Payments for environmental services in upper-catchments of Vietnam: will it help the poorest?

Abstract

Abstract:In Asia, there is a surge of interest in the development of Payments for Environmental Services (PES) programs. They represent a new approach that focuses directly on creating a conditional benefit transfer between providers and beneficiaries of environmental services. More specifically, in Vietnam, a Fund for the Protection and Development of Forestry has been recently established that puts in place the mechanisms for the payment of fees by downstream users of watershed services to finance forestry projects in the upper-catchments. This paper reviews the potential response of upland farming households to a PES scheme that rewards them to set aside part of land for the production of environmental services. We examine the viability of PES schemes targeted at Payments for environmental services in upper-catchments of Vietnam 65 agricultural households of the upper-catchments in Northern Vietnam. We focus our attention on households identified as the poorest in the upper-catchment areas, i.e. those with a small endowment of productive land, limited access to water for irrigation, and low access to markets. We find that farmers are unlikely to participate in a voluntary land retirement program unless they are 'compensated' for the loss in food production and a 'forced' set aside program is likely to generate an overall negative impact on both poverty and environmental protection. Development and dissemination of improved technologies that increase food yields is a complementary strategy to promote environmental protection.Keywords: Environmental services, land set-aside, modelling, poverty, shifting cultivation, Vietnam Acknowledgement: This paper presents findings from PN11 "Rice Landscape Management for Raising Water Productivity, Conserving Resources, and Improving Livelihoods in Upper Catchments of the Mekong and Red River Basins", a project of the CGIAR Challenge Program on Water and Food. Additional funds from the Theme 2 PES initiative were also used to obtain the specific results on PES impact.

Why do people not learn from flood disasters? Evidence from Vietnam’s northwestern mountains

“…Payment for environmental services (PES) schemes, whereby downstream residents compensate upstream land managers for their flood mitigation efforts, may be a promising tool for raising the motivation of farmers to establish soil conservation measures in sloping land (Neef and Thomas 2009). A study in northern Vietnam found that farmers are only likely to set land aside for conservation if they receive adequate in-kind compensation or productivity-enhancing technologies on their remaining farm area (Jourdain et al 2009). …”

Water for forests to restore environmental services and alleviate poverty in Vietnam: A farm modeling approach to analyze alternative PES programs

“…For small landholders, setting land aside means they reduce the already limited land they have available for food production and thus increase their food insecurity and financial instability (e.g. Jourdain et al, 2009).…”

Household opportunity costs of protecting and developing forest lands in Son La and Hoa Binh Provinces, Vietnam

“…Indeed, household-level opportunity costs and insecure land tenure often are cited as responsible for the limited success of the PFES program and other conservation efforts in some areas of Vietnam and other countries (Wunder 2008;Affholder et al 2010, McElwee 2012Jourdain et al 2014). Agriculture is the primary source of income in rural areas of Vietnam, and many households in upland areas have experience in crop production for subsistence or for sale in nearby markets (Jourdain et al 2009). The household-level benefits from crop production generally are larger than those available from protecting forest resources, particularly in the near term.…”