Valuation Study

Impact of Irrigation on Aquatic Wetland Resources

Attributes

Medium: Land

Country: Lao PDR

Analytical Framework(s): Economic Analysis

Study Date: 2007

Publication Date: 2008

Major Result(s)

About the Inflation Adjustment: Prices in Lao PDR (LAK) changed by 31.75% from 2007 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.32 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: The study finds that the economic benefits provided by the marsh (particularly in terms of the fish it supplies to local people) far outweigh the benefits provided by the extraction of water for irrigation. As extraction of water for irrigation is threatening the ecology of the marsh and its ability to maintain a viable stock of fish, it is clear that the amount of water extracted for irrigation should be reduced. The report recommends that a minimum level for the water in TLM should be set to ensure the conservation of its precious wetland ecosystem. The report finds that, on balance, this would have a positive impact on the livelihoods of local people. This means that the conservation of the marsh makes good economic sense.

Study Details

Reference: Phoupet Kyophilapong. 2008. Impact of Irrigation on Aquatic Wetland Resources - A Case Study of That Luang Marsh, Lao PDR. EEPSEA Research Report, No. 2008-RR6.

Summary: This paper analyzes the impacts of irrigation on Aquatic Wetland Resources (AWR), using That Luang Marsh (TLM) in the Vientiane capital, Laos, as a case study. A review of literature on the topic revealed that there were very few empirical studies on the interface between irrigation water use and AWR use. Therefore, this paper attempts to analyze the impact of smallholder irrigation on AWR in TLM using various approaches namely, the Participatory Rural Assessment (PRA) method, to identify general issues in irrigation and wetland management; a cost-benefit analysis to measure the net benefits of rice production and AWR; the building of a simple water balance model; and using experts' assessments to identify the impacts of irrigation and the setting of a minimum water level requirement for TLM. The results show that despite there being an irrigation project in TLM, the total net benefit from its AWR is substantially higher than the net benefit from irrigated rice production during the dry season. Over-use of water for irrigation will reduce AWR by 12.5% in the dry season, equivalent to US$ 58.28 thousand. The water level in TLM in some months during the dry season is under the minimum water level requirement for AWR. If the minimum water level requirement for AWR is set at 0.5 m in TLM, total rice production in TLM would decrease by 20.3% (US$ 21.72 thousand) while the net benefit from AWR would increase by about 10% (US$ 48.56 thousand). It is clear that the revenue gain from AWR would be higher than the loss in rice cultivation output if a minimum water level were to be set. This result shows that AWR play a more important role than rice cultivation during the dry season; therefore, policy-makers should give priority to AWR in water distribution decisions.

Site Characteristics: That Luang Marsh (TLM) is an urban wetland, located near Vientiane Capital (VC). It plays an important role for VC residents in term of direct and indirect benefits. TLM is located close to VC . The wetland system combines freshwater, marsh, seasonally-flooded grasslands, and shrub lands. It covers an area of around 16 square km 3 , and collects water that drains from VC and the surrounding suburban areas (Gordon 1996). Wetlands and marsh areas in and around the city are important physical features and serve key hydrological functions such as providing water for farming in the surrounding areas of the marsh, flood control, maintaining river flow during the dry season, the purification of wastewater from the surrounding urban areas, and being a source of aquatic resources for the communities of the wetlands. TLM serves as a natural breeding ground for fish and other edible aquatic resources that support the local residents, particularly the landless communities residing around the marsh. A map showing the location of TLM is given in Figure 2. There are 17 villages around the TLM area with 43,500 people (7,731 households), representing about 6% of the total population of VC in 2006. The number of people living around the marsh has more than tripled over the 1990s, from just over 2,000 households in the early 1990s to more than 7,000 in 2006. Most of the people in the 17 villages are employed in the private sector (54%), followed by the government sector (15%), and rice cultivation (13%). About 8% of the households do not rely on agriculture for income, and it is likely that they survive by catching fish and collecting aquatic produce from the marsh area.

Comments: Participatory Rural Assessment (PRA) and related participatory assessment techniques were used in five villages in order to get a general picture of the current situation in TLM. The heads of 17 villages and leaders of the "Water Using Groups" (WUGs) and also interviewed relevant government agencies were interviewed. Cost-benefit analysis was used to estimate the profitability of rice farming in TLM. A market-based household income survey was used to estimate the direct benefits from its AWR. The measurement of the impact of irrigation on the AWR and the identification of the minimum water level requirement for AWR conservation in TLM was done as follows: First, the net benefits from irrigation and AWR were estimated. Next, a water balance model for estimating the water stock in TLM and the volume of water used for irrigation was estimated in consultation with an irrigation expert, a hydrologist. Finally, the minimum water level requirement for AWR and its impact on AWR were determined in consultation with fishery experts.

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