Valuation Study

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Impact of Pollution from Dairy Cattle Rearing


Medium: Health and/or Human Capital

Country: Vietnam

Analytical Framework(s): Economic Analysis

Study Date: 2004

Publication Date: 2005

Major Result(s)

Category Resource/Environmental Good VND
NPV of Alternative Treatment Option Small biogas digester3 12,343,600,000.00 24,055,948,296.00 1,126,067.20
NPV of Alternative Treatment Option Large biogas digester 7,536,690,000.00 14,687,953,673.40 687,548.15
NPV of Alternative Treatment Option Waste removal by middlemen -3,241,530,000.00 -6,317,288,155.80 -295,714.43

About the Inflation Adjustment: Prices in Vietnam (VND) changed by 94.89% from 2004 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.95 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2022) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.

Study Note: The study aimed to conduct an economic assessment of the environmental consequences and pollution control options for dairy cattle rearing in suburban areas of Hanoi, Vietnam. Specifically, it aimed to measure on site and off site effects of pollution caused by untreated wastewater discharge; estimate the costs incurred by households for pollution minimization and/or treatment facilities; evaluate the costs and benefits of alternative technological options including traditional, small-scale biogas generators in backyards, large-scale biogas generator, and waste recovery to address pollution generated from cattle rearing; and suggest appropriate policies to reduce the negative impacts of the enterprise.

Study Details

Reference: Nguyen Quoc Chinh. 2005. Dairy Cattle Development: Environmental Consequences and Pollution Control Options in Hanoi Province, North Vietnam. EEPSEA Research Report, No. 2005-RR6.

Summary: This study presents an economic assessment of pollution control options available to dairy cattle rearing households in Gia Lam district, Hanoi province in the North Vietnam. Dairy cattle farming had grown rapidly in this part of the country in recent years. This report shows that pollution resulting from dairy cattle rearing exists and increases with the scale of cattle production causing negative impacts on the environment as well as the health of those rearing the cattle and the households living on and close to the farms. However, due to the lack of capital and information, farmers do not pay attention to this problem. Among the available pollution control options, the use of biogas digesters is found to be the most efficient from economic and environmental perspectives. However, the expansion of the use of the technology is facing constraints. The study recommends that Government provide technical and financial support to encourage the development of biogas digesters at family and commune levels. It should also conduct information and education campaigns to change the behavior of local residents, and should adopt the 'polluters pay' principle to large scale cattle production to reduce the environmental effects of livestock pollution.

Site Characteristics: The study was conducted in Gia Lam district in the suburban areas of Hanoi, where dairy cattle rearing is rapidly growing. Dairy cattle in Gia Lam accounts for 73 percent of the total dairy cattle population of Hanoi and is considered as one of the main sources of income for the dairy farmers. Three communes were chosen for the survey: Phu Dong, Trung Mau, and Duong Ha, where dairy cattle production has rapidly developed. The profiles and demographics of these communes are presented in Appendix 3. The study site consisted of 4,846 small farm households with total population of 20,108 people of which 493 were dairy cattle rearing households with total of 1,082 cows. Each of the household had a very small land area averaging from 0.24-0.43 ha/household depending on the commune, of which the residence area and land used for animal sheds were about 230-240 m 2 and 24 m 2 per household, respectively. Each household had, on average, 3.9-4.2 people, 1.63-2.67 cows and calves, and 1.74-2.02 pigs. The average amount of livestock manure produced per household per day ranged from 25.5-39.7 kg, which is sufficient to feed a small-scale biogas digester. In each of communes, three types of households were studied: (1) households that kept cattle in their backyards without installing biogas generators; (2) those who installed biogas generators; and (3) households that did not keep cattle. A total of 32 household-respondents were chosen for this study; 10 for type (1), 12 for type (2), and 10 for type (3). Information on waste management practices, perceived impacts of pollution on their property values, generation of biogas, benefits of different waste management options, and other necessary information were collected.

Comments: Following were the environmental variables measured by the study: Level of water pollution: This is measured by the perceptions of households on the effects of dairy cattle rearing on the quality of water; Level of air pollution: The effects of rearing dairy cattle is measured by perceptions of households about indicators such as bad smell, foul odor on clothes, difficulty in breathing, headaches, loss of appetite, and air and water pollution; and The negative impacts of dairy cattle rearing were also measured by applying the hedonic pricing method on the changes in property prices of the selected dairy cattle rearing lands using different pollution control options. The value of the properties defined at each option were capitalized to get the annualized property value using the current discounted rate offered by banks 4for agriculture and rural development (0.6% per month or 7.2 % per year) and taken into account in the benefit-cost analysis as an indicator of environmental quality.