Economic Value of Mangroves
Attributes
Medium: Land
Country: Thailand
Analytical Framework(s): Economic Analysis
Unit(s): Net/Forgone Benefit
Study Date: 1996
Publication Date: 1998
Major Result(s)
| Resource/Environmental Good | THB (1996) |
THB (2014)1 |
USD (2014)2 |
|---|---|---|---|
| Direct use value of the mangrove by locals: mean annual value per household | 36,984.60 | 55,682.90 | 1,691.80 |
| Direct use value of the mangrove by locals: aggregate annual value for the village | 1,405,410.00 | 2,115,943.13 | 64,288.00 |
| Direct use value per rai per annum of the mangrove by the locals | 562.16 | 846.37 | 25.72 |
| Economic value of mangrove per rai | 15,230.90 | 22,931.19 | 696.71 |
About the Inflation Adjustment: Prices in Thailand (THB) changed by 50.56% from 1996 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.51 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 net returns per rai (6.25 rai = 1 ha) from mangroves should include total economic value. However, this study only included some of the use values which consist both direct (local use value) and indirect use values (value in terms of off-shore fishery linkages and value in terms of coastline protection). The estimated economic value of mangrove per rai is the midpoint of the given range in the study (THB 13,339.34 to THB 17,122.42 per rai). There is a tendency for underestimating the economic value of mangrove in terms of off-shore fishery linkages (the study ignores other potential direct use values such as tourism), while overestimating the value in terms of coastline protection. Also, non-use value is completely neglected.
Study Details
Summary: Mangrove ecosystems, especially in the tropics, host a lot of flora and fauna, and they also provide major environmental services such as storm protection, shore stabilization, and control of soil erosion and flooding. In Thailand, however, these mangrove ecosystems are rapidly disappearing (approximately 6,225 ha/yr), primarily due to conversion into intensive shrimp farms which have become a very popular business venture. Another reason for the destruction of mangrove areas is policy failure. This study aimed to conduct an in-depth economic analysis using valuation techniques to assess the foregone benefits of mangroves compared to net returns from converting the areas into shrimp farms. It also aimed to evaluate the potential role of the local community in protecting the mangrove area. In assessing the net foregone benefits of mangroves and comparing these benefits to those of an alternative use, option and existence values were completely omitted. Local use value and indirect use values (off-shore fishery linkages) were included in the estimation procedure. The study also evaluated the village profile and villager's attitude towards conservation of mangrove. Results showed that approximately 80% of the respondents felt that they had the right to use the mangrove area since it belongs to the community and is accessible to everyone in the village. However, more than 80% of the respondents felt strongly that the local community should participate in the management and conservation of the mangrove forest. As such, the villagers will protect their forests provided that there are incentives for them to do so. Long-term success will also depend on how well the existing institutions (local and national) are organized. Empirical results from estimation showed that though conversion of the mangrove forest into commercial shrimp farm is financially viable from a private individual's point of view, such a conversion is not economically feasible from society's point of view. This situation could be due to externalities in terms of mangrove destruction and water pollution, especially when the forest in focus is located along the coast and serves as a nursery ground for small fishes and marine life. The case study on Tha Po Village in Surat Thani also revealed that most of the economic feasibility of shrimp farming went to outsiders who can afford the high initial investment required. On the other hand, the local people are left with losses in terms of net foregone benefits of mangrove areas and damage costs of water pollution released from shrimp ponds. The study recommended that the first attempt to reduce the problems of an open-access situation of the remaining forest area might be to recognize the arights of these local people.
Site Characteristics: For the estimation of the economic value of mangroves, Tha Po Village was selected as a site for the case study. Tha Po Moo 2 (Ban) village is more than a hundred years old (with a population of 652 people in 131 households), located on the coast of That Thong Subdistrict, Kanjanadit District, Surat Thani Province. The area used to be extensively covered with mangrove swamps covering about 1,120 hectares. Its villagers are mainly fishermen, who, in the past, relied considerably on the mangrove for livelihood. However, in the last ten years, 640 hectares of the mangrove area along the coast have been cleared for commercial shrimp farms. These farms are mostly owned by outsiders, majority of whom are businessmen from Bangkok and other cities. The villagers have decided to reserve the remaining inland mangrove area of 480 hectares for the community. Still, another 80 hectares of the mangrove forest area have been further encroached upon. In 1993, the villagers organized themselves to protest against shrimp farming's croachment of the mangrove forest. According to the law, the mangroves belong to the state under supervision of the Royal Forestry Department. However, the area is almost open-access in reality, and the negative externalities of shrimp farming has already affected the entire village. The organizations and protests are still continuing as of the study date. The remaining 400 hectares of mangrove forests in the Tha Po Village consists of different species with Avicennia marina, Excoecaria agallocha, Thespesia populnea and Rhizophora apiculata as the dominant species. On the average, the density of the mangrove forest is 2,256 tress/ha, having a biomass of about 45.24 tons/ha. The forest is mainly composed of small-sized trees.
Comments: The limitations cited in the study (especially the approach taken to obtain the economic value of the mangrove area) should be taken into consideration/kept in mind when utilizing the results for transfer exercises.