Value of Conserving a Heritage and Public Good
Attributes
Medium: Land
Country: Philippines
Analytical Framework(s): Contingent Valuation
Unit(s): WTP
Study Date: 2007
Publication Date: 2008
Major Result(s)
| Resource/Environmental Good | PHP (2007) |
PHP (2014)1 |
USD (2014)2 |
|---|---|---|---|
| WTP to conserve the rice terraces for local tourists | 440.00 | 584.55 | 13.07 |
| WTP to conserve the rice terraces for foreign tourists | 3,471.11 | 4,611.44 | 103.11 |
About the Inflation Adjustment: Prices in Philippines (PHP) changed by 32.85% from 2007 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.33 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2026) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.
Study Note: This study aimed at developing a sustainable financing mechanism for the conservation of the Ifugao Rice Terraces and was carried out in two phases. Phase 1 was undertaken to identify the socio-cultural factors that influenced the Ifugao farmers' practices in relation to the terraces; analyze the water allocation system in Ifugao and how this was affecting the availability of water for irrigation; and assess the availability of labor to undertake the repair and protection of the terraces. Under Phase 2, the study evaluated alternative approaches to capture tourists' willingness to pay to partly finance conservation efforts, estimated the extent and occurrence of abandonment and damage of the rice terraces in the four heritage Ifugao municipalities, and laid the groundwork for the institutionalization of a sustainable financing mechanism.
Study Details
Summary: The study aimed to develop a sustainable financing mechanism for the conservation of the Ifugao Rice Terraces and was carried out in two phases. Phase 1 involved the determination of the socio-cultural factors that influence the Ifugao farmers' practices in relation to the terraces; the analysis of the water allocation system in Ifugao and how this was affecting the availability of water for irrigation; and the assessment of the availability of labor to undertake the restoration of the terraces. On the other hand, Phase 2 aimed at evaluating alternative approaches to capture tourists' willingness to pay to partly finance conservation efforts; estimate the extent and occurrence of abandonment and damage of the rice terraces in the four heritage Ifugao municipalities; and lay the groundwork for the institutionalization of a sustainable financing mechanism. The activities under Phase 1 included focus group discussions, key informant interviews, a farmer survey (150 respondents), and a high school student survey (100 respondents), all of which were conducted in the heritage municipalities. For Phase 2, we conducted a contingent valuation survey among local (300 respondents) and foreign (250 respondents) tourists to estimate their willingness to pay for the conservation of the terraces. We used remote sensing as well as geo-referenced and other data from various sources to produce maps showing the area of the rice terraces in the heritage sites and the extent of damage. These were later validated by the farmers and local officials--the results are recorded in a separate report. The information generated from all these activities was used to estimate the cost of repairing/restoring the terraces and the potential revenues that could be collected from local and foreign tourists. The study concluded that the Ifugao farmers' water supply problems in the terraces would be reduced considerably if the irrigation system and damaged terrace walls were repaired. Most of the respondents did not plan to abandon rice terrace farming. However, the majority indicated a need for a labor subsidy for terrace repair and maintenance because this was the costliest among the different terrace farming activities. The significant factors affecting the farmers' decision to abandon terrace farming in the future were poor irrigation facilities and farm size. The incentives that could strengthen the Ifugaos' resolve not to abandon the terraces, and lure back those who had left, are the repair of the irrigation system, a labor subsidy for terrace repair and maintenance, and additional livelihood opportunities. Meanwhile, the survey of high school students revealed that only about onefourth of the students were likely be involved in agriculture or farming in the future, and the majority would most likely be engaged in non-agricultural occupations. Aside from the cultural and environmental fees from tourists, the other possible sources of funds for the conservation of the terraces included taxes and business permits for the business sector, permit fees for students and researchers, as well as donations from private corporations and individuals. The average willingness to pay (WTP) values for local and foreign tourists were P 440 (about USD 9) and USD 71, respectively. For local tourists, the significant factors affecting WTP were gender (male), knowledge about the present condition of the terraces, and bid amount. For foreign tourists, the significant factors affecting WTP were age, knowledge that the rice terraces were a UNESCO World Heritage Site, and bid amount.
Site Characteristics: The rice terraces in four municipalities of Ifugao, namely, Banaue, Hungduan, Kiangan and Mayoyao, were first inscribed in the UNESCO World Heritage List in 1995 as the Rice Terraces of the Philippine Cordilleras under the category of organically evolved landscapes. This category includes landscapes that have developed as a result of an initial social, economic, administrative, or religious imperative, and by association with and in response to the natural environment. However, the Ifugao Rice Terraces have deteriorated over the years, and those inscribed in the World Heritage List were reclassified under the World Heritage in Danger List in 2001. The total area of the rice terraces in the heritage sites was estimated to be 10,324 ha while the estimated area of damaged terraces was 4.1 ha (low estimate) to 457 ha (high estimate), or 0.04% to 4.4% of the total area. These translate to total restoration costs of P 10.021 million to P 1.122 billion, respectively, or an annualised cost of P 1,630,880 million to P 184,243,410 million (at a 10% interest rate over a 10- year period). Collecting P 50 per local tourist and USD 20 per foreign tourist had the potential of generating as much as P 6.65 million per year. Revenues from tourist fees could thus be used to finance conservation activities for the rice terraces.
Comments: This report discusses the activities undertaken and the results of Phases 1 and 2. However, the results of the estimation of the area of the terraces and the extent of damage and abandonment are discussed in a separate report (available on the EEPSEA website).