Willingness of upstream and downstream resource managers to engage in compensation schemes for environmental services

Abstract

Providing compensation for land conservation practices adopted by upstream farmers is still an alien concept in the Thai political context. The governance of common-pool natural resources, such as forest and water, has traditionally been under the control of powerful government line agencies, while the contribution of local communities to natural resource conservation have been hardly recognized by policy-makers. Drawing on a case study in Mae Sa watershed, Chiang Mai province, northern Thailand, this paper discusses the potential of developing compensation schemes in a socio-political context where upland farmers-mostly belonging to ethnic minority groups-tend to be considered a threat to the natural resource base rather than providers of environmental services. Based on data obtained from 371 farm households in the upstream communities and 151 farm households 42 Chapika Sangkapitux et al. in the downstream communities of the watershed, upstream resource managers' willingness to accept compensation for the conservation measures and downstream resource managers' willingness to pay for water resource improvements were estimated through the use of choice experiments. Results from the study suggest that downstream resource managers would be willing to provide on average nearly 1% of their annual income for a substantial improvement of the quantity and quality of water resources, which could be achieved by compensating upstream farmers' change of their agricultural systems towards more environment-friendly practices. Both willingness to pay of downstream respondents and willingness of upstream resource managers to accept compensation were positively correlated with age, education, participation in environmental conservation activities and previous experiences with droughts and/or erosion. The paper concludes that there is a potential for establishing compensation schemes for provision of environmental services in northern Thai watersheds if other actors, such as private businesses and local administration, contribute a substantial share of the budget and if all relevant stakeholders get involved in the institutional design of compensation schemes.

Participatory Approaches to Research and Development in the Southeast Asian Uplands: Potential and Challenges

“…The age and education level of the household heads in the downstream communities were positively correlated with a willingness to pay for an improvement in water resources, and farm households with high acreages and with rice as their main crop were also more likely to participate in a compensation scheme. The research also showed that having a high proportion of non-farm income negatively affected households' willingness to pay, which is of major significance for the design of future PES schemes given the decreasing contribution of agriculture to rural people's incomes in less remote areas (Sangkapitux et al 2009). …”

“…An interesting finding of this study was that poorer groups among the upstream resource managers were more likely to engage in compensation schemes for ecological services, because payments would provide a rather secure and regular benefits stream, and that the establishment of such schemes would likely improve their tenure security in this protected watershed area. Willingness to accept compensation for the adoption of environment-friendly practices was also found to be positively influenced by the age and education of the respondents and their previous experiences with on-site soil erosion, water shortages and drought (Sangkapitux et al 2009). Another study in the Mae Sa watershed by Punyawadee et al (2010) found that downstream water users showed a marginal willingness to pay an additional 40-90 % of their monthly tap water fees for clean, non-chemical contaminated drinkable water.…”

“…One research project carried out by the Uplands Program found that urban residents in northern Thailand were willing to pay moderate additional fees for environmental projects in the uplands, those that would improve tap water quality . Sangkapitux et al (2009) used choice experiments to elicit upstream and downstream farmers' willingness to engage in a compensation scheme for environmental services in the Mae Sa watershed in northern Thailand. In this study, data were obtained from 371 farm households in the upstream communities and 151 farm households downstream.…”

“…In the empirical CE study of Sangkapitux et al (2009), it was found that upstream resource managers in a northern Thai watershed were willing to change their farming systems to more sustainable and environment-friendly practices on parts of their land; for example, by planting grass strips to curb soil erosion and by adopting bio-insecticides and water-saving irrigation techniques, if adequate compensation were provided. An interesting finding of this study was that poorer groups among the upstream resource managers were more likely to engage in compensation schemes for ecological services, because payments would provide a rather secure and regular benefits stream, and that the establishment of such schemes would likely improve their tenure security in this protected watershed area.…”

“…When PES rewards are made inkind; however, it may be more difficult to maintain conditionality, particularly when they are provided as a one-off reward (Ahlheim and Neef 2006). In cases of the allocation of formal resource rights as PES rewards, these rights may need to be attached to certain management practices, for recent studies have found that upland farmers with less secure rights appear to adopt environment-friendly practices primarily to gain a reputation as "conservers of the environment" (Sangkapitux et al 2009), and may resort to their former resource-mining practices if unconditional land titles are bestowed on them or if specified conditions are not enforced.…”