessitates stopping the production of vegetables for human consumption in these wetlands.

Study Details

Reference: Sideth Muong. 2004. Avoiding Adverse Health Impacts from Contaminated Vegetables: Options for Three Wetlands in Phnom Penh, Cambodia. EEPSEA Research Report, No. 2004-RR5.

Summary: Farmers in several wetlands near Phnom Penh make a good living by growing vegetables and selling them in local markets for human consumption. These vegetables, however, pose serious health hazards to consumers, since they are grown using wastewater, much of it polluted with heavy metals from industries. This study examines five options to induce farmers to cease vegetable production, while preserving their livelihoods. The options were designed to be roughly equal in effectiveness; their costs were then compared to identify the least costly method of achieving the stated objective. Each option includes a public awareness campaign to warn consumers that the consumption of vegetables grown in polluted wetlands poses serious health risks. In the first of these options, the Compensation Option, the Municipality of Phnom Penh gives each farmer USD 4 for each square meter of farmed land if they cease vegetable production. The average total annual cost to the Municipality is about USD 100,850 over a 20-year period at a 10% discount rate (Table 15). Other options involve the relocation of farmers to new agricultural lands that draw irrigation water either from a river (Relocation Option 1), or from treated household wastewater (Relocation Option 2). These options offer farmers a financial package in term of investment and infrastructure costs. The average total annual costs (to the Municipality) of Relocation Options 1 and 2 would be USD 70,091 and USD 71,115 respectively over a 20-year period. The other alternatives consist of converting vegetable farms into non-edible production areas, or industrial zones (Conversion Options 1 and 2). Their annual costs for the Municipality are not significantly different; USD 166,021, and USD 169,076 respectively over a 20-year period. The affected farmers would each receive a financial package to assist them in securing new jobs. A cost-effectiveness analysis was used to estimate the incremental net costs relative to the base case scenario. The net costs of the five options were then ranked to identify the one with the lowest incremental net costs. There was no assessment of the monetary value of environmental and health impacts in the base case scenario. Relocation Option 2 turned out to be the most cost-effective, followed by Relocation Option 1, and Conversion Option 1. An average individual farmer's net benefits in the new agricultural lands was estimated at about USD 7,868 in Relocation Option 2 compared with USD 1,686 in the base case scenario (see Table 19). A sensitivity analysis showed that Relocation Option 2 ranked first even if various assumptions about costs, vegetable prices and discount rates were varied.

Site Characteristics: Phnom Penh, located on the left bank of the Mekong River, has a population of nearly one million people. The sewerage and wastewater treatment facilities to serve this population are seriously inadequate. The sewage networks, mostly built in the 1960s, are a combined sewage overflow from many sources including households, storm water, and industrial effluents. There are about 160 km of sewer networks in the city core including 2.6 km of open channels. There is no wastewater treatment plant, so 10 percent of the effluents flow directly into the Mekong River without any treatment. The remaining 90 percent is loaded into retention basins that are the natural wetlands. Every day, about 55,600 m3 of household wastewater (equivalent to 2,414 tons per year of biological oxygen demand (BOD5) discharge) and nearly 1 million m3 of storm water are discharged into three wetlands; Boeng Trabek, Boeng Tumpun and Boeng Cheung Ek, when rainfall intensity is at 30 mm per 24 hours.

Comments: As at the time of this report, the Municipality of Phnom Penh has not taken any measures to stop the practice of vegetable cultivation in the polluted wetlands. Previous relocation projects that took place in these wetland areas (from 1998 to 2001) were intended only to facilitate the urban infrastructure and industrial development in these areas. It did not prevent the cultivation of vegetables in these polluted areas. The absence of reliable data on suburban agriculture from the Ministry of Agriculture of Cambodia and the local authorities indicate that the production of edible vegetables in the polluted wetlands is poorly controlled. In order to devise measures to deal with this problem and to assess the costs of such measures, the author with two assistants undertook a series of extensive field visits and surveys from April to June 2002 to the three wetlands of Boeng Trabek, Boeng Tumpun, and Boeng Cheung Ek.

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